Today, the Arizona Corporation Commission voted down, by a vote of 3-2, the energy rules package it has been considering for more than three years. The package before the Commissioners would have required utilities to generate 100% of their energy from carbon-free sources by 2070, with interim benchmarks until then. The package also included a more robust energy efficiency standard, battery storage provisions, and critical updates to the Integrated Resource Plan (IRP) and purchased power agreement processes—including competitive bidding, all-source RFP processes, and prudency reviews—that would have introduced more transparency and competition into the overall process.
Fortunately, today’s vote isn’t the end of the story: the all-source RFP and IRP provisions will still be moving forward. That is because, after the vote on the energy rules package, Chairwoman Marquez Peterson brought forward a separate proposal to open a new docket moving forward with rulemaking on the all-source RFP and IRP process reform provisions on their own. Explaining her motivation in proposing to open a new docket, Chairwoman Marquez Peterson stated that those two provisions are particularly important pieces of the package, and she felt it was important to move forward with them should the rules fail, as they ultimately did. Commissioners O’Connor and Olson agreed with her, and the proposal passed by a vote of 3-2.
This is good news for Arizona. While the carbon-free standards of the now-defunct energy rules package tended to garner the most headlines, the IRP process reforms, and all-source RFP provisions will significantly benefit ratepayers by ingraining transparency, competition, and market forces in the resource planning process. These are important protections for ratepayers and will lead to a more efficient and effective power delivery system for the state of Arizona.
Although speed has not been the hallmark of ACC rulemaking, this docket should move forward on a more expedited basis than did the energy rules package. That is because the Commission will not need to start from scratch. Rather, ACC staff will benefit from all of the work that went into the Energy Rules, basing the new docket on what was included in that package.
The next step is for utilities staff to put together a draft rulemaking, at which point the Commission can vote to proceed to formal rulemaking. If all goes smoothly, Arizonans could see new final rules in six to nine months.