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July 31, 2013

Host: Ted Simons

APS Solar Power Charges

  |   Video
  • Arizona Public Service released a plan recently to charge residential customers who install solar panels $50 to $100 more a month. The utility says the charges are needed to maintain the electricity grid, but the move is facing lots of opposition, including a vote by the Cave Creek town council to oppose the plan. Barbara Lockwood, General Manager of Energy Innovation for APS, will discuss the plan.
  • Barbara Lockwood - General Manager of Energy Innovation, APS
Category: Energy   |   Keywords: aps, update, electricity, energy,

View Transcript
Richard Ruelas: Arizona public service released a plan recently to charge residential customers who installed solar panels $50 to $100 more each month. We heard from a Cave Creek council member last week. Tonight we hear from APS, who says the charges are needed to maintain the electricity grid. Barbara Lockwood is here now to talk about the plan. I guess that Cave Creek vote might just be sort of an understanding or a barometer of how the public feels about solar. But it seems like APS is saying that this idea of getting your power for free if you put a rooftop set on your house doesn't quite wash in the whole scheme of things?

Barbara Lockwood: That's definitely correct. The Cave Creek Resolution, really at the heart of it was a resounding support for solar energy. That's something we can absolutely agree with. Where we disagree is how you support solar energy into the future. Our concern is around fairness. Fairness for solar customers today, fairness for solar customers tomorrow, and that's what our proposal is addressing. We want to make solar sustainable for the future.

Richard Ruelas: I guess people have the idea -- I mean, people like the idea of putting panels on their roof and getting all of their electricity from that. But some of that still comes from APS, correct?

Barbara Lockwood: Absolutely. One of the most important things to understand in this whole discussion is that solar and the grid or the electrical system are very dependent on each other. And solar customers use the grid 24 hours a day. It's a very symbiotic relationship, it works very, very well. The policies we've had in the past are not what's going to take us forward into the future. The policies were created on a foundation that doesn't stand up anymore. In some ways it's like a house of cards. The more you put into the policy the more unstable it becomes. We're looking to address that going forward, and make sure it can stand the test of time and five, 10, 15 years into the future, Arizona still has a choice to go solar.

Richard Ruelas: $50 to $100 per month is in the ballpark of what it is? But it's essentially money going to the utility to fund future expansion to power lines, up-keeping the grid?

Barbara Lockwood: I think that's generally correct. I want to be sure to share that there are three elements and all three are really important in understanding what we're trying to achieve and the totality of the package. One element is grandfathering. We have over 18,000 customers that have gone solar and we thank them. We asked them to go solar and we're very proud they have done so.

Richard Ruelas: They stay with the current deal.

Barbara Lockwood: Nothing that we are proposing now would affect them. They continue to enjoy the benefits under the current proposal. The costs are really about how we credit future solar customers. It's all about fairness. What we are asking is that we want to make sure that we fairly compensate future solar customers for the solar that they are producing. And we also ask that they pay a fair price for the grid that they continue to rely on. That's really the second element of the plan. You did characterize it correctly. It's a reduction in how much we credit them. We recognize that has an economic impact associated with a customer's ability to go forward. We need to make sure that we're communicating that, as well, in this. That is up-front cash incentives. We're looking to continue to support stole lever to our customers and we are looking to help you cut some of those impacts.

Richard Ruelas: Are they not or increased?

Barbara Lockwood: We’ve had them for a while. What we're proposing is that we increase them so that we can help to make sure that solar maintains some viable options for the future.

Richard Ruelas: And I guess the other incentive people have, because we really can't see the power being generated, but people like to get that bill that says, $12 or credit. They like the idea of the meter spinning backwards. How big of a deal do you think it'll be on the solar market, that people won't see that very miniscule bill from APS, they will see the $75 or other bill they have.

Barbara Lockwood: It's that total package that has the most viable approach. Yes, it may change the bills we get from APS, or we reduce stays there, they are paying for solar. We expect that solar customers will continue to be able to sign up for solar.

Richard Ruelas: If patterns continue with the adaptation of residential rooftops for solar, does that put further down the road the need for another nuclear power plant or things like that? Is that a tangible thing?

Barbara Lockwood: Absolutely it is. We very much appreciate what that brings to the table, one thing you have to keep in mind, it's not a one for one trade off. We in Arizona use the most energy later in the evening, 5p.m., 6p.m., 7p.m. Solar does help defer some generation in the future, but internal, not a one for one trade off.

Richard Ruelas: But that's something else you don't think would be a solar plant, would it have to be one of the options we see now?

Barbara Lockwood: Yes, I think that's true. And kind of back to how we started this conversation about the symbiotic relationship between them. Solar produces energy during sunny times, and then we also need to be able to provide energy at other times like at night or when it's raining.

Richard Ruelas: Is there any other options, wind?

Barbara Lockwood: Absolutely, we do have wind in this, we also have geothermal energy. Another option coming on line here in the not-too-distant future is a Solana generating station. One of the unique things about that project is that it has energy storage. It can produce energy not only noon and later in the day, it can get solar power after dark.

Richard Ruelas: That could change tech knowledge. Barbara Lockwood, thank you for joining us this evening.

Barbara Lockwood: Thank you for having me.

Richard Ruelas: Thursday on "Arizona Horizon" we'll hear from a site selector and an economist about economic development, and find out about new research that could stop inflammation. Thank you for joining us th

Grand Canyon Haze

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  • Salt River Project and other partners who operate the Navajo Generating Station say they plan to close one of three generators to address a demand from the EPA concerning haze at the Grand Canyon. The operators also say they will stop burning conventional coal by 2044. SRP Senior Director of Environmental Management Policy and Compliance Kelly Barr and CAP General Manager David Modeer will discuss the issue.
  • Kelly Barr - Senior Director of Environmental Management Policy and Compliance, SRP
  • David Modeer - General Manager, CAP
Category: Environment   |   Keywords: environment, Grand Canyon,

View Transcript
Richard Ruelas: Good evening, and welcome to "Arizona Horizon," I'm Richard Ruelas in for Ted Simons. Salt River Project and partners who operate the Navajo Generating Station say they plan to close one of three generators to address a demand from the EPA concerning haze at the Grand Canyon. The operators also say they will stop burning conventional coal by 2044. Here to talk about that is SRP Senior Director of Environmental Management Policy and Compliance, Kelly Barr, and Central Arizona Project General Manager David Modeer. Thanks both of you for joining us this evening. It's a complicated topic, but we'll try to get through as much as we can. In January it seemed as if the EPA had a plan ready to go, where there was talk of taking this plant up in Page that has three power generators and figuring out how to reduce haze over the Grand Canyon. They issued some sort of guideline saying -- what did they mandate SRP to do?

Kelly Barr: Thank you, Richard. In February they issued a proposed rule which would mandate that initially the installation of SCR, which is pollution control equipment, on all these units in 2018. They included an alternative that gave us credit for early installation of burners at the plant and extend the deadline 21 to 22 and 23. It wasn't quite enough time to address the myriad of issues.

Richard Ruelas: The original proposal I think would have cost somewhere between $500 million to a billion dollars to install these essentially catalytic converters on a car onto these plants.

Kelly Barr: A good analogy.

Ricahrd Ruelas: You came up in July with a proposal, and that includes shutting down one of the plants possibly.

Kelly Barr: It accommodates the planned departure of two of the owners, the lost Department of Water and Power and MV Energy. They have talked about a desire to exit the plant. A diverse group has agreed if they exit as expected, we would close one unit. But in exchange for that early closure we would install the SCRs in 2030. That gives us a great deal of regulatory certainty and pushes off a substantial capital investment about years 12 down the road.

Richard Ruelas: And that reduces haze by having one down rather than three going?

Kelly Barr: Right.

Richard Ruelas: The power generated by that plant, is that pretty much exactly what L.A. and Nevada --

Kelly Barr: Exactly. That's one of the nice things, they share 731 megaWatts and the unit is 735 megaWatts. It's a nice solution. It keeps the Arizona interests whole. APS and other units will keep the power they are using today from the remaining two units.

Richard Ruelas: This major customer, Central Arizona Project, was built pretty much to make sure CAP has enough power to pump water to all of our homes, correct?

David Modeer: The original concept of it was to provide power to CAP and also address the energy needs of Arizona and tribal issues, trust responsibilities that the federal government has. When the original concept was conceived, hydropower was building dams on the Colorado, and that was not politically acceptable. This was a solution that the secretary of the interior at that time, Stewart Udall, everybody signed off on it, environmental groups and the state of Arizona and CAP, in the early stages of construction. And we would have it for a long time, a good source of reliable low-cost energy.

Richard Ruelas: Had that original plan -- had the government's original requirements stayed, what would it have done to CAP and water rates had you not hammered this out recently?

David Modeer: Concern for us and with the original proposal from EPA was that there were so many uncertainties, as Kelly alluded to, that there was a strong likelihood that the owners would not have been willing to put in the investment needed, within the time frame that EPA was requiring. Therefore the risk of that plant entirely closing was very real. And that would be an absolute disaster for the Central Arizona Project, for our water users in terms of cost. We would have to go find additional power and all of the other benefits that have inured over the years from our power out of NGS would have gone away. A lot of the water settlement agreements which depend on that power for delivery of waters to tribes in central and southern Arizona would have evaporated and the cost would have been significant. The impact to Arizona water policy would have been serious, and certainly the tribes and their ability to use water for their business needs, agriculture, in other words, would have been significantly impacted.

Richard Ruelas: Is there any other way to provide power to the pumps at Central Arizona Project?

David Modeer: There are other ways to provide power. But they come at a lot more costly rate for us. There certainly is power available on the open market that you could buy at a much higher cost than is produced out of NGS. We have rights to what is called excess power. That excess power was given to us in the very beginning in order to market that power and use the revenues generated from that to contribute to the repayment obligation that Arizona has to the federal government for the construction of a Central Arizona Project. Loss of that, which is anywhere over the years has been to $25 million to 38 our annual obligation of $55 million would have to come from our water uses if that was lost.

Richard Ruelas: Higher rates.

David Modeer: Significantly higher rates.

Richard Ruelas: Anything, solar, wind, is anything feasible to get --

David Modeer: Not at this stage. With we are a base load power generator, we operate 24 hours a day, seven days a week and use significant amounts of power. Particularly when we take it right off the river at Lake Havasu, it's a substantial power draw.

Richard Ruelas: You need to get water going uphill.

David Modeer: We had to get it going uphill right away.

Richard Ruelas: What are the obstacles for this to go forward? Has the EPA signed off on this? What happens now?

Kelly Barr: No, they haven't, but we are very hopeful that they will. We've put the proposal together, filed it with the EPA on Friday. The EPA is now looking at the proposal. If they decide to propose it as a supplemental proposal they will reissue it and folks will go in a public comment process on that. We believe the public comment sessions will close by October 4th, including written comments and the public hearings.

Richard Ruelas: You have some environmental groups who have worked with you on this deal, some who have backed away. What kind of reaction do you expect from the public, or have you heard any reaction from the public as this has become known?

Kelly Barr: Certainly folks would want us to continue to operate all three units, and folks who would like us to close down all three units. This is a compromise, and not everybody got -- people didn't get exactly what they wanted. That's how this will work. I'm sure there will be some environmental groups that say we didn't go far enough. But I know many people on the other side are feeling some pain. Compromise. Everybody had to give something up in order to make this work.

Richard Ruelas: And is CAP going to be okay with that unit closing down, that still provides you enough power in 2020?

David Modeer: We are kept whole. The total amount of power allocated to it when it was built remains the same. The important thing that Kelly just alluded to, it was compromise. There were people around the table who are going to have significant issues because of this. The Navajo Nation will lose revenue with it, but they felt the same way we did. Keeping this plant open and operating at the level this agreement allows for is far better than the risk of it closing entirely.

Richard Ruelas: Excellent. It's a complicated issue and I think we probably brought people up to speed. Thank you for joining us and delving into this issue.

David Modeer: Nice to be here.

Kelly Barr: Thank you so much for the opportunity.

Grand Canyon Haze Response

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  • The Grand Canyon Chapter of the Sierra Club says it is encouraged by plans to reduce haze over the Grand Canyon. However, the organization does have some concerns. Sandy Bahr of the Sierra Club will talk about that.
  • Sandy Bahr - Sierra Club
Category: Environment   |   Keywords: Grand Canyon, concern,

View Transcript
Richard Ruelas: Not everyone is satisfied with plans to cut haze at the Grand Canyon. The Grand Canyon chapter of the Sierra Club says although they are encouraged by the plans they do have some concerns. Sandy Bahr of the Sierra Club is here to talk about that. Was the Sierra Club at the proverbial table, as they say?

Sandy Bahr: We've been involved with trying to protect Grand Canyon and air quality in general for a long time. And yes, we did participate in the discussions at the beginning. But we participated thinking that the proposal would be something that is better than what the EPA proposed. That was the understanding when the discussions started, that it would be better than BART or better than best available retrofit technology.

Richard Ruelas: You were hoping the compromise would accelerate the plan, reduce haze quicker.

Sandy Bahr: Right, and actually go beyond what was being proposed, that was the understanding. And it became clear that it not only wasn't going to be better than that, but it was not going to meet those requirements. When the proposal came out we saw it does not meet the Clean Air Act requirements, it doesn't meet the deadlines, it doesn't meet the reductions, it pushes the timelines out a lot further. And also, I know that the proponents talk about certainty, but there really is no certainty in this proposal. There are so many ifs in the proposal they might shut down one early, but might not.

Richard Ruelas: Return seeing a unit shut down in 2020, you would rather have a solution of the being cleaner before a decade?

Sandy Bahr: But also making sure that the other units met the requirements. And this proposal doesn't do that. We also think that a lot more could be done to promote transition to clean renewable energy. This isn't about saying no to everything, this is about come on, we've waited for decades for cleanup, let's get on with it and start the transition effort to start clean renewable energy you don't get to keep polluting the Grand Canyon and harming the public health, especially the health of the Hopi and Navajo people.

Richard Ruelas: We're talking about haze going over there.

Sandy Bahr: Also 11 other class one -- class one wilderness areas.

Richard Ruelas: The head of CAP said there was not at this time a feasible alternative to worsen any of means?

Sandy Bahr: We definitely think we are well on the road to doing an -- -- if we can keep the utilities from getting in the way of renewables, we're well on our way. We think that it's a reasonable alternative.

Richard Ruelas: But somehow putting pressure on them will kind of squeeze out innovation?

Sandy Bahr: Well, because they are trying to stay steps backwards right now, and undercut solar. I think if anything shows how risky the coal plants are, it's closures like this, especially relevant to the deregulation studies. Some have said if you do that, we're not going to fulfill what he said we were going to do with the plant. It really hammers home how risky the coal is.

Richard Ruelas: This is all being for haze. Is it appreciable? Would we notice under this plan or accelerated, would we notice a reduction in haze?

Sandy Bahr: We would definitely notice, Had to go through and demonstrate that. So we would definitely notice it. The knock time envelope, that also denotes one of the seven natural wars of the elder. They don’t go to Grand Canyon to not see it.

Richard Ruelas: Thanks for joining us.

Sandy Bahr: Have a good evening.