Associated Press
Posted: 11/1/06 9:54am
Arizona utility regulators on Tuesday approved new rules to ramp up the state's requirements for electricity providers to use power from solar, wind and other renewable sources.
The rules approved 4-1 by the all-Republican commission generally require that state-regulated utilities get 15 percent of their electricity from renewable sources by 2025, with annual increases from the current mandate of roughly 1 percent.
Consideration of the binding regulations culminated approximately three years of workshops and several preliminary votes on the issue.
Commission votes in 2005 and early 2006 set the panel's course toward a more aggressive standard, but elements remained controversial through Tuesday's hearing.
"I believe the choice is clear -- a clean environment, economic development, higher-paying jobs and less dependence on fossil fuels from volatile foreign governments," said Commissioner Bill Mundell, a longtime champion of the toughened mandate.
Commissioner Kris Mayes said the rules would help spur development of the state's solar industry and provide jobs in rural parts of the state.
"Move over California," Mayes said. "With these rules, we are making Arizona the solar energy capital of the world once again."
The commission vote ended a daylong meeting that saw the panel vote to give utilities additional leeway on obtaining waivers on compliance with the rules but rejected an amendment to pause the ramp-up in 2011 if the program doesn't meet an unspecified cost-benefit threshold.
The commission also rejected other proposed changes with the potential to narrow eligibility of some renewable energy projects, including so-called "distributed generation" -- small-scale installations such as residential solar panels or businesses' rooftop arrays.
The standard included a requirement that utilities included distributed generation in their total portfolio of renewable energy.
The rules also allow utilities to use surcharges to recover costs of the program but caps monthly surcharges at $1.05 for residential customers and $39 for most other customers. For larger users such as mines and manufacturers, the cap would be $117.
Lower caps for each category are in place now.
Along with solar photovoltaic and wind technology, the renewable sources covered by the rules include biomass, geothermal and certain types of hydro projects.
The sole dissenting vote was cast by Commissioner Mike Gleason, who said the rules would pose costly burdens for both utilities and their customers because of artificially increased demand for uneconomical and unreliable power sources.
"This is a tax which the ratepayers will bear," Gleason said. "This package is going to be expensive -- very, very expensive."
Chairman Jeff Hatch-Miller said the commission can always consider change the reviews and that annual reports required from utilities on their actual costs and steps taken to meet the mandates will provided needed information.
"These filings are where the rubber meets the road," he said.
Commissioner Barry Wong, a former legislator appointed to fill a monthslong vacancy on the commission, said he questioned whether the increased governmental mandate was necessary but concluded it was.
"The marketplace has not reacted to the risks and potential risks out there," Wong said.
The new rules require certification from the attorney general before taking effect.
Gov. Janet Napolitano in September signed an executive order setting goals for the state to reduce emissions of carbon dioxide and other greenhouse gases, creating a new panel of top state officials to recommend ways to meet the goals and directing state agencies to take some steps now.
Also in September, California Gov. Arnold Schwarzenegger signed legislation to require investor-owned utilities to acquire at least 20 percent of their power from renewable sources by 2010, up from 2017 previously.
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