An agreement between Arizona Public Service (APS) and Arizona’s ratepayer advocate could create a surge of new storage deployment in the state over the next seven years.
APS and the Residential Utility Consumer Office (RUCO) jointly filed a settlement that, if approved, would require APS to evaluate storage, efficiency, renewables and demand response as a potential alternative to building or upgrading conventional power plants between 2015 and 2021.
The settlement would also ensure that APS considers storage as a companion or a replacement for natural gas peaking plants over the same time period.
In addition to considering alternatives to conventional peaking units, APS would seek competitive bids for storage projects worth 10 megawatt-hours by the end of 2018. An independent monitor would examine the bids for both peaking resources and conventional generation in order to make recommendations on the most cost effective solutions for ratepayers.
Regulators at the Arizona Corporation Commission must review the settlement and will likely vote on it in October.
The plan comes as regulators review a plan by APS to develop 20 megawatts of rooftop solar systems through 2015. The state has also been grappling with whether to change net metering policy. Last November, in a compromise brokered by RUCO, regulators agreed to impose a $0.70 per kilowatt charge on those taking advantage of net metering in order to offset fixed grid costs — a fee far lower than the $8.00 per kilowatt proposed by APS.
Although the debate over distributed solar is not fully settled in Arizona, this latest compromise opens up many new opportunities for competitive alternatives to conventional fossil fuels. And in this case, APS is fully on board.
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