Arizona energy regulators worked for years on requirements to direct the state's transition to 100 percent carbon-free electricity by 2050. But in a final vote held early this month, those efforts ultimately fell short. The proposed energy rules were declared dead.
Now, a revival is in the works.
Several days after the Arizona Corporation Commission voted against passing the rules — even after having tacked on numerous amendments weakening them — Commissioner Sandra Kennedy called for them to be reconsidered. The request could compel the commission to vote yet again.
The early May rejection of the energy package came as something of a surprise; the commission had already given the rules an initial stamp of approval in November. But amendments approved the day of the final vote, including one that stripped the 100 percent carbon-free standards of their full regulatory force, prompted two Democrats and one Republican to vote no, leading to the rules' failure to be approved.
Kennedy hopes to return to the unamended version, which was crafted with the input of numerous stakeholders over the span of several years.
“To see amendments offered to water down the rules just made it laughable,” said Kennedy. Approving the rules as goals rather than enforceable standards, she said, essentially rendered them "meaningless."
Most states that have established 100 percent clean electricity mandates have done so with a Democratic-controlled legislature or Democratic governor at the helm. Of Arizona’s neighbors, California, New Mexico and Nevada all have statewide clean electricity targets. Arizona’s halting progress suggests there may be a more difficult road ahead for states that lean Republican.
Interestingly, Arizona's proposed rules already have the support of the state’s largest utilities, Arizona Public Service and Tucson Electric Power. Even traditionally conservative utilities are increasingly establishing carbon-reduction goals. Both of these Arizona utilities have done so.
Commissioners that questioned the final rules largely focused on the costs that such mandates would incur for customers. “I hope to avoid...[an] increased burden on the ratepayers,” said Commissioner Justin Olson, the Republican who voted against the rules, ahead of the vote.
In a February report, commission staff noted that quantifying the costs of the rules “is speculative as the prices of energy resources change over time, as do the technologies available, and it is likely that each utility will be impacted differently depending on their specific circumstances and choices.”
A Strategen report prepared for the Southwest Energy Efficiency Project, a group that supports the rules, found that they would save ratepayers money. An optimal, least-cost portfolio for the state, the report said, would go even further than many of the targets included in the rules, as well as retiring most coal capacity before 2024 and adding 6 gigawatts each of wind and solar. The portfolio would cost $2 billion less than “business as usual,” an 11 percent savings.
In addition to requiring carbon-free electricity, the rules include interim targets for carbon-emissions reduction, energy efficiency requirements and energy storage mandates.
Though several of the state’s commissioners said they are open to reconsidering the rules, it remains to be seen whether a new vote will make its way into a future meeting agenda.
“I am hopeful that we will come together and find a win-win solution that works for all sides,” ACC Chair Lea Márquez Peterson, who holds the power to set the agency's agenda, wrote in a Wednesday filing. She said she would consider addressing the issue in a future meeting.
The commission could also consider certain elements of the energy rules, such as its energy storage requirements, separately. But that route is likely to take longer than a simple revote.
“Reconsideration is probably the best chance to essentially salvage the work that was conducted over three-plus years,” said Ronny Sandoval, director of the Interior West at Vote Solar, a clean energy advocacy group. “It was disheartening to see all that effort and intervention and…not [see] at least some progress on the energy rules.”
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