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Solar incentives divide Valley small businesses

PHOENIX — With the price of oil reaching record levels, federal and state lawmakers have started to put major emphasis on research for alternative means of energy.

In Arizona, where we average 325 days of sunlight a year, much of the focus has been turning to solar energy as the state has been implementing solar energy requirements for commercial buildings. At an average cost of $210,000 dollars per solar energy unit, many businesses simply cannot afford to meet the standards required of them.

So in order to encourage the use of solar power and facilitate the process of meeting the solar standards, the state and federal government are offering a variety of financial incentives for business that are going green.

This works well for small companies that are large enough to afford it. But many businesses who can’t are outraged by the use of their tax dollars.

At a recent seminar on sustainability hosted by a local utility company, business owners in the Valley had mixed reactions to the incentives. Some were generally happy with the help they were receiving to go green, while others who couldn’t afford the cost of solar panels were outraged by the fact that their tax dollars were going to pay for their competitor’s installation.

At times, it seemed like the seminar hosted by Arizona Public Service Co. was more of a debate.

“Everyone wants to use solar energy these days,” says Saba Arzanzarrin, vice president of operations for Micor Communications Inc. in Scottsdale, a valley subcontractor for Cox Communications. “What people don’t understand is that solar costs a lot of money.”

To combat the high cost of installation, the state of Arizona offers to pay for 10 percent of the installation cost or as much as $25,000 for one building and $50,000 for two, according to the Interstate Renewable Energy Council website. The Valley’s largest power distribution companies, APS and Salt River Project, offer similar rebates as well.

In addition, if the property meets certain federal requirements, the owner is entitled to deduct 50 percent of the adjusted basis of the property for taxes in 2008. Companies are also entitled to deduct 100 percent of the sales tax on eligible equipment, and APS and SRP are offering similar programs that give discounts for different amounts depending on the watts put out by the solar energy system.

“There are a lot of incentives,” says Joe Arpaia, a spokesman for Vertical Mapping Resources, a company in Scottsdale that provides high resolution aerial photography for clients throughout the United States. “But there are also a lot of regulations that need to be met.”

To meet the statewide, commercial buildings must derive 30 percent of their energy from renewable energy sources by 2012, according to the IREC website.

The state has also been considering requiring net metering systems. Net metering records the amount of re-usable energy and credits the company based on amount of energy used at a given rate. While meeting the standards may prove challenging for some businesses, using the incentives in place should help facilitate the process for some companies.

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>>Email the editor at aklaw@zoniereport.com.

SRP, Navajo square off over hiring practices

PAGE — Utility companies are battling the Navajo Nation in federal court over the tribe’s power to push for preferential hiring of Navajos at a key power plant in the Southwest.

The legal wrangling involves the Navajo Generating Station, which sits on native-owned lands near Page, Ariz. The plant burns coal mined nearby to produce 2,250 megawatts of electricity for customers in Arizona, Nevada and Los Angeles. It also powers the pumps that bring water to Phoenix through the Central Arizona Project canals.

In the 1960s, utility companies approached the Navajo Nation about building a regional power plant in the area. In 1969, a group of utility companies led by Tempe-based Salt River Project signed a lease that opened the $1.1 billion facility for business.

The lease specifically states that the tribe “will no directly or indirectly regulate or attempt to regulate [the utility companies] in the construction, maintenance or operation of the Navajo Generating Station,” according to the 16-page complaint SRP filed recently.

In 1985, tribal leaders passed a new law that required all employers doing business on or near their lands to give certain hiring preferences to Navajo employees and the spouses, plus prevailing wages. It also allowed the tribe’s own labor office to investigate labor disputes at the plant.

Then in September 2004, a plant employee who was Navajo filed a wrongful termination claim against SRP. In March 2005, another employee filed a claim over the same issue.

In both cases, the Navajo Nation’s labor office backed the employees, the tribe’s lower courts backed SRP, and the tribe’s supreme court backed the employees on appeal.

SRP sought help from the U.S. Department of the Interior, the liaison agency for Native American affairs, and asked Navajo judges to wait for its testimony. But judges refused, according to the complaint, and hearings for both cases are now set for the first week of April in Tucson.

SRP claims a Navajo victory could undermine the operation of the power plant. The company is seeking help from U.S. judges, and has hired lawyers from two of the Valley’s most prominent law firms to argue the case.

Phoenix lawyers John Egbert, Paul Johnson and Lisa Coulter are representing SRP.