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Ducey signs legislation to protect utilities from proposed renewable energy requirements

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Ignoring last-minute requests for a veto, Gov. Doug Ducey signed legislation Friday to protect utilities from having to generate more of the power sold to their Arizona customers from renewable sources.

The move comes despite a letter from various groups with environmental interests that Ducey recognize there is a need for the state to require more of utilities here. At this point, the only mandate they face is the one approved by the Arizona Corporation Commission to have 15 percent of power from wind, solar, geothermal and other similar sources by 2025.

“Arizona has a unique natural resource as America’s sunniest state, but we still get less than 6 percent of our energy from solar power,” said the group including the Sierra Club, Progress Arizona Now and Physicians for Social Responsibility.

The initiative being promoted by NextGen America would boost the requirement to 50 percent by 2030. And it would specifically preclude utilities from counting nuclear power as “renewable.”

“If Arizonans want to take control of their energy future and the quality of the air and water we leave our children and grandchildren, we should be trusted to do so,” the environmental groups wrote.

But it took Ducey less than 24 hours to side with the Republicans who control both the House and Senate to approve the legislation that had been crafted by Arizona Public Service Co., the state’s largest electric utility, and was backed by Tucson Electric Power Co., UniSource Energy Services and the Grand Canyon State Electrical Coop Association.

The new law also has the backing of Salt River Project which provides power to much of the Phoenix area, even though the measure would not apply to that utility.

Strictly speaking, what Ducey signed Friday would not overrule the proposed constitutional amendment which directs the commission to enact the rules with the new energy mandate.

But the law, that takes effect later this year — before the initiative can even get on the ballot — spells out that the “exclusive remedy” for violating any constitutional provision dealing with how electricity must be generated is a fine that could be as much as $5,000 or as little as $100.

Friday’s action is unlikely the last word, with a court challenge virtually certain.

In fact, the Senate’s own legal counsel told lawmakers that what they were doing is unconstitutional. That, however, did not stop them from approving the plan.

During legislative debate, Sierra Club lobbyist Sandy Bahr told lawmakers it’s clear why the utilities want this measure: They’re looking for an escape clause if voters approve the measure.

“Everyone knows that if the cost of noncompliance is cheaper than the cost of compliance, entities will serve their shareholders, not consumers, and take the low road and pay the fines,” she said.

Sen. Juan Mendez, D-Tempe, asked APS lobbyist Rod Ross outright whether it was the intent of the utility to ignore the mandate if it is enacted by voters and simply pay the fine.

Ross did not deny that might happen. He said if APS were mandated to boost its renewable energy it would consult with lawmakers, regulators and others “and together come to a decision as to what the best course of action is to protect the state, its economy and its ratepayers.”

But he told lawmakers that APS, which already has helped form a committee to fight the initiative, is not doing it out of self-interest.

“We feel like it’s important to protect the people of this state from an out-of-state initiative funded by a California billionaire that is attempting to raise our state’s and our residents’ energy prices, which is exactly what this initiative will do,” he said.

It was precisely that sentiment that gubernatorial press aide Daniel Scarpinato used on Friday to justify signing the measure into law.

“Gov. Ducey’s goal is to protect Arizonans from skyrocketing electric bills,” Scarpinato said. He said the governor does support increased use of alternate energy sources — but only “in a way that is manageable and doesn’t hurt middle-class families.”

GOP lawmakers made similar arguments on Thursday.


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