Arizona Public Service Co. inadvertently sent confusing information to many of its 77,000 solar customers that could prompt them to change rate plans unnecessarily and cost them hundreds or even thousands of dollars over the life of their solar panels.

The company said it would not let customers act on the bad information without fully explaining the implications.

The old rate plans include net metering, where APS pays customers a 1-1 credit for most of the surplus electricity their solar panels put on the power grid.

APS began charging higher rates in August after getting approval from the Arizona Corporation Commission on a nearly $100 million annual rate hike for the utility. 

But in addition to rates going up, now all residential customers must choose a new rate plan by May because the old rate plans are being discontinued — except for solar customers.

Those solar customers are “grandfathered” into their current rate plan for 20 years from the date the panels were put on their homes.

APS sent letters to solar customers telling them they would see bill increases when rates go up, but for 20 years from the date of their solar installations they could remain on their rate plans.

And, the grandfathering remains with the home if they sell it, so any buyer will get the same benefit.

For the past two weeks, however, APS has accidentally sent inserts with all residential bills describing the new plans. Grandfathered solar customers received those inserts, causing confusion.

The bill inserts advertised a drawing and prizes for customers who change rate plans, and provided directions on how to go to the company website and do so.

“It went to grandfathered solar customers as a result of an oversight,” spokeswoman Anna Stewart said.

APS stopped sending those inserts Thursday once the error was noticed.

APS has about 69,000 customers with solar, and another 8,000 who applied to install solar by Aug. 31. Customers who applied by Aug. 31 to install solar have until Feb. 28 to get the panels connected and still be grandfathered into their rate plan. They are referred to as pipeline customers.  

About half of the solar customers and pipeline customers got the inserts.

Stewart said that if a grandfathered solar customer attempts to change rate plans through the APS website, the utility calls that customer to ensure they understand the ramifications.

“We are taking the added step to double-check by confirming with that customer they truly want to switch and that by switching they will give up their grandfathering,” she said.

APS spokesman Jim McDonald said solar customers who accidentally made the change will be allowed to go back to their grandfathered rate.

The new plans do not include net metering. Regulators approved a complex replacement for net metering earlier in 2016 that will allow electric companies to pay homeowners something less than retail price for that surplus power if they are not grandfathered.

Those changes will mean new solar customers see less financial benefit from their panels. Their savings depend on the size of their home, number of solar panels and other factors such as when and how they use electricity.

Another benefit of the old rate plans is the time-of-use hours that run from noon to 7 p.m. on some plans. Those peak hours are when the utility charges more for electricity, and they align well with production from solar panels.

APS is moving to peak hours of 3 to 8 p.m. in its new rate plans, and those hours are less advantageous to solar customers.

The transition to new rates is complex because the company has some customers who need to change plans and others who do not, and customers could get confused when they see a message intended for the other group, Stewart said.

For example, pipeline solar customers will need to change rate plans if they don’t get solar installed by Feb. 28.

The rate hike required notification of non-grandfathered customers for new rate plans, and because pipeline customers are not on the grandfathered list yet, they got another note in October bills saying they would be moved to new rate plans if they didn’t choose one.

That is the same message given to non-solar customers.

“That could possibly be confusing, but to be clear, those customers are grandfathered if they get their systems installed by Feb. 28, and they don’t need to switch to one of the new service plans,” Stewart said.

Reach the reporter at [email protected] or 602-444-4331.


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