TradeEdge Exchange:A Renewable Energy Battle Is Brewing in Arizona, with Confusion as a Weapon

Voters in Arizona are TradeEdge Exchangein for a messy battle over renewable energy this fall, as climate advocates and Republican lawmakers advance two competing ballot initiatives that are nearly identical. Both propose the same clean energy target using almost the same words, but only one requires that the target actually be met.

Over the past two weeks, the state legislature has made two last-minute attempts to challenge a pending ballot measure supported by environmentalist and billionaire Tom Steyer that would require Arizona utilities to get half their power from renewable sources by 2030.

The lawmakers first set penalties that are so low, they would have little impact on utilities failing to meet the renewable energy target. Then, at the urging of the state’s largest electric utility, they created the copycat ballot proposal—with an added provision that would make it easy for state officials to abandon that 2030 target altogether.

Lurking behind all of this is a wonkier debate playing out at the state’s utility commission, which has long been seen as an ally of the electric power industry it regulates, but that surprised a lot of people this month when it nudged the state’s utilities to adopt more renewable energy.

Taken together, the developments could bring a divisive debate to the fore in Arizona as November approaches. Clean energy advocates are asking for more renewable power, but the state’s utilities are fighting back through their allies in elected office.

“What the legislature is doing right now is to limit the people’s ability to hold these big monopoly utilities accountable,” said Sandy Bahr, director of the Sierra Club’s Arizona chapter. “It’s really a new low in our state’s political climate.”

Arizona is one of the top states for solar power—ranked second for utility-scale solar and third for rooftop—and prices have been dropping fast. Last year, Tucson Electric Power announced it had signed a long-term agreement to purchase power from a solar-plus-storage facility at a price low enough to be competitive with natural gas.

But the sun still provided only 5 percent of Arizona’s power in 2016, with renewables as a whole making up 12 percent. Climate activists and solar companies have been pushing for years to boost that figure, but they have met fierce resistance from utilities. Chief among those is Arizona Public Service (APS), the state’s largest electricity provider, whose parent company, Pinnacle West Capital, has spent millions of dollars to support political candidates, including Gov. Doug Ducey and members of the utility commission.

GOP Lawmakers Offer Utilities a Way Out

This year, clean energy advocates launched a campaign to add a constitutional amendment to the ballot that would boost the state’s renewable portfolio standard to 50 percent by 2030, up from the current 15 percent by 2025. Among the supporters is NextGen America, a climate advocacy group started by Steyer that has offices in several states, including Arizona.

Even though the campaign hasn’t yet submitted the signatures required to get the initiative on the ballot, Republicans in the legislature are already working against it.

Last week, Gov. Ducey signed a bill, supported by APS, that would slash penalties for failing to comply with the renewable energy standard to as low as $100 and no more than $5,000. According to the Arizona Capitol Times, the senate’s legal counsel advised that the bill was unconstitutional, and it’s likely to prompt lawsuits, renewable advocates say.

This week, a senate committee passed a separate bill—which an APS spokeswoman said the utility had proposed—that would add a second ballot initiative with a nearly identical title. The initiative would have similar language and the same goal for renewable energy but would include a “safety valve” that would forbid the Arizona Corporation Commission, which regulates utilities, from implementing the standard if it would increase electricity bills, hurt reliability or have an adverse impact on “the well-being of this state.”

Sen. John Kavanagh, one of the bill’s sponsors, said that he doesn’t support requiring 50 percent renewable energy by 2030, and that he proposed the bill only in response to the activists’ proposed ballot initiative.

“There’s a great deal of concern that a voters’ initiative being funded by an out-of-state wealthy person could impose an unrealistically high renewable energy mandate in Arizona, which would dramatically increase homeowner utility bills,” he told InsideClimate News.

Renewable energy advocates say the legislature’s measure is simply meant to undermine the other proposal.

“The idea is to put two seemingly similar initiatives on the ballot so people get confused and vote no on all of them,” said Amanda Ormond, managing director of the Western Grid Group, a nonprofit that promotes renewable energy.

Pressure from an Unexpected Source

No matter what happens with the ballot initiatives, the utilities may still face pressure from regulators to increase their use of renewable energy.

Earlier this month, the Arizona Corporation Commission voted on a series of measures that, collectively, told the utilities that they’re not moving fast enough on renewables. The most significant was their disapproval of the utilities’ long-term plans, which relied almost entirely on natural gas for future growth.

The vote doesn’t actually require the utilities to do anything differently, however. In fact, APS spokeswoman Jenna Rowell said in a statement that while the company disagreed with the decision, it will not change “how we will meet our customers’ energy needs in the near-term.”

“It’s all perspective,” Ormond said. “Elections come and people come and go, so we’ll have to see how it plays out.”

In 2016, APS spent millions of dollars to support the campaigns of three of the sitting commissioners.

Still, they appear ready to push APS and other utilities. This month, the all-Republican commission also placed a nine-month moratorium on new natural gas plants larger than 150 megawatts. While no such plants had been planned, the move could be an effort to buy some time for the regulators to consider a proposal that could boost the state’s renewable energy standard.

In January, Commissioner Andy Tobin proposed a plan that included an 80 percent “clean energy” target by 2050 and an energy storage procurement target of 3,000 megawatts by 2030. The proposal is still being fleshed out by the commission and lacks key details and definitions. “Clean energy” in the plan would likely include nuclear power, which already provides more than a third of the state’s electricity.

Bahr, of the Sierra Club, is skeptical the plan will push very far.

“The utilities have a lot of sway. APS has had huge influence on the commission in recent years,” she said. Because the utilities are monopolies, she said, the state needs the regulators to hold them accountable. “If the corporation commission won’t do it, then the people will have to do it directly.”