Arizona Corporation Commission staff recently filed to the commission a
final report addressing possible changes in how the state procures power.
There are a "number of things that we would like to look at and possibly
change," said ACC Commissioner Jeff Hatch-Miller in an interview earlier this
week at the National Association of Regulatory Utility Commissioners' annual
meeting in Anaheim, California. "The idea behind what we've done was to
test the waters, if you will."
Among other things, Arizona is "wondering if we don't need to be leaner
and faster on certain types of procurements, especially [of] smaller amounts
of power," Hatch-Miller said.
Referring to the state's procurement process, he said that "we want to
make sure we continue to refine it and do better. Better in terms of cost,
better in terms of reliability, better in terms of fairness to everybody that
wants to participate. Those things that we know there's room for improvement."
Hatch-Miller and Ernest Johnson, director of the utilities division at
the ACC, both participated in a collaborative meeting at the convention
between NARUC and the US Federal Energy Regulatory Commission related to power
procurement.
Johnson noted that the ACC directed commission staff to develop a
procurement process "which would be flexible, which would be timely and which
would be fair."
As a result, ACC staff undertook a series of workshops that began in
April. "We issued a draft report in October of this year. Comments were
received to that report and we just recently filed" a final report to the
commission, he said. The final report was filed last week.
While Hatch-Miller said he wasn't sure whether renewable energy is
addressed in the final report, but "it is something that's on the agenda." The
state regulator said that "we know that as we go out in the marketplace, a lot
of the renewables are produced by merchant power providers." He added, "We
want to make sure that our system for securing those renewables is fair and
transparent and leads to good results."
The ACC commissioner said that "there have been some concerns that
Arizona applicants that submitted proposals haven't been selected for a
variety of factors, usually on the terms of cost."
Some ACC commissioners "want to talk about that aspect. Should there be
some way to get more Arizona participation because we do in Arizona want to
build up our providers regionally and also statewide, especially for solar,
and to some degree for wind."
Hatch-Miller noted that "right now, we're getting geothermal from the
Salton Sea, we're getting wind from New Mexico. We're not getting a lot of the
resources locally, and we want to make sure that there are Arizona-based
resources as well."
The ACC now will review the staff report. In terms of timing on possible
further action by the state commission, Hatch-Miller said "it will be the
first half of next year."
As for the procedure that the ACC expects to follow in response to the
report, the commissioner said "it will certainly impact individual cases as we
go forward. We have to decide whether we want to go back into a rulemaking
process, or do we do additional workshops at this point. We have to decide how
we're going to go forward."
--Paul Ciampoli, paul_ciampoli@platts.com