Arizona Corporation Commission votes to eliminate renewables targets
On February 6, 2024, members of the Arizona Corporation Commission (ACC) initiated a proceeding to eliminate energy efficiency and renewable energy rules that conservative regulators say have cost the state’s electricity consumers billions of dollars but no longer provide much in system benefits, according to Utility Dive.
This move, initiated on a 4-1 vote with Republicans voting to sunset the mandates and the lone Democrat voting to keep them, marks the first time a state has moved to completely remove its mandates for wind, solar, and energy efficiency measures. These measures have cost the state $3.5 billion since they were implemented in 2005.
Commissioner Kevin Thompson, a Republican who voted to repeal the mandates, criticized what he called outdated mandates that involve “incentives and giveaways left and right.”
“I welcome utility programs that actually reduce energy consumption and meet avoided costs but not under the threat of commission mandates that can be easily hijacked by financially interested stakeholders.”
Solar and wind special interest groups pushed back at the cost of the program, suggesting these mandates have been beneficial to consumers, but recent filings by Arizona Public Service indicate that its rush to wind and solar is driving up electricity rates:
In this Application, Arizona Public Service Company (APS or Company) seeks a net increase in base rates of $460 million, or 13.6%, to become effective on December 1, 2023. The requested increase is necessary for APS to continue making the investments required to maintain a reliable, resilient, and clean energy grid for its customers today and into the future.
APS explained the company’s situation in more detail:
APS’s last rate case concluded on November 9, 2021, and was based on a test year that ended on June 30, 2019. A variety of factors have changed since the conclusion of APS’s last rate case, including significant investment in plant and infrastructure, revenue and expenses, the cost of capital, customer growth, compounded inflationary pressures, and disruptions to the global supply chain.
Among the items listed for the investments made by the company include infrastructure for EV-charging stations and three new renewable projects.
The ACC’s decision to repeal Arizona’s mandates for wind and solar is a commendable first step toward protecting ratepayers from rising prices and preserving grid reliability, but the Commissioners will also need to deny Green Plating requests from the State’s utilities if these goals are to be realized in the coming years.