Free Market Under Attack as APS Proposes Massive Monopoly Expansion
Arizona’s Largest Solar Industry Group Calls Proposal Unfair and Calls for Immediate Rejection
(PHOENIX) In an unprecedented announcement that took the solar industry by surprise, Arizona’s largest utility, APS, announced that it intends to begin competing directly with Arizona solar installers. APS announced Monday that it is seeking permission to spend between $57 and $70 million -not including its profits- of ratepayer money to install solar on the roofs of homes in its service territory and to compete directly with solar installers of all sizes.
“The idea of our members who compete in the free market today having to all of a sudden compete with a regulated monopoly is frightening. How would you like it if the government just stepped in and started competing with your business?” said Corey Garrison, CEO of Arizona based Southface Solar and treasurer of Arizona Solar Energy Industries Association (AriSEIA). “APS has proposed subsidizing certain customers that allow it to put solar on their rooftops while the free market gets no more utility subsidy and actually gets charged for going solar.”
It has been well publicized that APS spent much of the last year in a battle with the very industry it now seeks to dominate. Throughout 2013 APS urged the Arizona Corporation Commission to install a huge monthly tax on those who would put solar on their roof. It has also been reported that APS urged the Department of Revenue to institute a new property tax on rooftop solar panels that are leased to customers.
“After spending a year misleading the public with well-publicized lies and misdirection, APS seems to think this is a good time for it to be rewarded with an expansion of its monopoly franchise” said Corey Garrison
Unlike rooftop solar companies that must compete with each other on a level playing field, APS earns a guaranteed rate of return off of its assets including these proposed rooftop solar installations. If approved, APS would be permitted to advertise its solar product in its customer bills and to use its customer lists to market and sell, all with employees paid for by ratepayers. Unlike traditional, free market rooftop solar which is paid for only by the customer that installs the system, APS will be asking all its ratepayers to pay the cost of, and guarantee its profits on, each of the systems it installs under this program.
“This is a massive expansion of the monopoly into an area that is well served by the free market” continued Garrison, “what’s next; will APS ask to sell electric cars or ovens or some other set of goods or services?”
Utilities across the country often participate in unregulated markets but do so through an unregulated affiliate. In fact, APS’ parent company sold off just such an affiliate, APS Energy Services, a few years ago. It is unclear why APS would seek to create such a lopsided competitive landscape instead of simply seeking to participate in this market the way other utilities do with an unregulated affiliate.
“The industry would be happy to compete with another market player that is playing by the same rules but asking participants in a free market to slug it out against a government regulated behemoth with guaranteed profits is not only unfair, its un-American” said Garrison.
He added, “we call on the Corporation Commission to send a quick and decisive message that this type of monopoly expansion will not be approved. This ridiculous discussion is bad for our industry and our industry has been through enough utility induced crisis over the past year.”