The Arizona Corporation Commission (ACC) voted on May 26th to advance the rulemaking process for the state’s Energy Rules. The rules have been the subject of ongoing debate and an open docket of work for nearly three years. Amendments made to the rules will require a public comment period that will be open until August 20th. After that date and after the results of a costs analysis, the ACC will take a final vote on the package.
Several amendments were adopted during the May 26th Special Open Meeting, the result of the compromises made between Commissioners which helped to win the necessary 3 votes (Kennedy, O’Connor, and Tovar) to advance the rules package. Notable among the amendments was a joint amendment from Commissioner Anna Tovar and Commissioner Jim O’Connor which extended the deadline by which utilities must reach 100% carbon-free emissions from 2050 to 2070, with interim standards beginning with a 50% reduction by 2032, a 65% reduction by 2040, an 80% reduction by 2050, and a 95% reduction by 2060.
Commissioners Tovar and O’Connor offered three additional amendments which were adopted that will add a Ratepayer Impact Measure Test, make changes to the portfolio options utilities must put forth in their Integrated Resource Plans, and add the definition of ‘All Source’ which includes supply-side and demand-side resources.
Chairwoman Lea Márquez Peterson also offered an amendment which was adopted that will allow a utility to seek a fair return on the fair value of the reasonable and prudent, used and useful investments made in demand-side resources, such as energy efficiency and demand response.
Commissioner O’Connor said before the vote:
“I think 100% is a smart target to shoot for, but I really believe the industry needs more time to get there. That implies flexibility and again most importantly leaves the utility companies in control of how they construct their energy portfolios. Let’s have them shooting high. Hopefully in the decades to come there will be very smart public servants in these jobs holding utilities accountable."
Arizona Public Service Company and Tucson Electric Power are already on track to reduce emissions ahead of the new targets. APS plans to be carbon free by 2050 and TEP has announced an 80% carbon free goal by 2035.
TWW has supported the updating the Energy Rules which go beyond emissions reductions and include an updated energy efficiency standard, battery storage policies, and important updates to the Integrated Resource Plan and purchased power agreement processes that will introduce more transparency and competition.