ARIZONA Regulators Approve Higher Renewables Standard

Monday, August 29, 2005

 

The Arizona Corporation Commission (ACC) voted 4-1 on August 10 to set a higher renewables requirement for the state and to raise the rates that utilities may charge to administer the program.

In 2001, Arizona approved a plan that required that state’s utilities to procure at least 1.1% of electricity from renewable sources by 2007, with at least 20% to come from solar.  Arizona utilities have not been held to the standard because they claimed that the authorized rate hikes were not sufficient to pay for the new sources.  The residential surcharge was capped at 35 cents per month and the commercial surcharge was capped at $13 per month. 

According to the ACC’s new plan, the state’s utilities must procure 15% of the state’s electricity from renewable resources by 2025 and submit to an annual review.  The solar requirement was dropped, but a new requirement for local distributed generation was added.  The commission voted to require 30% of the requirement to be met by local onsite renewables (including small wind) installed by homes and businesses.

As part of the renewables portfolio standard, the ACC authorized utilities to increase rates to consumers by up to $2 a month and to commercial customers by up to $75 a month.

Commission Chairman Jeff Hatch-Miller said that diversifying the state’s new electricity plants away from natural gas was an important consideration for him.  “[Natural gas] was a good idea as long as we have enough natural gas,” Hatch-Miller said.  But now the price for natural gas has more than doubled “because we have such a great demand on it.”

“We’re making a statement that the status quo is not acceptable,” Commissioner Marc Spitzer said.  “It’s suicidal for us to ignore renewables when the cost of natural gas is going through the roof and another war in the Middle East sends gas prices (higher).”

The ACC could produce a new version of the draft regulation in the next couple of months, which would be put it on track to have a final vote by the end of the year.  One of the details that remains to be written is the possible penalty utilities would face if found incompliant in the annual review.

Source: American Wind Energy Association