Arizona Advocates Continue Push for Utility GHP Incentive Program

Geothermal heat pump advocates in Arizona led by new GEO Member Green Earth Energy & Environmental, Inc. followed up a personal meeting on April 18 with state Corporation Commissioner Susan Bitter Smith with a definitive letter, stating their needs and reasoning for a reimplementation of geothermal incentive funds. Geothermal Exchange Organization (GEO) President Doug Dougherty attended the meeting and provided input for the letter, which spells out the many benefits of geothermal heat pumps (GHPs) to utilities and ratepayers, including:

• More efficient in hot weather conditions than air-source heat pumps;
• Potential .65 kW peak demand decrease per ton of capacity installed;
• Potential new revenue stream for utilities with metered ground loops;
• Zero maintenance after a geothermal loop is drilled; and,
• Zero infrastructure, with no transmission losses or variation in output.

“We propose that re‐instating the geothermal incentive fund is the first step towards fully realizing the benefits of geothermal technology for Arizona ratepayers,” the letter continued. “This program could be reinstated retroactively to Jan. 1, 2014, or could be approved as part of the 2015 Renewable Energy Standards and Tariff (REST) Plan.”

“In either case, we propose an alteration and a reduction to the former geothermal program. In 2013, the last year that incentive funds were available, APS offered $0.80/kWh saved. We believe that this incentive level is appropriate for retrofitted systems, which present unique challenges and can be more costly to construct on the footprint of existing buildings.”

“In contrast,’ the letter concludes, “a lower $0.40/kWh saved incentive would be appropriate for new construction. In both cases, these incentive levels allow for a modest payback that is under the critical 10‐year mark. In our experience, even though the benefits will last for the life of the building, systems that do not pay back in less than 10 years are not attractive to property owners.”

The geothermal advocates’ goal is to start a dialogue with major utility Arizona Public Service (APS) about reinstating the geothermal incentive, with hope that they will integrate such a program into their annual renewable energy plan to be issued in late-June or early July. If APS does not respond favorably to reinstating the incentive, Commissioner Bitter Smith’s office can sponsor an amendment to the REST Plan, which the Commission might vote upon later this year.

The group will present the efficiency and peak electric load reduction benefits of geothermal heat pumps in Commissioner Bob Burns’ “Technology Docket” workshop on June 25. The event will educate the commissioners about “game-changing” electric utility technologies across the country. The venue will provide an excellent opportunity to raise their collective awareness of GHPs.