Arizona PSC Comments

October 28, 2014

Commissioner Susan Bitter Smith
Arizona Corporation Commission
Commissioners Wing – 1200 W. Washington – 2nd Floor
Phoenix, Arizona   85007

Dear Commissioner Bitter Smith:

Thank you for meeting with the Geothermal Exchange Organization (GEO) last spring, and the opportunity to share the benefits of geothermal heat pump systems (GHPs) in Arizona. We discussed Western Farmers Electric Cooperative’s study of their incentive program. They found GHPs saved 4x the electricity (.65 kw/ton) compared to air-source heat pumps (ASHPs) under peak demand conditions. We also talked about how SEER ratings for ASHPs show a seasonal efficiency average, belying the sharp drop in efficiency that occurs during hot summer weather conditions. In contrast, GHPs maintain consistent efficiency year-round by drawing upon the constant temperature of the earth.

Considering these facts, we contend that it makes little sense for utilities in Arizona to currently offer rebates for high-SEER ASHPs, but no incentives for GHPs. We believe that reducing peak power demand and keeping residents cool during the hot summer months should be a priority for Arizona energy policy. Including GHPs in rebate programs makes financial sense for utilities by reducing the need for expensive peaking power, and for ratepayers by reducing the amount of peak kilowatt-hours they need to purchase.

Seventy percent of average household’s energy consumption is used to meet thermal loads. By incenting GHPs, Arizonans can help tame the single largest contributor to their utility costs. Reinstating GHP incentives for Arizona Public Service (APS) customers would be incredibly simple. APS last offered incentives for GHPs in 2013, so that program could be brought back. The proposal on the following page details what APS’ 2015 geothermal incentive program could look like and provides more context regarding the 2013 APS rebate program fir GHPs. If you have any questions, please contact us.


Douglas Dougherty, President and CEO
GEO – The Geothermal Exchange Organization