Arizona regulators voted to begin the process to repeal renewable energy requirements for most of the state’s electric utilities.
The all-Republican Corporation Commission voted 5-0 to direct staff to take the first steps to repeal the Renewable Energy Standard and Tariff, or REST, rules, first adopted by the commission nearly two decades ago.
The rules require many utility companies to obtain at least 15% of their electricity from renewable sources, with 30% of that coming from sources like residential rooftop solar panels.
Commissioners argued the rules were no longer needed.
“I don't think that there's going to be any impact, or at least minimal impact, on the solar or wind or any kind of renewable industry,” Commissioner Nick Myers said. “They are self-sufficient enough as it is.”
Renewable energy and environmental advocates agreed that the rules have been effective in increasing the amount of renewable energy used by Arizona’s utilities to provide power to the state
“The outcome of that policy, in two decades, renewable energy and renewable energy with storage, now provides greater reliability, lower costs, stable costs, and lower water use than fossil fuels,” said former Arizona Energy Office director Amanda Ormond, a clean energy consultant.
But they disagreed that the rules are no longer needed.
Autumn Johnson with the Arizona Solar Energy Industries Association acknowledged that Arizona’s major utilities exceed the 15% renewable requirement included in the rule.
However, she argued that could change as energy demands grow and utilities continue to invest in non-renewable sources to meet it, including a $5.3 billion gas pipeline from Texas.
“There is absolutely no certainty that the utilities will remain at 15%,” she said, pointing to APS’ recent decision to get rid of its own zero-carbon goals.
And critics argued that the rules are needed now more than ever to protect ratepayers from price volatility, pointing to data showing renewable energy can be more cost-effective than its fossil fuel counterparts.
Financial services firm Lazard recently found that wind and solar “remain the most cost-effective forms of new-build energy generation on an unsubsidized basis.”
However, the five Republican commissioners were in lock step prior to the vote, arguing it was the market, not regulators, that should determine where utilities purchase their energy.
“I've heard firsthand from ratepayers across the state that the importance of reliable energy at the most affordable rates is where they want us to focus,” Commissioner Lea Márquez Peterson said. “That's why I support an all-of-the-above approach to our energy generation and the continued use of all source RFPs.”
The commissioners argued that all-source RFP process, which calls on utilities to prioritize cost and reliability when sourcing new electric generation, ensures utilities are picking the best options for ratepayers, whether that’s solar, gas or another technology.
And Commissioner Rachel Walden said that, if solar and other renewable energy options are as affordable as their supporters say, utilities will continue to purchase them.
“Certainly renewables will continue to be an option, and in a competitive marketplace, will have a role to play,” she said.
Democratic Arizona Attorney General Kris Mayes, who voted in favor of the REST rules as a Republican member of the Corporation Commission in 2006, also claimed the current commission isn’t going through the correct process to repeal the rules, which could violate the law.
A spokesman for the attorney general declined to say whether Mayes plans to file suit against the commission.
“We are evaluating all legal options,” spokesman Richie Taylor said.
The vote on Thursday won’t immediately repeal the REST Rules. The change must clear several other steps, including opportunities for public comment, before a final vote that could occur sometime next year, according to a Commission spokesperson.
