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Renewable energy requirements OK'd

By dmc-admin

Published: November 1, 2006 at 1:00 am

The Arizona Corporation Commission yesterday approved rules requiring utilities to generate 15 percent of their energy from renewable sources, such as sunlight and other “green” energy sources.
Chairman Jeff Hatch-Miller and Commissioners Bill Mundell, Kris Mayes and Barry Wong voted to require regulated electric utilities to generate 15 percent of the total megawatts sold from renewable resources by 2025. Commissioner Mike Gleason voted against the rules, citing concerns over the costs of meeting the sharply higher standard, grid reliability and specific changes he sought to make the rules more precise.
Because the substantive changes included in some proposed amendments would have required the rulemaking process to start again, the Commissioners stopped short of passing several possible changes.
Several minor, more technical amendments were approved. The amendments related to implementation plans, reporting requirements and compliance steps.
For 2006, utilities must generate 1.25 percent of retail energy sold from renewable resources.
The Commission’s Renewable Energy Standards allow utilities to use solar, wind, biomass, biogas, geothermal and other similar technologies to generate “clean” energy to power Arizona’s future. The rules package outlines what technologies qualify and allow for new and emerging technologies to be added as they become feasible.
The new requirements were hailed by the Arizona Public Interest Research Group as a historic step toward reducing pollution and dependence on fossil fuels. Diane Brown, the organization’s executive director, said there were other benefits, as well.
“More renewable energy in Arizona means more jobs and less pollution,” she said. “The state’s economy and the public’s health will benefit from increased renewable energy.”
To help offset the increased cost of meeting the more aggressive standard, the current Environmental Portfolio Surcharge paid by consumers will change. Each utility will have to file a request to recover the cost of installing and operating its renewable resources. The total amount of each utility’s proposed surcharge is unknown until the utilities submit a proposal to the Commission. Each utility is also required to file an annual plan outlining the steps it is taking to meet the new standard.
The proposed “sample tariff” associated with the Renewable Energy Standards would increase the residential surcharge from a cap of $0.35 to $1.05.
The Renewable Energy Standards were formerly known at the Environmental Portfolio Standard, which required only1.1 percent of energy be produced from renewable sources by 2007. In February 2004, the Commission voted to review the rules and consider adopting a more aggressive standard.
The Commission convened a series of intensive workshops involving proponents of various technologies, environmental advocacy groups and the utilities. The Renewable Energy Standards rules package is the result of this collaborative process.
Before taking effect, the rules must be reviewed by the Attorney General’s Office.

ARIZONA LEGISLATIVE REPORT

Renewable energy requirements OK'd

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