Arizona’s investor-owned utilities are navigating the energy transition by implementing programs to bring more renewable resources and encourage electric vehicle usage in the state. Regulators at a meeting this week approved a plan from the state’s largest IOU for a new demand-side management program that, as amended, could also help decrease the spread of COVID-19 and, for another utility, approved targeted EV tariffs.

Arizona Public Service’s 2021 demand-side management program, approved by the Arizona Corporation Commission at a meeting July 13, will include incentives of up to $2,500 for APS solar customers to add residential battery systems and enroll in time-of-use rate plans. More than half, or about $38.6 million of the $64.2 million plan’s budget, will come from a DSM adjustment surcharge on customer bills, which will increase slightly as part of the new plan.

Customers participating in the battery-incentive program would be required to discharge their home batteries during peak-demand hours. Those who agree to share up to 80 percent of their battery capacity with the grid over a three-year period would be eligible for an additional, one-time $1,250 incentive.

In addition to the new battery incentives, the program continues elements approved in APS’ 2020 DSM program including incentives for replacing old or broken heating, ventilation and air-conditioning systems with more efficient models. Installation incentives instituted to assist customers affected by the COVID-19 pandemic will also continue under the new plan.

ACC member Jim O’Connor offered an amendment, approved by the commission, that establishes a $2-million advanced rooftop control pilot program to provide K-12 schools and non-profit facilities serving needy and homeless individuals in APS territory with incentives to install remote energy management systems for more efficiently heating and cooling large buildings. O’Connor in introducing the amendment said it would help improve HVAC systems in schools, making them safer against the spread of disease, including COVID-19. Members of the public with air-quality and HVAC experience called into the remote meeting validating O’Connor’s description of the technology and encouraging the commission to support it.

An enhancement to O’Connor’s amendment from ACC member Sandra Kennedy will dedicate at least 25 percent of APS’ initial annual budget for the program to Title I schools, or schools with large populations of low-income or at-risk youth.

The ACC approved an additional amendment by Kennedy to remove the program’s sunset, allowing it to continue until a further order from the commission. ACC member Anna Tovar’s amendment, also approved and included in the final plan, expands customer eligibility for APS’ DSM program to include customers who meet guidelines for the utility’s low-income programs. [E-01345A-20-0151]

The commission also approved three separate EV-charging tariffs for Tucson Electric Power. The approval is consistent with the ACC’s Decision No. 77289 from July 2019 that approved the ACC’s Electric Vehicle Implementation Plan that encourages regulated utilities to propose EV pilot programs and design applicable rate structures to address increased adoption of EVs in Arizona.

The TEP tariffs include a tiered structure tied to hours-of-use in which rates decrease as load factor increases to encourage EV charging during super off-peak times. This tariff, the DCFCX, is intended primarily for stand-alone charging stations that will sell the power to end-users. Rates in the plan range from $0.0031250 to $0.15 per kWh with additional flat service charges based on customer size.

Another rate schedule, the Rider-19, targets customers with discounted per-kWh rates for charging EVs during the super off-peak hours of 10:00 p.m. to 5:00 a.m. Appropriate submetering equipment must be installed for customers to take advantage of the rate, which has three separate classes based on customer size. Rates range from $0.005 to $0.0075 per kWh and, like the DCFCX, allow for the resale of electricity.

The third tariff was developed with input from EV-industry stakeholders and is intended to expand options for DC fast-charging in the near term while allowing DC fast-charging stations to avoid demand charges. It will expire on June 30, 2031, at which point customers on the tariff will transfer to the DCFCX tariff that company representatives at the meeting say they expect will have evolved [RU-00000A-18-0284].

The commission at the meeting also discussed the recent heat-related deaths connected to a lack of electric service this year (see CEM No. 1649 [16]). ACC member Sandra Kennedy said during the meeting that she wanted to see greater transparency from the utilities regarding such deaths and that she would support a lower temperature threshold at which to initiate a disconnection moratorium in order to prevent such tragedies in the future.

The commission is expected to formalize rules around weather-related disconnection moratoria this fall.

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Associate Editor - California Energy Markets

Abigail Sawyer grew up in northwestern New Mexico near two massive coal-fired power plants. She spent many hours gazing out the car window at transmission lines on family road trips across the Southwest and now reports on the region from San Francisco.