Decoupling scam coming to Arizona

Arizonans: Prepare to pay more for less electricity. It’s called “decoupling” and Arizona Public Service and regulators are trying to sugar-coat the Marxist rationing scheme down your throats.

The Tucson Citizen reports,

If utility regulators approve, Arizona Public Service Co. customers could see a 1 percent drop in their average bill this year and no base-rate increases until 2016.

APS went to state regulators in June asking for a 6.6 percent rate increase, but pressure from consumer groups and low natural-gas prices helped seal a deal more favorable to ratepayers. The state’s largest utility and 20 large customers, consumer groups and other stakeholders have signed an agreement, which must be voted on by the Arizona Corporation Commission, that would hold rates steady for at least a year.

During negotiations, APS agreed to major changes to its rate request in the face of criticism from groups such as AARP. In return, APS would receive one of its key goals: financial incentives for the company to promote energy efficiency…

Utilities typically increase profits by selling more electricity. But now, regulators are asking utilities to be promote efficiency, which means they burn less fuel and generate less pollution.

The most contentious part of the APS rate request was its proposal to “decouple” its rates.

Decoupling is an industry term for a fee utilities can charge to pay for their fixed costs, such as power lines and transformers, that they must maintain even as they sell less electricity to customers when they subsidize efficient air-conditioners and attic insulation or duct sealing.

Utilities seek to decouple their revenues from the volume of electricity they sell so that they can remain profitable without increasing the kilowatt-hours they sell.

The Corporation Commission is requiring utilities to reduce their energy sales by 22 percent in 2020 through increased efficiency, which would be devastating to APS finances without a change in rates, Guldner said.

APS originally asked regulators to approve a fee that would help make up for the revenue it loses when it helps customers save energy by helping them buy more efficient appliances.

But AARP and the Residential Utility Consumers Office, a state department created by the Legislature to represent the public at utility-rate hearings, protested decoupling.

They argued that APS would insulate itself from the business risks of mild weather or blackouts that reduce the volume of electricity it sold because the company could raise its prices to make up for those losses in the name of energy efficiency.

“There was an immense amount of pushback from consumer groups,” Guldner said.

Corporation commissioners approved a decoupling provision for Southwest Gas in December that could mean an additional $1.50 a month on residential bills, but that vote was split 3-2 among the elected officials.

APS, which was negotiating with its stakeholders at that point, backed off its decoupling proposal in favor of a fee.

The fee, called the “lost fixed-cost recovery” mechanism, would be a strict calculation of how much electricity APS is helping customers save when it gives them rebates for things like more efficient pool pumps or duct sealing.

When APS funds those programs, it saves the cost of building more power plants, but it still must pay to maintain the power lines, transformers and other equipment to get electricity to customers.

The fee would ensure that APS is covering those expenses even as it encourages customers to save power or to generate their own power with rooftop solar panels.

The fee is capped at 1 percent a year and would not be charged until April 2013. APS estimates the initial fee would be about a 0.2 percent increase in 2013, based on energy-use and efficiency projections.

A 1 percent cap on the increases would mean it could not be more than about $1.30 a month on the average residential customer…

Wake up Arizona. Decoupling should be rejected because:

• Pay more, get less. Consumers will wind up paying more for less electricity;
• Rationing. Decoupling is the first stop on the pathway to electricity rationing; and
• Anti-capitalist. Through government guaranteed revenues, decoupling undermines fundamental and traditional capitalist business practices and incentives.

You can also judge an idea by its advocates. Obama energy and environment czar Carol Browner, a former muckety-muck with Socialist International, promotes decoupling as means of forcing consumers to use less electricity.