Renewable energy approved
ACC adopts program for APS, other regulated electric utilities by 2025

East Valley Tribune
By ED TAYLOR
November 1, 2006

The Arizona Corporation Commission gave final approval to a program Tuesday designed to increase the use of renewable energy by Arizona electric utilities.

The new standard requires that Arizona Public Service and Tucson Electric Power and other regulated utilities acquire 15 percent of their electricity from renewable sources such as wind, geothermal, biomass and solar by 2025.

The program does not apply to Salt River Project, which as a quasigovernmental entity is not regulated by the commission.

The rule sets the standard next year at 1.5 percent, and the amount increases gradually each year until the 15 percent goal is reached.

The existing renewable energy program adopted by the commission in 2001 set a goal of 1.1 percent in 2007, with nothing projected beyond next year.

To pay for the higher cost of renewables, the new standard suggests a monthly surcharge of $1.05 be added to residential utility bills, which is expected to raise nearly $50 million annually for renewable energy projects.

But the actual amount that consumers will pay will depend on plans that are submitted by the individual utilities to meet the goal.

Also, the program still must be certified by Attorney General Terry Goddard as being legal and constitutional before it can take effect.

Barbara Lockwood, director of the APS renewable energy program, said the utility probably will file its plan with the commission early next year. She said the amount of the surcharge that APS will seek has not yet been determined.

The commissioners approved the new standard by a 4-1 margin Tuesday with commissioner Mike Gleason the lone dissenter. He predicted the cost to achieve the percentages will be far greater than projected. He also said the program will subsidize ineffi cient forms of energy such as rooftop photovoltaic systems.

“We are opening up our pocketbooks to whatever (utility) people want,” he said. “They will charge the ratepayers whatever it takes. This package is going to be very expensive.”

He also said extensive use of renewable energy will degrade the reliability of the state’s electricity grid because wind and solar power is not always available. He also questioned if the commission has the legal authority to impose the standards.

The program was supported by commissioners Kris Mayes, Bill Mundell, Barry Wong and Chairman Jeff Hatch-Miller. In the past, Hatch-Miller has expressed reservations about the cost.

Supporters said the risk of higher costs is offset by the need to reduce the nation’s dependence on fossil fuels from politically unstable foreign governments. They also touted the environmental benefits.

“After three years of hearings and discussions, it is time to move forward,” Wong said. Mayes noted the price of natural gas, a fossil fuel used extensively to generate electricity in Arizona, has skyrocketed the past few years, causing utilities to seek big rate increases from the commission.

“We have seen the disaster of relying on natural gas for fuel,” she said. “It is insane to continue our reliance on natural gas.”

Tina Beattie, owner of GB Restaurants, a franchisee of Denny’s restaurants and Arizona coordinator of Republicans for Environmental Protection, said she would “gladly pay the marginal amount proposed” for protection against rapid future jumps in the cost of fossil fuels.