Arizona’s renewable energy standard and tariff rules were repealed on March 4 by the Arizona Corporation Commission, which said the cost to customers was no longer justifiable after “dramatic” changes to the renewable energy landscape.
The rules were adopted in 2006, and since then, Arizona Public Service, Tucson Electric Power, and UniSource Energy Services “have collected more than $2.3 Billion in REST surcharges from all customer classes to meet these mandates,” the ACC said in a release. “The mandates are no longer needed and the costs are no longer justified.”
The ACC argued that the rules were also raising rates because “utilities are saddled with above-market solar contracts that were entered into to comply with the REST Rules, costs which appear in a utility’s purchased power adjustor. APS customers are paying higher rates because of costly contracts that APS would not have been entered into if not for the REST rules.”
The commission voted unanimously to repeal the rules. Five people spoke in opposition to the repeal at the open meeting, including Cepand Alizadeh, the Arizona Technology Council’s government relations specialist. The ATC’s CEO Steve Zylstra said in a November op-ed that the repeal could “inject uncertainty into Arizona’s energy future, weaken the competitive advantage that clean technology brings and ultimately drive higher costs.”
“Opponents of the REST and EE rules argue Arizona already has ‘met its goals’ and utilities now voluntarily pursue clean energy targets, making the rules unnecessary. Voluntary goals can change overnight, however, and utilities may decide to walk back their clean energy commitments,” wrote Zylstra. “Without a clear, consistent policy framework, there’s no guarantee that private investment in renewables and efficiency will continue at the pace our growing economy demands.”
The commission’s Vice Chair Rachel Walden said that the requirement for utilities to issue an all-source request for proposals before procuring new generation will ensure the success of the lowest-cost, most reliable solutions, “without the government placing their finger on the scale.”
