Utility regulator proposes broad renewable energy plan

Rachel Leingang//February 1, 2018

Utility regulator proposes broad renewable energy plan

Rachel Leingang//February 1, 2018

State utility regulator Andy Tobin discusses Tuesday what actions the Arizona Corporation Commission should take in the wake of the indictment of a former member on charges of trading his vote for approval of more money for a water company.
Andy Tobin (Photo by Howard Fischer/Capitol Media Services)

A conservative utility regulator has a grand plan for clean energy resources for Arizona electric companies, which will likely increase costs for utility customers.

Arizona Corporation Commissioner Andy Tobin released a plan Jan. 30 that calls for increases in clean energy, energy storage and biomass.

His plan would change the current standard for renewable energy benchmarks for utilities, called the Renewable Energy Standard and Tariff, to a “Clean Resource Energy Standard and Tariff” or CREST.

Current goals for renewables, approved by the commission in 2006, require electric utilities to generate 15 percent of the electricity they sell from renewable sources by 2025.

Former Commissioner Doug Little wanted to increase the renewables requirement to 30 percent by 2030 last year, but his plan never took off.

Under Tobin’s plan, the new standards would require 80 percent of the state’s electricity generation to come from clean energy sources by 2050.

Tobin told the Arizona Capitol Times that the clean sources would include things like nuclear power and biomass, which the current standards don’t include, but not coal or natural gas or any other carbon-producing source.

Environmental groups have historically opposed including nuclear energy among clean or renewable sources because of the waste it creates and environmental risks it may pose.

Tobin’s plan also sets an energy storage goal of 3,000 megawatts by 2030.

The plan calls for much more reliance on biomass, a renewable source of fuel, which Tobin tied to forest health. Tobin said Arizona forests have about 50,000 acres per year that need to be thinned, which would help utilities reach the 80 percent requirement for clean energy resources. A potential biomass plant would go out for bids by the end of 2021, the plan says.

Tobin said he’s been working on the plan through several workshops for almost two years, and he wants the plan to be on an open meeting agenda in February.

“I’ve been workshopped to death,” he said.

Although Tobin said none of the plan’s components should be surprising to utilities because they have all been discussed at workshops, it’s unclear if the utilities will be in favor of such a plan, given the big changes it would spell for their energy portfolios.

Arizona Public Service, the state’s largest utility, said Tobin’s proposal is a “bold, challenging vision for Arizona’s energy future.”

The utility said it shares Tobin’s goal of using more clean energy, battery storage and other advanced technologies. APS also said the plan recognizes the “critical role” nuclear power plays in “any serious plan for clean Arizona energy.” APS operates and owns the majority of the Palo Verde Nuclear Generating Station, the state’s only nuclear plant.

Tobin said it’s time for the commission to come up with comprehensive energy policies. He pointed to the Navajo Generating Station’s closure, which could leave customers on the hook for the stranded asset.

“I’m trying to build less things that we’re not going to use,” he said.

Instead, he wants utilities to diversify and build up clean resources instead of relying on the fluctuating prices of coal and natural gas.

Biomass fuel, and the clean energy plan in general, likely will cost more than customers are currently paying for electricity, Tobin said.

But the side benefits of cleaning forests, which could save the lives of firefighters and property of people near wildfires, along with air and water quality improvements, have to be taken into account as well, he said.

“Yeah, this is going to be more expensive. We all know that,” he said, adding that it’s hard to get a solid number on the cost without a plan in motion.