Arizona regulators reject their clean energy rules at last second


In a surprising outcome, the Arizona Corporation Commission’s (ACC) rejected its 100 percent clean energy rules package in 3-2 vote. That outcome is a vote against adopting rules to guide the state’s energy transition comes after more than three years of bipartisan cooperation and extensive engagement with utilities, businesses, consumer advocates, and other Arizona stakeholders.

The wide-ranging reforms contained in the proposed rules—including a timeline for the 100% carbon-free electricity goals, integrated resource planning reforms, utility accountability, new demand-side resources standards, and more—would have spelled major savings for Arizona ratepayers. A previous analysis commissioned by the ACC even found that transitioning the state to clean, advanced energy options is both “reliable and cost-effective” in the near-term.

“Strong, predictable clean energy standards are crucial for helping Arizona attract new businesses and build a booming job market for years to come. Abandoning this rules package takes Arizona’s economic and advanced energy growth drastically off course,” said Shelby Stults, Arizona policy lead at Advanced Energy Economy (AEE). “The ACC’s decision creates uncertainty for businesses looking to set up shop in the state and will likely drive up the cost of electricity.”

In an unexpected turn, Commissioner O’Connor did not vote for the rules package after working closely with Commissioner Tovar last May to revive the package, AEE reports. The vote will likely see pieces of the rules carved out in other proceedings, says AEE, such as a docket addressing reforms to the integrated resource planning process, which was also discussed in today’s meeting.

“Arizonans are already beginning to see the benefits of advanced energy employment, but the industry risks stagnating without leadership from state regulators. The comprehensive energy rules package would have allowed for broad reforms that invigorate Arizona businesses, attract new investment to the state, and ensure a clean, reliable future for all Arizonans,” continued Stults. “AEE encourages the ACC to consider new energy dockets that maximize the benefits advanced energy can offer Arizona.”

The Southwest Energy Efficiency Project (SWEEP) and Arizona PIRG Education Fund also denounced the outcome, pointing to the Energy Rules that would have ramped up energy-saving measures and saved Arizonans billions of dollars on their utility bills.

“The Commission failed to advance key consumer protections to eliminate energy waste and make everyone’s bills more affordable. After years of hard work and careful study, billions in potential cost savings and thousands of local jobs are now in jeopardy,” stated Ellen Zuckerman, utility program co-director of SWEEP. “We urge the Commission to immediately revisit today’s decision.”

The Rules were developed through an extensive, years-long stakeholder process that reflected the input of thousands of supportive Arizonans. They were championed by a diverse coalition of stakeholders, including consumer and environmental advocates, fortune 500 companies, faith-based leaders, as well as Arizona Public Service Company (APS) and Tucson Electric Power (TEP).

The Rules included a 10-year extension of the State’s Energy Efficiency Standard that would have expanded energy-saving programs for APS and TEP customers. These programs offer rebates and services to help Arizonans replace old air conditioners, swap out inefficient water heaters, upgrade lighting, and otherwise cut energy waste. Over the last decade, these initiatives have saved ratepayers more than $1.4 billion, avoided the need to construct 14 gas combustion turbines, saved more than 15 billion gallons of water, and enabled more than 40,000 jobs statewide.

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