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A battle between the solar-panel industry and a major utility in Arizona is heating up.

The fight is over net-metering rules, which require utilities to purchase excess electricity produced by solar panel–owning customers. Hearings to consider proposed rule changes are scheduled for next month.

A lot of money is at stake — for Arizona Public Service Co., the utility pushing the proposed rule changes, and also for solar installers and solar-panel owners.

APS wants to slash its payments to each solar-panel owner by between $50 and $100 a month. It says the payments are a burden on customers who don’t own solar panels. The solar industry, meanwhile, is saying the proposed changes would cripple its growth.

The Arizona Republic paints a picture of a utility desperate to sully solar’s reputation as it seeks to build support for its proposal:

As part of its strategy, Arizona Public Service Co. sent cash to two non-profit groups that support the utility’s goal to make solar customers pay higher bills. …

APS’ marketing campaign includes its own television ads explaining its commitment to solar. The cash sent to the two non-profits is helping to pay for ads and websites that use a more negative tone toward the solar industry. …

APS recently acknowledged to The Arizona Republic that it provided money to a Washington, D.C.-based conservative organization called 60 Plus, which focuses on seniors’ issues such as taxes, Social Security and Medicare.

It also gave money to another non-profit called Prosper, which was launched this year by Republican Kirk Adams, a former Arizona House speaker. …

60 Plus began criticizing SolarCity and Sunrun, comparing them with Solyndra, the California solar company that took more than $500 million in federal assistance and then filed for bankruptcy.

Soon after, Prosper joined the debate on the side of APS. Prosper has been running television commercials calling for changes to net metering.

The solar industry is responding with its own campaign, which claims the utility’s proposal would “tax the sun.” The industry founded TUSK, or “Tell Utilities Solar won’t be Killed,” which has been criticizing APS and its proposal to change net-metering rules.

How far will APS go to get its way? A clue comes to us from another story in The Arizona Republic, which reveals that a plan was developed four years ago to engineer false controversies to wreck the reputations of members of the Arizona Corporation Commission, which regulates the utility:

The plan proposed that APS fund a $4.3 million campaign using out-of-state non-profit groups to generate “fake controversies” regarding the Arizona Corporation Commission. Those controversies could sway voters and lead them to elect new regulators, the plan suggested, or could influence legislators to add additional seats on the commission.

The plan, titled “The Institute for Energy Policy,” was drafted by Lincoln Strategy Group, a Tempe-based political-consulting firm. It was presented to the utility’s chief executive soon after a contentious APS rate-increase case was settled by the commission, which regulates rates for most of the state’s utilities.

APS officials said the utility did not solicit the 20-page plan, which was obtained recently by The Arizona Republic. A company official called it “absurd.” Don Brandt, company chief executive, said he “immediately dismissed” the proposal in 2009.

After the report was presented, however, APS hired one of the two Lincoln Strategy employees who pitched the report to Brandt. She now serves as the utility’s top lobbyist. The other executive who pitched the report also left Lincoln Strategy and is being paid by APS as an outside consultant.

“On its face it appears to be a very difficult goal to completely eliminate the (Arizona Corporation Commission), and a more long-term approach is suggested,” the plan stated. “We would propose using calendar years 2009 through 2011 to … begin to sway public opinion against the (commission) and use 2012 to implement the electoral strategy.” …

Some strategies described in the 2009 plan from Lincoln Strategy appear similar to those in APS’ current media campaign over solar.

As the Arizona Corporation Commission still hasn’t been eliminated, it plans to hold hearings on APS’s net-metering proposal in November. We’ll let you know what happens.

See also: Solar panels could destroy U.S. utilities, according to U.S. utilities — and more in our series on utilities and clean power