Arizona Commission Opens Benefit/Cost docket for DG

The Arizona Corporation Commission (ACC) has opened a docket and issued a memo on January 27, requesting comments on the process and methodology for establishing the costs and benefits of distributed generation (DG), including net metering systems. A number of DG costs and benefits were identified in an Arizona Public Service Net Metering Cost Shift Solutions docket that concluded late last year.

The ACC provided a list of potential DG benefits and cost categories in the memo:


  • Distributed Energy Capacity Value (MW)
  • PV System Orientation
  • Avoided Generation Capacity (new generation $)

Grid Support Services

  • Ancillary Services
    • Reactive Supply & Voltage Control
    • Frequency Regulation
    • Energy Imbalance
    • Operating Reserves
    • Scheduling / Forecasting
    • DG System Integration Costs

Avoided Costs / Financial Risk

  • Avoided Power Plant Capital Costs – Customer’s Capital Contribution
  • Avoided Fuel / Purchased Power Costs
  • Avoided Fuel Hedging Costs
  • Avoided Line Losses
  • Avoided / Delayed Transmission System Investment
  • Avoided / Delayed Distribution System Investment
  • Avoided Renewable Energy Standard Cost
  • Avoided Utility Administration Costs
  • Avoided Market Price Mitigation (reduction of wholesale market clearing prices for natural gas and electricity)
  • Avoided Variable Operation & Maintenance Costs
  • Avoided Fixed Operations and Maintenance Costs
  • Avoided Power Plant Decommissioning Costs

Security & Reliability

  • Grid Security
  • Grid / Service Reliability


  • Water Consumption
  • Cost of Environmental Compliance
  • Health Effects (Benefits)
  • Non-Compliance Environmental Effects


  • Economic Development and Jobs
  • Civic Engagement / Conservation Awareness
  • Ratepayer / Consumer Interest
  • Ratepayer Cross-Subsidization
  • Technology Synergies
  • Energy Subsidies (incentives, rebates, tax credits, etc.)

Comments are due February 14, 2014.

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