On Friday, November 13th, the Arizona Corporation Commission voted 4-1, with only Commissioner Justin Olson opposed, to approve a long-awaited update to Arizona’s Energy Rules.
Under Arizona’s existing rules, utilities are required to get 15% of their power from renewables by 2025, a requirement passed in 2006, and to use efficiency measures to meet 22% of their energy demand by this year pursuant to an energy efficiency requirement adopted in 2010.
The new rules, which are the product of an extensive and bipartisan stakeholder process, represent an important step for Arizona toward becoming a national leader in clean energy. The package approved on Friday will require Arizona’s utilities to provide 100% carbon-free energy by 2050, with interim benchmarks between now and then. To reach that robust goal, the new rules take a carbon-reduction approach, which allows utilities to meet the carbon-free requirement by using renewable energy as well as nuclear power and energy-efficiency measures that help customers reduce consumption, rather than a technology-based requirement, which would have required utilities to use a set amount of renewable energy, such as solar and wind, to reach the goal.
The new rules also include an updated energy efficiency standard that requires utilities to implement enough energy-efficiency measures by 2030 to equal 35% of their 2020 peak demand, with interim requirements to ensure utilities are working toward that goal annually. In addition, the new rules include battery storage policies as well as important updates to the Integrated Resource Plan and purchased power agreement processes that will introduce more transparency and competition.
In explaining his yes vote on the rules package, Chairman Burns called the new IRP process “one of the most modern . . . in the country.”
The package passed by the Commission on Friday must still go through a formal rulemaking process before becoming final. That process will include a formal notice of proposed rulemaking, public comment period, and an economic impact analysis. Ultimately, the final package must be approved by the new Commission, which will include existing Commissioners Sandra Kennedy, Lea Marquez Peterson, and Justin Olson as well as new Commissioners Anna Tovar and Jim O’Connor.