Lawmakers don’t have the power to mess with utility regulators’ clean-energy rules

Arizona Republic columnist Robert Robb suggests the state would be best served by maintaining an outdated clean-energy standard set in 2006, and that the Arizona Corporation Commission (ACC) lacks the authority to update the standard at all.

Robb’s column (“Arizona Legislature can (and should) override regulators on clean energy mandates,” March 17) misses the mark completely.

He mischaracterized the Arizona Supreme Court’s holding in Johnson Utilities and the nature of the Corporation Commission’s constitutional powers. Additionally, he fails to recognize the many ways in which modernizing our clean-energy rules will benefit Arizona ratepayers, communities, the economy and environment.

Robb is correct that the bills being considered in the Legislature would freeze Arizona’s current energy standard by placing it in statute and forbidding the Corporation Commission from going further. He is wrong that doing so is a good thing.

Businesses want certainty, stability

Not only do these bills represent an unconstitutional power grab by the Legislature, they also create an uncertain regulatory climate for businesses. That poses risks of losing needed economic development opportunities and crucial jobs. Because availability of clean and renewable-energy resources is often a deciding factor for locating in a particular state, companies considering Arizona for relocating or expanding their presence would not have the market stability and certainty they require.

That’s why so many companies have supported the commission’s energy rules package: Recently, more than two dozen businesses and business associations, including Ball Corporation, Google, Microsoft, REI and Salesforce, signed a letter in support of the 100% carbon-free and efficiency standards.

The potential for instability and uncertainty arising should these bills pass is the reason a broad-based coalition of businesses, economic development organizations, utilities, clean energy providers, manufacturers, electric vehicle companies and many others oppose these measures. 

The commission can make these rules

Robb also fails to understand the holding in Johnson Utilities v. Arizona Corporation Commission, a landmark Arizona Supreme Court case decided in July 2020 that outlined the ACC’s authority as set forth in the state constitution.

The constitution grants the commission’s broad authority to regulate public service corporations and breaks it down into two buckets: exclusive authority over ratemaking and permissive authority to make and enforce rules and regulations for the “safety and health” of the public, which the ACC holds concurrently with the Legislature.

Promulgating rules that will reduce carbon emissions, improve energy efficiency and increase the adoption of renewable resources – all of which directly relate to improving air quality and the health of the environment and Arizonans – is squarely within the Corporation Commission’s constitutional power to regulate for public health and safety.

While lawmakers can set energy policy via statute, they lack the power to decrease state utility regulators’ constitutional authority; indeed, as the Supreme Court explicitly stated in the Johnson Utilities ruling, “The legislature lacks the power to decrease the Commission’s constitutional authority.” 

In other words, the Legislature cannot simply forbid the commission from regulating.

We can’t afford this potential instability

Yet, that is exactly what lawmakers are trying to do. The language of the bills before the Legislature, by their very terms, attempts to abrogate the constitutional authority of the Corporation Commission by stipulating that it “may not adopt or enforce a policy, decision or rule that directly or indirectly regulates” electric generation resources or carbon emissions. 

Clean and renewable energy technologies have come a long way since 2006, while at the same time experiencing an exponential drop in generation costs. In that time, Arizona has become a hub of technology and innovation, and a leader in the development of clean and renewable energy technologies – a boon for Arizona’s economy.

Even without reference to actual rules being considered by the Corporation Commission, it is simply foolish and regressive to suggest Arizona should be operating under a clean-energy standard set before some of these new technologies were even developed and when the cost of generating clean energy was much higher.

Although we support the Legislature having a role in energy policy, these bills simply miss the mark. Our state’s economic growth requires stability and certainty, which means we need to get this right the first time. 

Let’s take the time to do it right.

Steven G. Zylstra is president and CEO of the Arizona Technology Council. Doran Miller is state director of The Western Way. Reach them at [email protected] and [email protected].

VISIT HERE to view the op-ed on azcentral.com.