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Arizona regulator seeks efficient path for 80% clean energy rule


Dive Brief:

  • Arizona regulator Andy Tobin has filed a set of proposed rules that would implement his Arizona Energy Modernization Plan to put utilities on a course to supply 80% renewable or nuclear power by 2050.
  • Tobin’s proposal is to merge his plan with the state’s existing Renewable Energy Standard and Tariff (REST), which he says would create no new credits or other rulemaking dockets.
  • The resulting Clean Resource Energy Standard and Tariff (CREST) would also require utilities to roll out 3 GW of energy storage by 2030, and implement reforms to grow the use of energy efficiency, electric vehicles and biomass energy.

Dive Insight:

The real meat of Tobin’s proposal — the clean energy and storage mandate — has been out since January, but he had not yet addressed how to implement the policy. Merging the modernization plan into the state’s existing renewable tariff makes for a simpler process, Tobin told fellow Arizona Corporation Commission members in the July 5 filing.

The CREST rule will serve as “an umbrella to house not only the unchanged REST language and targets, but also the new Clean Peak Standard, Bioenergy Production Requirement, and 2030 Energy Storage and 2050 Clean Energy Goals the Plan originally proposed,” Tobin wrote in the cover letter to the proposed rules.

“I believe this approach not only allows the CREST umbrella to fully unfold before the Commission begins additional processes, but also ensures that each of these important issues is given its full and respective opportunities to be heard,” Tobin said in the filing.

Tobin’s proposal, in addition to requiring energy storage and 80% clean energy, includes the 2030 Clean Peak Standard, which calls for utilities to deliver increasing amounts of emissions-free electricity during peak hours. The proposal also calls for utilities to procure 60 MW of biomass energy to help thin Arizona’s forest underbrush, which worsens wildfires.

The commission is expected to consider the proposal at its next open meeting, on July 19.

The state’s investor-owned utilities have already met Arizona’s 15% renewable energy mandate. Tobin’s proposal comes as the companies are considering how to add resources, amid considerations for natural gas. Arizona Public Service is considering 5.3 GW of gas generation by 2030, more than doubling its current capacity. And Tucson Electric Power’s latest integrated resource plan includes nearly 360 MW of new gas by 2032, a 30% increase in gas capacity.

Utilities have filed comments about Tobin’s modernization proposal, expressing some concern about the potential impacts on customer rates. However, they were also optimistic about their ability to meet the goals.

But there was some outright opposition. Freeport Minerals Corp. and Arizonans for Electric Choice and Competition filed joint comments opposing any government mandates. “Competition is the best energy solution as mandates have unintended consequences,” they told regulators, warning of possible short- and long-term cost increases.

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