S&P Global Offerings
Featured Topics
Featured Products
Events
S&P Global Offerings
Featured Topics
Featured Products
Events
S&P Global Offerings
Featured Topics
Featured Products
Events
Banking & Capital Markets
Economy & Finance
Energy Transition & Sustainability
Technology & Innovation
Podcasts & Newsletters
Banking & Capital Markets
Economy & Finance
Energy Transition & Sustainability
Technology & Innovation
Podcasts & Newsletters
S&P Global Offerings
Featured Topics
Featured Products
Events
15 Jan, 2021
By Jeff Stanfield
A bill has been introduced in the Arizona House of Representatives to place authority over the choice of electricity generation resources in the hands of the state legislature instead of the Arizona Corporation Commission, but two commissioners protested the proposed takeover.
"The Corporation Commission may not adopt or enforce a policy, decision or rule that directly or indirectly regulates the types of critical electric generation resources used or acquired by public service corporations within this state's energy grid," says House Bill 2248, which Natural Resources, Energy & Water Chairman Gail Griffin introduced on the legislature's opening day Jan. 11.
In a specially called staff meeting on Jan. 15, the commissioners split 3-2 over whether to adopt a neutral position on the bill. Commissioner Sandra Kennedy said the bill is unconstitutional and protested that a majority on the commission is taking steps to surrender their authority. "I am saddened that a majority of this commission would rather give up their duties to the legislature and let them make decisions for us," Kennedy said.
Commissioner Anna Tovar objected to the commission officially establishing a neutral position, saying the commission's role is to regulate utilities and establish where they get their energy. "This is a power grab within the legislature," Tovar said.
Legislation targets proposed clean energy rules
The commission is considering a new set of proposed clean energy rules that would require a carbon-free electricity supply by 2050. However, the bill says "critical electric generation resources" include natural gas, coal or any other petroleum fuel source as well as solar, wind, nuclear and other carbon-free resources. The commission proposed the clean energy rules before new commissioners Tovar and Jim O'Connor were elected to replace former commissioners Bob Burns and Boyd Dunn.
The commission's previous move to adopt clean energy rules now appears to be in doubt. O'Connor voted in support of the commission adopting a neutral position on the bill, saying, "Weighing in with a neutral position seems a perfect way to inaugurate a friendly cooperative spirit in dealing with the legislature."
Commissioner Justin Olson, who has opposed setting clean energy requirements unless they produce the most just and reasonable rates for consumers, said he is in agreement with the broad objective of the bill. "Frankly, my position has been that the commission's role is much more narrow than some present and former members of this commission have expressed," Olson said.
Commission Chairwoman Lea Márquez Peterson said it is important that the commission adopt an official neutral position in order to participate in a Jan. 19 legislative hearing so the commission staff can inform legislators. Tovar objected there was no need to rush a decision because there will be more opportunities in the legislative process to weigh in. Sending a neutral position when two commissioners object to the legislation is confusing and wrong, she said.
Senator files companion bill
Peterson said she wants the commissioners to meet again on the same day as the House committee hearing to discuss taking a position on companion Senate Bill 1175, sponsored by Republican Sen. Sine Kerr. "I want to meet next Tuesday to have the same discussion," she said. The Senate Natural Resources, Energy and Water Committee, of which Kerr is chairman, is slated to take up that bill on Jan. 20.
"Policies that restrict or ban critical fuel and energy resources will result in higher electricity prices, harm economic growth, reduce grid reliability and damage Arizona's energy independence," both bills say.
Both bills say the legislature must expressly authorize any policy, decision or rule that regulates such resources. Further, any decisions with respect to generation resources should make affordability and reliability a priority, the bill says.
The ACC regulates utilities including two large electricity providers in the state: Pinnacle West Capital Corp. subsidiary Arizona Public Service Co. and Fortis Inc. subsidiary Tucson Electric Power Co. Pinnacle West in January 2020 said it will aim for a carbon-free power generation portfolio by 2050, and Fortis in September 2020 said it aims to cut its carbon emissions by 75% by 2035 compared to 2019 levels, largely by Tucson Electric shutting its coal-fired power plants and adding wind, solar and energy storage resources.