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Bill targets rules on renewables; Legislature, governor would need to OK regulators’ policies

Arizona has five elected officials at the Corporation Commission who decide policies such as how much solar power utilities should use, but the state Legislature could require a majority of its 90 members and the governor to approve those rules, too.

Representative Debbie Lesko, R-Glendale, has introduced House Bill 2789, which would require any new renewable-energy or energy-efficiency rules from the Arizona Corporation Commission also to win approval from the Legislature before taking effect.

Several officials from the renewable-energy industry have opposed the proposal, saying it would hurt their business.

The Corporation Commission requires utilities such as Arizona Public Service Co. to get 15 percent of their energy from renewable sources by 2025, and also to reduce overall energy demand 22 percent by 2020.

Gas utilities such as Southwest Gas Corp. also are required by the commission to cut demand by 6 percent by 2020.

The rules have been controversial. The watchdog Goldwater Institute has made four unsuccessful arguments to the courts that the Corporation Commission does not have the authority to set such policies.

Any changes or similar new rules dealing with renewables or efficiency would need legislative approval under Lesko’s bill.

The renewable-energy industry is trying to paint the proposal as an attack on solar and wind power in Arizona, citing Lesko’s past attempts to derail those industries though legislation, including her 2010 attempt to get nuclear power listed as alternative energy. Doing that would have meant most utilities already met the renewable standards, and thus eliminated demand for solar and other renewables.

“I don’t dislike renewable energy,” Lesko said. “I don’t have a problem with using solar or wind or things. I don’t care where the energy comes from, if’s coal or nuclear or solar or wind. All I care about is the bottom line of the person paying the bill.”

She said that the government should not set mandates on the types of energy that utilities can produce and she wants more people involved in those decisions than the five corporation commissioners, who should stick to regulating utility rates.

Her 2010 legislation, which she withdrew amid opposition from the industry and Gov. Jan Brewer, would have given the Legislature exclusive control of renewable and efficiency policies.

The original draft of her new bill did not include having the governor endorse such changes, but Lesko said she planned to add that detail.

She listed the bill, and another related bill to require utilities’ energy-efficiency projects to be cost effective with a five-year or shorter payback, among her most important proposals of the session.

“This is effectively getting rid of the 22 percent (energy-efficiency) mandate,” she said of the second bill, HB 2790.

Corporation Commission Chairman Gary Pierce said Lesko’s first bill is not a threat to the work he and his colleagues do at the commission.

“Long term, it probably is a good thing,” Pierce said. “I want to have a lively debate by policy makers on energy issues. I don’t think making legislation or policy should be easy.”

Every year, utilities present a plan to the Corporation Commission for how they will collect fees from their customers and spend the money on rebates for solar power, or to purchase energy from large wind, solar and other renewable projects. They present separate “implementation plans” for how they will meet the energy-efficiency rules.

Once the commission approves those plans, often after weeks of debate and negotiating, the utilities begin putting the plans to action.

Pierce and Lesko said the change would not affect the annual implementation plans, only broad policy changes that the commission enacts after this year.

“I don’t mind (the Legislature) taking heat on policy, and we (at the commission) can work on implementation,” Pierce said. “Most of the fights we’ve seen have been on policy.”

Lesko said that while some solar-industry advocates are criticizing the plan, it also could help protect their industry by requiring the Legislature to review any reductions in renewable-energy requirements.

“It cuts both ways,” she said.

Solar-industry officials said that getting the Legislature involved in renewable-energy policies would bring additional uncertainty and expenses, possibly limiting their growth.

Michael Neary, executive director of the Arizona Chapter of the Solar Energy Industries Association, said he met with Lesko to discuss the legislation and his industry’s concerns.

“She says she is representing the voters in her district who don’t want to pay for solar programs,” he said. “That goes against all of the polls we’ve ever seen come out of Arizona or nationally, where the vast majority of homeowners and voters support greater use of solar energy and ratepayers are willing to pay for it.”

He said that the industry could be constrained if, for example, the Corporation Commission passes an alternative-energy rule at a time when the Legislature is not in session, and it takes longer to put the rule into play.

“We should be working together to create jobs in Arizona, not to create additional layers of regulation that will drive up costs and discourage investment,” he said.