Arizona Law Backed by Utilities Declaws Clean Energy Mandates

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By Brenna Goth

Arizona preemptively struck at efforts by a citizen’s group to boost the amount of clean energy the state’s utilities must use to generate electricity.

Gov. Doug Ducey (R) signed fast-tracked legislation March 23 aiming to declaw higher renewable energy mandates Clean Energy for a Healthy Arizona wants to bring to voters this year. Under the new law, utilities would be subject to only nominal fines if they fail to meet the increased clean energy targets.

The bill, debated for two weeks, is a blow to the ballot initiative proposed by the group that would require the state’s utilities to provide 50 percent of their electricity from renewable sources by 2030. The existing requirement by regulators is 15 percent renewable energy by 2025.

Arizona’s largest electric utility, Arizona Public Service Co., pushed the bill. The penalties for missing increased clean energy targets would range from $100 to $5,000 under the new law.

The clean energy group is moving forward to put its proposal on the ballot, Pita Juarez, communications director for Clean Energy for a Healthy Arizona, told Bloomberg Environment.

APS spokeswoman Jill Hanks said the company supports the law because it is good for customers. The new law would apply to all renewable energy mandates in the state, although APS representatives said they are on track for the 2025 goals. The law takes effect 90 days after the Legislature adjourns this spring.

APS: ‘Protect the People’

Clean Energy for a Healthy Arizona has to collect nearly 226,000 signatures by July to get its measure on the 2018 ballot. Its effort is backed by NextGen America, an organization founded by billionaire Tom Steyer that is supporting similar legislation in Michigan and Nevada.

Legislators who supported the penalty bill said they are tired of out-of-state groups pushing policies in Arizona. APS, a subsidiary of Pinnacle West Capital Corp., and some Arizona business groups have called the proposed renewable energy mandates aggressive, risky, and irresponsible.

Clean Energy for a Healthy Arizona argues Arizonans will save money under the clean-energy mandate while improving the state’s air quality.

The legislation will shield electricity customers from the higher rates that would follow if the ballot measure passes, said Rod Ross, who represented APS at a committee hearing on the bill. Instead, APS would work with lawmakers and regulators on its course of action, Ross said.

“We feel like it’s important to protect the people of this state,” Ross said.

Company representatives declined to answer specific questions from Bloomberg Environment about the legislation but called the ballot initiative bad for customers.

“It will dramatically increase electricity bills, kill thousands of jobs, eliminate millions in tax revenue, potentially increase carbon emissions in Arizona and make our state a less attractive place to do business,” the company said in a statement.

Law Unconstitutional?

Opponents of the penalty measure called it an unconstitutional attack on the right of voters to decide the state’s energy future. They argue the law violates several parts of the state’s constitution, including taking power from state regulators.

“We can—and should—be able to vote on whether we begin to harness the power of living in the sunniest state in the country,” Clean Energy for a Healthy Arizona said in a statement after Ducey’s signature. “This unconstitutional and dirty APS bill will not stop us from fighting for our right to a clean, healthy Arizona.”

The debate comes as the Arizona Corporation Commission, the state’s elected utility regulator, is exploring its own increases to renewable energy standards. One commissioner’s proposal calls to increase renewable energy rates to 80 percent by 2050.

That plan would consider nuclear energy as a renewable source. Arizona’s Palo Verde Generating Station is the nation’s largest nuclear plant.

The penalty law could apply to those changes, as well as current standards. APS’s Ross told legislators the company isn’t trying to avoid current goals and already is close meeting them.

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