The inability of SW Gas to provide natural gas to 14,000 homes in Tucson due to the cold snap raises some serious questions about our natural gas supply.

First, there are hints the size of the problem is much greater than SW Gas admitted. I have friends who lost their gas supply who were not in the areas identified as being cut off.

Second and most importantly is how much gas supply does SW Gas really have? Obviously not enough for the demand that occurred during the cold snap.

Maybe the gas demand was unprecedented. Small comfort for those families whose homes were heavily dependent on natural gas for cooking, heating and hot water. There are a lot of chilled Tucsonans who haven’t had a bath in a few days.

Then again maybe SW Gas hooked up more customers than they could really serve in a pinch.

The Arizona Corporation Commission, which regulates utilities like SW Gas, needs to do an investigation into the gas shortage and find out if SW Gas may be over committed. Maybe there needs to be a moratorium imposed on new gas customer connections until we all find out just how much natural gas SW Gas really has access to, and what their contingency plans really are in the event of an unprecedented demand problem.

Then again, this situation should be a wake up call to people that we are far too dependent on our electric, natural gas and water supply grids. When one or all of them fail, we’re left freezing in the dark without food or water.

A few years ago when Nogales was experiencing protracted electric outages because Citizen Utilities had let their electric system crumble, I was at a friend’s home when the lights went out. Dinner was in the process of being cooked. Quickly the hosts put the food in the fire place and dinner was cooked in the fire place. Kerosene lanterns were lit. And life went on as though nothing happened. People sat around the piano and sang songs since the radio and tvs weren’t working.

By contrast a friend describes having no gas for heat or hot water and they turned to their fire place…which was also gas fueled. Luckily their stove was electric so they huddled around the stove to get warm.

Something that should come as no surprise to Tucson residents, Tucson Electric Power opposed the Arizona Corporation Commission’s efforts to require electric utilities to reduce the amount of power they sell by 22% by the year 2020. Arizona utilities regulated by the ACC would have to adopt tough conservation efforts.

The ACC adopted the new rules on a 5-0 vote Tuesday July 27, 2010.

TEP, which is heavily invested in coal-fired power plants in northern Arizona and New Mexico also recently sought to cut their solar rebate.

Does anyone think TEP’s parent company UniSource needs a new board of directors?

Arizona utilities told to help people cut energy use
by Ryan Randazzo on Jul.28, 2010, under Arizona Republic News

In an effort described as among the most aggressive in the nation, Arizona regulators have approved rules requiring utilities to promote energy efficiency and ultimately cut their projected power sales, a move that also will save customers money.

The Arizona Corporation Commission voted 5-0 Tuesday to require regulated electric utilities to reduce the amount of power they sell by 22 percent by the year 2020 by helping homeowners and businesses conserve energy.

The move parallels a national push by utility companies to increase energy-efficiency efforts as one way to cut back on building multimillion-dollar power plants and transmission lines – projects that ultimately are financed by customer rate hikes.

The effort also helps curb the air pollution and excessive water use resulting from power plants burning coal or natural gas to supply customers’ electricity.

Although Phoenix-based Arizona Public Service Co., the state’s largest utility, supports the standard; others, including Tucson Electric Power Co. oppose the goal, questioning how much energy conservation they will be able to coax from customers.

A variety of environmental and consumer groups, as well as companies that work with utilities to encourage energy conservation, back the rules.

The new rules’ top proponent, the Southwest Energy Efficiency Project, estimates the move will save Arizona utility customers who implement energy-efficiency measures over the next decade about $9 billion on their power bills.

“Utilities that underinvest in energy efficiency will deliver their customers the highest utility bills,” said Jeff Schlegel, Arizona representative for the Southwest Energy Efficiency Project.

Utilities will be able to meet the requirement many ways, from subsidizing the cost of low-power lightbulbs at grocery stores and paying rebates for people planting shade trees, to helping customers buy more-efficient appliances.

Two percent of the savings by 2020 must come from “demand-response” programs, such as voluntary efforts where businesses shut off some power during hot afternoons when energy demand peaks.

APS is planning to test a demand-response program in which the utility will control homes’ air-conditioners, raising the thermostat a notch or cycling the unit on and off to minimize peak demand.

Starting next year, utilities must show increasing amounts of electricity saved until 2020, when they are required to reach 22 percent. They can take credit for efficiency projects funded since 2005.

Power sales don’t have to be cut 22 percent from 2010 levels; the new rules allow utilities to factor in extra energy requirements tied to population growth.

The move had bipartisan support from the commission’s two Democrats and three Republicans because “it is the right thing for our state,” Corporation Commission Chairwoman Kris Mayes said.
“I personally think this is the most important thing I will ever do in my life. It is one of the most important decisions this commission has ever made in its 100-year history.”

The attorney general must certify the new rules before they are implemented.

Several states have similar guidelines, but they are hard to compare because they have different dates, goals and rules.

Still, officials agreed that Arizona’s rules are among the toughest.

Tucson Electric Power and several electric cooperatives opposed them, arguing that the rules have unreasonable goals and that it’s unclear how they will recover the money they spend promoting conservation.

See also Why isn’t Tucson the solar capital of Arizona?

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The news account said Tucson Electric Power had applied to the Arizona Corporation Commission for permission to curtail its solar rebate program.

Appartently TEP is running out of money derived from a renewable energy surcharge on customer bills to fund the solar program.

Is there something seriously wrong with this picture?

I am finding it hard to understand whyt TEP cann’t earn a rate of return on solar systems put on people’s homes. They earn a rate of return from their coal-fired power plants. So why can’t the ACC allow them a profit from selling solar generated electricity from people’s rooftops? A kilowatt of energy production is a kilowatt of energy production, whether it comes from a 500 megwatt power plant in the Four Corners area, or a 5 kw rooftop system.

If the solar program is only going to function by subsidizing it with other ratepayers’ money, it is doomed.

TEP urges solar rebates be reduced
David Wichner Arizona Daily Star | Posted: Thursday, July 15, 2010 12:00 am |

Tucson Electric Power Co. is asking state regulators to lower subsidies for residential customers who install solar arrays, saying the utility is running out of funding for the rebates amid a surge in demand.

Nearly 1,100 local homeowners have reserved TEP’s SunShare rebates for solar photovoltaic (PV) systems this year, surpassing the total number of residential solar power systems completed over the previous nine years combined, TEP said.

TEP said residential customers have reserved more than $12.2 million of the $17.6 million in upfront SunShare incentives available this year, and at the current rate that money will run out in August. The rebates are funded by monthly surcharges paid by all electric customers.

Rebate requests from local businesses, meanwhile, have exceeded the $5 million budget for those upfront incentives. TEP business ratepayers interested in installing solar systems are being placed on a waiting list.

In response to the surging demand, TEP said it has asked the Arizona Corporation Commission to reduce residential SunShare rebates from $3 to $2.25 per watt for grid-tied PV arrays, for rebate applications received after the close of business on July 7.

That would cut the rebate on a 3-kilowatt system from $9,000 to $6,750.

The ACC could take action on TEP’s proposed changes as soon as an open meeting set for July 27-28.
“We looked at the trend and made the proposal that the incentive money would last longer if we lowered the rebate,” TEP spokesman Joe Salkowski said.

Reducing the rebate will allow more customers to take advantage of the program, TEP said.

TEP proposed several alternatives for commercial customers, subject to state approval. The company said it could wait until new resources are available next year; restore upfront rebates by tapping funds in a separate, “performance-based incentive” program normally paid out over 20 years, or raise more money through customer surcharges.

The surge in demand for TEP’s SunShare subsidies has been driven in part by reduced costs for solar power systems, said David Hutchens, a vice president of TEP and parent UniSource Energy Corp.

Prices for installed PV systems in the Tucson area have dropped to about $5 per watt from nearly $12 per watt in 2006, while TEP’s incentives have remained unchanged, TEP said.

A local solar system provider and longtime industry advocate said lowering the rebate makes sense.
“With the price of the PV systems dropping … it makes sense to drop the rebates. It allows more people to participate,” said Katharine Kent, president of The Solar Store.

“Electric rates continue to increase, so consumers (who install solar) are going to get their money back,” Kent added.

At the same time, she said, the solar industry should be looking beyond government incentives.
“It’s appropriate for government to help get an industry up and running, but for this industry to survive in the long term, we need to survive without incentives,” she said, adding that ratepayers also need to recognize the true costs of electricity.

TEP said the pace of rebate applications quickened after Phoenix-based Arizona Public Service Co. reduced its PV incentive levels to $1.95 per watt in April, with approval from the Corporation Commission. That encouraged PV installers to step up their marketing efforts in Tucson, TEP said.

DID YOU KNOW

In late January, Trico Electric Cooperative said it was at least $1 million behind on paying its solar rebates, leaving some Trico customers waiting months for thousands of dollars in promised rebates. Trico won approval to raise its monthly renewable-energy customer surcharge and cut back its rebates.