ACC

Arizona's Energy Efficiency Standard

Published March 2012

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The essentials

• By 2020 Public Utility Companies with an annual revenue of more than $5 million must achieve energy savings (measured in kWh) equal to at least 22 percent of their previous year’s sales
  • Public Utility Companies must design Demand Side Management programs to encourage customers to reduce their energy usage
  • By 2020 every gas utility must achieve cumulative savings equal to 6% of their previous year’s retail sales

Arizona's Renewable Energy Standard and Tariff

Published March 2012

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The essentials

• Rule requires all regulated electrical utilities to obtain 15 percent of their retail generated energy from renewable resources by 2025. Starting in 2007, utilities must follow a compliance schedule to meet reduction goals.
• In 2025, 4.5 percent of total retail sales must come from distributed renewable resources.
• One-half of the distributed renewable energy requirement must come from residential applications and the other one-half must come from nonresidential, non-utility applications.
• Utilities may charge a tariff to ratepayers to recoup costs associated with implementing the Renewable Energy Standard

Arizona Net Metering Rules

Published June 2012

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The Essentials

• The Arizona Net Metering Rule allows customers to receive credit for excess electricity they generate from renewable energy installations at their home or business.
• Both electricity purchased from the utility and electricity generated by the customer is measured with a bi-directional meter installed at the house of the customer.
• Any net excess electricity generated in one month is carried over as a kilowatt-hour credit onto the customer’s next bill.
• At the end of the calendar year, customers receive a check or a billing credit from the utility for any unused kilowatt-hour credits.
• Utilities must annually file with the Arizona Corporation Commission proposed tariffs; such tariffs set standard rates for the annual purchase of credits. The tariff is then added to each utility customer’s electricity bills.

APS/TEP/UNSE Utility REST Implementation Plans

Published June 2012

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The Essentials

• In order to comply with the Renewable Energy Standard and Tariff (“REST”) rules formally passed by the Arizona Corporation Commission (“ACC”) in 2007, affected utilities must provide
  • an annual report to the ACC that describes their intended implementation proposal to meet the REST requirements and
  • a follow-up compliance report explaining the utility’s progress towards meeting its annual REST Implementation requirements and targets for the previous year with the REST and intended future REST implementation plans.
• Each year, the ACC reviews the implementation plan of the affected utility for the following year
• The ACC then makes an official determination regarding the utility’s REST implementation plan which includes any amendments or changes that arise during the review process.
•  The ACC also reviews the utility’s annual REST Compliance Report. After review, it is released to the public.

Solar Power Purchase Agreements

Published June 2012

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The Essentials

• A Power Purchase Agreement is a contract between multiple parties, one who generates electricity for the purpose of sale (the seller) and one who is looking to purchase electricity (the buyer).
• The PPA defines all of the commercial terms for the sale of electricity between the two parties, including when the project will begin commercial operation, schedule for delivery of electricity, penalties for under delivery, payment terms, and termination.
• A PPA is the principal agreement that defines the revenue and credit quality of a generating project and is thus a key instrument of project finance.
• There are many forms of PPA in use today. PPA’s vary according to the needs of buyer, seller, and financing counterparties.
• PPA’s have grown popular because the installation, operation, and maintenance costs associated with rooftop solar systems can be overly expensive for individual property owners.