Debate over demand charges is a quagmire of misinformation

April 22, 2016
Nogales International
Chuck Schmidt

Recently, a little known and highly misunderstood concept has come to be the focus of several hearings throughout Arizona.  I am speaking of the demand charges proposed by UNS electric in Mohave and Santa Cruz Counties. 

While it has been wonderful to see so many citizens come forward on the subject, it has also been disheartening to hear the misinformation, unsubstantiated claims, and scare tactics being told to people about implementing demand charges.  I support demand charges and I also support going solar.

Current net-metering consumers who do not have rooftop solar must pay their own regular utility rates PLUS share the financial burden that rooftop customers avoid[1]. Getting rid of net-metering takes this burden off lower-income Arizonians.                   

Another misconception is that moving to a system of demand charges will kill our solar industry, this is simply untrue. Opponents like to use Nevada as a cautionary tale; however they fail to disclose the full story.

When Nevada changed its net metering policy earlier this year, Vivint Solar, SunRun, and Elon Musk’s SolarCity fled the state and boycotted them to restore net-metering. They also pressured consumers by telling them they had to install before the change to demand charges. When you look at the decreased number of installations immediately after demand charges took effect, it wasn’t because solar companies couldn’t install…it’s because they were holding their services for ransom.

In truth, moving to a new rate design will compel solar vendors to change their business model from chasing subsidies to competing. If some players refuse to adapt, new players will enter a free market where competition creates better products and lower prices for consumers.

Most consumers will actually save money on demand charges.  It is insulting when the opposition claims that everyday people do not possess the ability to understand demand charges. It’s as simple as being aware. Typically the highest demand times for power are 5pm-9pm Monday through Friday[2]. You can still use basic electricity and by waiting to do that load of laundry till later, you can save money by not ‘demanding’ extra electrons during peak times.

I am pro-solar. I have lived in Arizona for 20 years with my family and have chosen to make it our home. I am proud of our state. I believe that we should be leading the way in solar usage…but using a fair and sustainable business model. The only way to do this is by moving to demand charges.
Chuck Schmidt is the President of Market Freedom Alliance. Learn more about him here.



Victory for Arizona’s Wineries!

April 1, 2016

SB1381, “Free the Grapes” direct wine shipping bill signed by Governor Ducey
will replace archaic law with winery visit penalty
PHOENIX, AZ –  Yesterday Governor Doug Ducey brought Arizona residents into the digital age by signing SB1381, which will allow wine consumers in Arizona to have wine shipped directly to their home or business from any licensed domestic winery, regardless of size and without requiring a visit to the winery. The Arizona State Legislature on Thursday, March 24, 2016 passed SB1381, commonly called the “Free the Grapes” bill on a 28-1-1 vote, Governor Ducey’s signature was the last step to enacting the law. 

The Arizona wine industry was supportive of the bill. Rod Keeling President of the Arizona Wine Growers Association was excited to hear the news and said, “This is a tremendous opportunity for the Arizona wine industry to progress and grow. We appreciate Senator Nancy Barto, Governor Doug Ducey and all those who worked so hard to see this bill become law.” 

Arizona consumers will be able to hav wine shipped directly to their home or business from any licensed

 winery in the United States; the first winery licenses should begin to be issued late fall 2016, no later than January 2017. The signing of SB1381 into law increases the case limit per winery to a graduated limit of six (6) cases in 2017, nine (9) cases in 2018, and finally twelve (12) cases in 2019 from any U.S. winery licensed to ship to Arizona without the burdensome “winery visit penalty”.

The legislation was sponsored by Senator Nancy Barto (R-15) who expressed concern about the restriction on the rights of Arizona consumers to access products that residents of others states may easily, legally, and safely have delivered to their homes. Sen. Barto had this to say when asked what motivated her involvement in this movement, “Folks living in Arizona should have the same consumer abilities as those in other states. This law removes those barriers for Arizona wine consumers.”     

The “Free the Grapes” bill (SB1381) will replace an archaic law — shared by only three states — requiring Arizona consumers to be physically present at medium and large wineries prior to being able to order wine shipped directly to their home or business, and then they are presently limited to only two cases per year.  SB1381 removes the burdensome “winery visit penalty” and increase the limit on the number of cases an adult consumer could order annually. 

The bill was supported by wine consumers, free market advocates, and a variety of Arizona residents who championed this cause based on the unfair restrictions that other states had removed. The campaign to “Free the Grapes” was an effort to free the restriction and was led by Arizona consumers.