A pair of bills designed to upend the Arizona Corporation Commission’s requirement on renewable energy could force a court battle over whether the Legislature has the power to tinker with the commission’s decisions.
A Superior Court judge already has ruled that the Corporation Commission has the authority to require utilities to get part of the energy from renewable sources. But the ruling left open the question of whether the Legislature has the power to countermand that policy, and two bills in the works might force the courts to settle the issue.
Reps. Carl Seel and Debbie Lesko plan to introduce bills for the 2010 legislative session that would alter the Corporation Commission’s 2006 order that private utility companies in Arizona get 15 percent of their energy from renewable sources by 2025.
Lesko’s bill would change the Renewable Energy Standard and Tariffs (REST) rules to include nuclear power, among other sources, as renewable energy.
Seel’s bill would abolish the standard altogether, though it would require all utilities in Arizona to offer renewable energy to customers who are willing to pay market prices for it.
The bills have yet to be introduced, and it is hard to gauge what kind of support they might get. But even if they pass, the courts probably will have to decide whether the Legislature has the power to overturn the Corporation Commission’s rulings.
Seel, a Phoenix Republican, said there would be no reason for a court challenge.
“It’s absolutely not questionable,” he said. “In the absence of we the Legislature speaking, they can continue to operate the way that they are. So when we speak … it will be abundantly clear that the Corporation Commission does not have the authority to make policy decisions in that area.”
Last year, the Goldwater Institute filed a lawsuit arguing that the Corporation Commission overstepped its bounds when it established the 15 percent standard. In September, however, Maricopa County Superior Court Judge Joseph Heilman ruled against the institute, saying that the renewable-energy standard is an extension of the commission’s authority to establish rates and regulate utilities.
The Goldwater Institute is appealing the decision. Clint Bolick, the director of the institute’s Center for Constitutional Litigation, said he agrees with Seel’s assessment that the Legislature has the authority to overturn the Corporation Commission’s renewable-energy standard, and he points to a portion of Heilman’s ruling to make his case.
Heilman wrote: “The court recognizes that there still remains the unanswered question of whether the Legislature has exclusive or concurrent power with the commission as it relates to matters outside ratemaking. … Because the court finds that the dissemination of the REST rules falls within the commission’s ratemaking authority, the court refrains from attempting to resolve this ongoing ambiguity.”
Passage of either bill, Bolick said, could lead to a rematch in court.
He said he hopes the commission will back down if the Legislature passes either of the bills.
Lesko said her understanding is that her bill would be binding. The bill would also assert the Legislature’s exclusive authority to set renewable-energy policy in the future.
“There was a window in what the judge said, from what I’ve been told, that basically implied that the Legislature could set policy over renewable energy,” said Lesko, a Glendale Republican.
Commission Chairwoman Kris Mayes, however, said the commission is determined to stand its ground.
“I don’t think it’s enforceable. They would certainly have to take us to court to try to do it,” said Mayes, a Republican.
Arizona State University professor Paul Bender, an expert on the Arizona Constitution, said it’s difficult to predict how the court would rule in such a case.
“My view would be that the commission should prevail there because it has the exclusive ratemaking power,” Bender said. “But that has not been authoritatively decided by the courts. Cases sort of go both ways, so it makes it very hard to predict.”
Lesko’s bill, as she described it, may only affect one utility. Only two, Arizona Public Service and the Salt River Project, receive power from the Palo Verde Nuclear Power Plant, and SRP is not regulated by the commission. If nuclear were redefined as renewable energy, APS could meet its 15 percent requirement with nuclear alone.
Sandy Bahr, a lobbyist for the Sierra Club’s Arizona chapter, adamantly opposes defining nuclear power as renewable energy. Bahr said it comes with a host of environmental problems.
Bahr said abolishing the 15 percent standard would have economic impacts because many solar companies have set up shop in Arizona. Many politicians and business leaders say they want Arizona to become the Persian Gulf of solar energy, and a raft of recent state and federal incentives have made the state a more desirable location for companies that install solar panels.
Considering the miserable state of Arizona’s economy, Bahr said, lawmakers should be wary of undercutting one of the few industries that is thriving.
“Hopefully, enough legislators will see how ridiculous both of these bills are and reject them,” she said.
Mayes said she doubts the bills will get much traction in the Legislature.
“There are other states that are competing for this business, and legislation like this is not business-friendly,” Mayes said. “It would be viewed very negatively by the very renewable-energy companies we’re trying to lure to our state to create jobs and to make this an economy based on sustainability.”