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Lesko pulls solar-industry regulation bill

A bill that critics said would threaten the future of Arizona’s fledgling solar-energy industry has died after its sponsor announced Feb. 25 that she was withdrawing it.

The measure sponsored by Glendale Republican Rep. Debbie Lesko would have gutted the renewable energy standards adopted by the Arizona Corporation Commission, prompting cries from solar companies that they wouldn’t be profitable. One company threatened this week to abandon plans for a factory in the Phoenix suburb of Goodyear if the bill passed.

House spokesman Paul Boyer told The Associated Press that Lesko would withdraw her bill. Lesko did not immediately respond to a call or e-mail.

The Corporation Commission, which regulates most electric utilities in Arizona, now requires them to produce 15 percent of their energy from renewable sources by 2025. But Lesko’s bill would have taken from the Corporation Commission the authority to set such standards.

“This would simply be the death knell for solar energy in the state of Arizona,” commission chair Kris Mayes said Feb. 24.

Lesko’s bill passed the House Government Committee on a 5-2 vote this week. It would have technically maintained the requirement for 15-percent renewable energy by 2025 but it would have classified nuclear and hydropower as renewable energy sources and allowed power companies to ignore the rule if complying would raise costs for customers.

Arizona Public Service, the state’s largest electric utility with more than 1 million customers, already gets 27 percent of its power from a nuclear plant and would exceed the standards without adding any solar, wind or other renewable sources.

Mayes said it would take decades of state growth before APS would dip below the 15-percent threshold and be required to add renewable sources.

That has worried solar-energy companies that are being aggressively courted by state officials, who hope Arizona’s abundant sunshine will make solar energy an economic engine.

Suntech Power Holdings, a Chinese manufacturer of solar panels, announced with great fanfare in January that it would build its first U.S. factory in Goodyear.

But the company’s lobbyist told lawmakers in a public hearing this week that it might have to abandon its plans for a solar plant if Lesko’s bill became law. Officials say the plant will employ 70 workers when it opens in September.

The backlash put House Speaker Kirk Adams on the defensive. He released a statement late Feb. 25 affirming that the House supports renewable energy.

“As a high-growth state, Arizona must have an energy plan to match our energy demand, now and in the future,” Adams said. “Renewable energy, and solar in particular, must play a vital role.”

Lesko had argued that energy policymaking should be the Legislature’s responsibility and the elected corporation commissioners should only be allowed to set utility rates.

Renewable energy costs more to produce than electricity generated by coal-fired power plants. Lesko had argued that the Corporation Commission’s directive forces utilities to buy more expensive power and allows it to pass part of the cost to customers who might not be able to afford it.

APS is currently allowed to charge residential customers up to $3.46 per month for renewable energy, said Martin Shultz, the company’s lobbyist. Utility companies including APS and Tucson Electric Power opposed Lesko’s bill, saying they don’t want duel regulation by the Legislature and the Corporation Commission.

Suntech was one of the first companies eligible for Arizona’s new Renewable Energy Tax Incentive program, which provides refundable tax credits and property tax reductions for manufacturers.

SolarCity, a company that helps design, finance and install solar systems, said it plans to double its Arizona workforce of about 50 people in the next year now that Lesko has pulled her pull.

“This decision will undoubtedly save jobs and ensure Arizona remains a fertile ground for renewable businesses,” the company said in a statement.

Gov. Jan Brewer has touted solar energy, and her office lauded Lesko’s decision to withdraw the bill.

“This sends a clear and united message to employers around the world: Arizona remains the premiere destination for solar industries,” Brewer said in a statement.

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