Foes of a mandate on public utilities to buy or generate power from solar, wind and other renewable sources will ask the Legislature next year to pull the plug on those efforts.
Clint Bolick of the Goldwater Institute said the Arizona Corporation Commission should not be telling companies where they should get their energy. Goldwater added that many of these sources are more expensive than the power generated by nuclear and coal plants.
Bolick is seeking legislative intervention after the Arizona Supreme Court last month rejected his claim that the commission acted beyond its legal authority in adopting the renewable-energy standard. It requires regulated utilities to obtain 15 percent of their power from renewable sources by 2025.
The justices, without comment, upheld an appellate-court ruling that turned away Bolick’s claim that the Arizona Constitution limits the commission’s powers solely to setting rates.
In essence, the appellate judges accepted the commission’s argument that the requirement to use more solar, wind and other renewable sources ensures that utilities have adequate supplies from various sources. Commission Chairman Gary Pierce said that certainly fits within the purview of the panel.
Pierce said, though, that foes are free to ask the Legislature to trim the commission’s power. And that, Bolick said, is exactly what he intends to do.
This would not be the first such effort.
House Majority Whip Debbie Lesko, R-Glendale, introduced a plan to do just that two years ago. And she even got it approved by a committee.
That, however, was before Gov. Jan Brewer intervened, saying she did not want lawmakers to approve anything that the state’s nascent solar-energy industry would interpret as a sign Arizona is anything less than friendly toward solar.
That move caused many of her Republican co-sponsors of the legislation to flee, forcing Lesko to kill her plan.
She told Capitol Media Services recently that she remains very much interested in getting the law changed.
Lesko said part of her concern is that these renewable sources are more expensive. And the commission has allowed utilities to pass on much of that cost to its ratepayers, the trigger that gave the Goldwater Institute the right to sue on behalf of several utility customers.
But she said the problem is more complex.
“I personally do not like when the government mandates things,” she said. “I would prefer if the market decided,” leaving the question of sources of power up to the utilities.
The deeper issue, she said, is that if there is to be a mandate, it should be the Legislature that sets the energy policy of the state, which is what her legislation seeks to do.
Gubernatorial press aide Matthew Benson said his boss, who helped deep-six Lesko’s earlier bill would be interested in seeing any new legislation. But he indicated that some of the concerns that caused Brewer to work against the 2010 measure remain.
“She is focused on renewable energy and solar energy for the economic development of the state,” Benson said.
Arizona has worked for years to attract solar firms to the state, both the companies in the business of building and operating large-scale generating plants and those that make and install the photovoltaic cells suitable for business and individual use.
Both types of energy give utilities credit toward that 15 percent mandate.
The industry fears anything that might undermine the mandate for utilities to buy more of what they sell.
Lesko said that opposition remains on her mind, which is why she will work solely to transfer authority to set the standards from the commission to the Legislature and not seek to alter the requirement itself.
“Trying to eliminate it, trying to lower it, is a real uphill battle,” she said, especially with the big push to increase the number of solar companies in the state.
Bolick said he recognizes the political problems of scrapping the mandate.
“The Legislature has been cowed by the solar industry into submission,” he said.
The commission rules allow Arizona Public Service to charge an additional penny for every kilowatt-hour, up to $4.05 a month for residential users. Most commercial customers can be billed up to an extra $150.53 monthly, with a $451.60 cap for larger industrial users.
For Tucson Electric Power, the current surcharge is seven-tenths of a cent per kilowatt-hour, up to $4.50 monthly for residential customers and $160 for small commercial customers. The largest can be charged up to $5,500.
Bolick called the Supreme Court ruling “dangerous and unprecedented.”
“It gives the Corporation Commission pretty much unfettered power to regulate the policies of utilities,” he said, beyond the basic function of regulating the rates of the companies.
But the court agreed with the commission’s contention that forcing utilities to diversify their sources of power, even if there is an up-front cost, does have a direct effect on future rates.
In writing the Court of Appeals ruling that the Supreme Court upheld, Judge Margaret Downie said the commissioners concluded that continued reliance on the fossil fuels of coal and natural gas is inadequate and insufficient to promote and safeguard the security, convenience, health and safety of utility customers and is therefore “unjust, unreasonable, unsafe and improper.”
Downie also said there is evidence that reliance on a few sources of power makes the utilities and their customers more susceptible to both price fluctuations and shortages, citing a rate hike sought by Arizona Public Service Co. when natural-gas prices spiked.
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