It stands to reason that, in a desert state such as Arizona, solar power would be something of a no-brainer. But in Arizona, the issue of harnessing one of the most plentiful and valuable resources has caused a controversy.


Several of the state’s utilities are pursuing policies that would roll back or otherwise cancel the benefits of net metering. Tucson Electric Power, Arizona Public Service, Tricot Electric Cooperative and Sulphur Springs Electric Cooperative all have filings with state regulators. In February, the Salt River Project approved a pricing-plan change that charges more to solar customers to help the public utility recover some of its fixed costs.


The process of net metering underlies the affordability of most residential solar installations. It requires utilities to buy back the excess electricity customers generate from their rooftop panels. The credit that consumers receive offsets the cost of electricity they must buy in the evening hours when their panels are not producing, lowering their monthly bill and helping to justify the long-term financing of the installation.


For every winner, there is a loser, and, in the case of net metering, utilities complain that they are being required to pay too much. They argue that, under the current regulatory scheme, they are unable to recoup the losses they incur from solar customers who are buying less electricity or to cover the costs of transmission upgrades that all this new renewable power requires. They also argue that all of these costs get passed along unfairly to the remaining customers who do not have solar panels.


While the complaints are similar, their proposed remedies are different. Tucson Electric wants to be able to buy the power from solar customers at wholesale rather than retail rates, which the current regulatory framework requires. Arizona Public Service wants to raise its lost fixed-cost recovery (LFCR) to $3 per kilowatt from the current rate of $0.70 per kilowatt. The LFCR is the amount a utility can recover from customers when they reduce their bills as a result of solar.


The utilities are hoping to get a decision from the Arizona Corporation Commission in August.