The Arizona Corporation Commission rejected adopting a package of new, statewide clean energy rules following a 3-2 party-line vote from the commissioners on Wednesday.
The ACC, which regulates most of the electricity providers in the state, had been considering this rule package for years, workshopping and compromising on details since 2018. The measures had support from APS, Tucson Electric Power, the Arizona Technology Council, the Sierra Club and many more but ultimately failed after a surprising vote from Commissioner Jim O’Connor.
Just last May, O’Connor voted in favor of this rule package after reaching a compromise with Commissioner Anna Tovar, according to the Arizona Republic, but in the Wednesday vote O’Connor joined fellow Republicans Commissioner Justin Olsen and Chairwoman Lea Márquez Peterson in voting against the proposal.
“I have concluded that the utilities are serious and sincere with their commitments to clean energy,” O’Connor said in explanation of his vote. “I see they face pressures, some helpful, some unhelpful, from a variety of sources, including from Wall Street and the federal government. I concluded they do not need these state level energy rules at this time, which impose risks for ratepayers.”
If approved, the proposed rules would have required utilities to cut carbon emissions in half by 2032 and reach 100% emission reduction by 2070. The rules would have also imposed greater utility accountability measures, required utilities to install greater battery storage capacity on their grids and more.
“This is a sad day for Arizona, the vote we just took represents one of the worst that has occurred at this commission in recent memory,” Commissioner Sandra Kennedy said during the meeting. “This is an embarrassing episode and leaves me wondering if I can take the word of some of my fellow commissioners in the future.”
Arizona is just one of 11 states in the country that has an elected, rather than appointed, board of utility commissions, a system that ensures politics are ever-present on the commission.
Shelby Stults, who leads Arizona policy research at the trade group Advanced Energy Economy, said it was upsetting to see such a comprehensive package of rules fail on Wednesday.
“It’s really disappointing because it is going to impact business development and regulatory certainty for electricity generation in Arizona, and ensuring that companies who are interested in relocating to a state that has very clear, clean energy goals,” she said. “There’s currently nothing on the books now, this was the Corporation Commission’s attempt at really formalizing that. So seeing that fall flat is really disappointing.”
Stults said the vote could have an impact on the 69,000 Arizonans working in the advanced energy sector.
Bill would limit utility competition
Separately, members of the Arizona House have proposed legislation that would block the possibility of increased competition in Arizona’s electricity market, eliminating the ability of ratepayers to choose which company provides their power.
Republican Gail Griffin sponsored HB 2101, which was drafted in response to Green Mountain Energy’s application to enter Arizona’s utility market last year. HB 2101 is working its way through the House.
Retail providers, like Green Mountain, are technically allowed in Arizona, but as of yet none have been approved to operate in the state.
Green Mountain, a subsidiary of Houston-based NRG Energy (NYSE: NRG), is not the first company to apply to enter the market, but commissioners have been more open to this application than others filed in the past.
Last week Green Mountain said it would source 100% clean energy for Arizona customers by working with Sawtooth DevCo, LLC, pending approval by the ACC. Under their agreement, Green Mountain would purchase the energy generated by Sawtooth.
“Arizona’s current electric monopolies are actively attempting to block the ability of all customers to choose GME’s 100 percent local renewable product through efforts at the legislature,” the company wrote in a statement. “If their efforts succeed, this freedom for Arizonans to choose their electric provider and products they desire would be denied.”
SRP and APS, which currently have monopolies on providing power in the Valley, both support the bill. Green Mountain is hoping to move into APS and TEP territory; SRP is a nonprofit and not regulated by the ACC.
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