On June 30, 2010, the Arizona Corporation Commission (ACC) decided 5-0 that Solar City may provide PPA service to government, schools and non-profit customers without being subject to regulation as a public service corporation. This decision should clear a path for other companies to also provide PPA service to non-profit entities. This decision does not, however, address whether PPA service may be offered to residential and for-profit customers. Although the Commission indicated willingness in its open meeting today to allow PPA service to be provided to customers other than government, schools and non-profits, it did not believe that it had a sufficient record before it to rule on that issue at this time. Solar City’s petition to the Commission had only requested the ability to provide service to a limited subset of potential customers and so the Commission felt that a sufficient record had not been developed to rule on the use of PPAs more broadly. The move gutted an opinion by an administrative law judge that solar companies installing devices on school property and then selling the power back to the school be defined as a regulated utility.
Wednesday’s decision could spur growth for companies that install solar units in the state as it opens the door to a swath of potential customers unlikely to buy systems on their own, but that still want to tap into renewable energy.
Background: Last fall, Foster City, Calif.-based SolarCity asked the ACC to forgo regulation of two solar systems it was installing in the Scottsdale Unified School District. The commission allowed those two and one other installation, but decided to review the larger issue. Nonprofits and schools benefit from such installations because they cannot take advantage of federal tax credits that cover 30 percent of a solar system’s cost for businesses and individuals.
Sources: Phoenix Business Journal, Kevin T. Fox