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It’s time to review utility siting committee

In 1971, the Arizona Legislature created the Arizona Power Plant and Transmission Line Siting Committee and charged it with holding hearings and making recommendations to the Arizona Corporation Commission regarding construction of new major electric facilities in the state. Under A.R.S. § 40-360, the purpose was to “provide a single forum for the expeditious resolution of all matters concerning the location of electric generating plants and transmission lines in a single proceeding to which access will be open to interested and affected individuals, groups, county and municipal governments and other public bodies to enable them to participate in these decisions.”

Meghan Grabel

Much has changed in Arizona’s energy landscape since 1971, raising questions about whether the siting statutes should similarly evolve.  These include:

Should all types of generation projects be subject to siting committee oversight?  

The siting statutes govern only the construction of large thermal electric, nuclear or hydroelectric generation.  The committee does not have the jurisdiction to site non-thermal electric generation resources such as solar, wind, and energy storage. In those instances, the committee typically only sites the short transmission lines that interconnect the project to the electric grid. These lines are often inconsequential compared to the overall footprint of the project. Due to increased development of renewable resources, should these projects also be subject to committee scrutiny?

Does eminent domain authority apply to merchant transmission developers?  

Eli Ancharski

Eminent domain refers to government authority to take privately owned property under certain circumstances.  The Arizona Constitution authorizes the taking only if it is for a public use, is necessary to such use, and the property owner is paid just compensation. In several instances, other entities may act as agents of the government. For example, public service corporations, including Corporation Commission-regulated utilities, may condemn property for a use designated in A.R.S. Title 12. An unsettled question is whether a merchant transmission developer qualifies as a public service corporation for the purposes of eminent domain and could leverage this authority to obtain land rights needed for projects that have been authorized for construction by the committee and ACC. Recently, the attorney general issued an opinion regarding the potential for Arizona’s public works eminent domain statutes to apply to a private developer’s energy project.

What role does the siting process play in resolving commercial disputes between energy providers?  

The electricity market in Arizona is just that – a market in which transmission and generation providers develop resources to sell energy to off takers (typically utilities). The surge of generation projects, and need for new transmission, has resulted in constraints and congestion in areas near critical transmission infrastructure. As a result, developers owning large amounts of land or otherwise exercising site control may effectively “block” the progress of other projects by refusing to negotiate easements or requiring significant monetary payments to access needed rights of way. Entities proposing to develop energy resources increasingly are becoming involved in the siting committee proceedings for “competing” projects to preserve their ability to develop in certain areas.

Should environmental justice play an explicit factor in the siting process?  

Environmental justice is becoming an increasingly significant consideration throughout Arizona decision-making. In a recent matter involving the expansion of a power plant near the economically depressed town of Randolph, (founded a century ago by African American migrant farmworkers), environmental justice was at the forefront of the conversation. Unlike similar laws in other jurisdictions, Arizona’s siting statutes do not explicitly require the committee to consider environmental justice when deciding whether to authorize a project (although they do require consideration of “the total environment of the area” and the catch-all “additional factors that require consideration under applicable federal and state laws pertaining to any such site”).  It’s been 50 years since the siting committee was formed, and, like everything else, the energy world has changed. It’s time to examine where we are and where we want to be.

Meghan Grabel and Elias Ancharski are with Osborn Maledon, P.A., energy, water and utility law practice.

 

 

 

 

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