A renewables slugfest is just getting started in Arizona

Source: Edward Klump, E&E News reporter • Posted: Thursday, July 12, 2018

Take a billionaire who wants to see renewable energy expand. Add a drive for petition signatures, competing front groups, utility opposition and talk of closing a nuclear power plant. Then throw in the resignation of an important public official.

That’s a recipe for an energy brawl, which is exactly what’s unfolding in Arizona.

Last week, a group called Clean Energy for a Healthy Arizona announced the submission of more than 480,000 signatures in support of a ballot measure. The proposal would require regulated electric utilities to source at least 50 percent of annual power sales from renewable energy by 2030. They could earn and trade credits.

NextGen Climate Action, which is tied to Tom Steyer, is listed in a filing as backing the group financially.

Arizonans for Affordable Electricity opposes the effort, saying the proposal would raise energy costs, kill jobs and likely lead to Palo Verde Generating Station’s exit from the grid. The group argues that a rich Californian — Steyer — shouldn’t be trying to make energy decisions for Arizona. Phoenix-based Pinnacle West Capital Corp., parent of the Arizona Public Service Co. (APS) utility, was listed in a filing as providing funding to this opposition group. APS calls the renewables proposal “irresponsible and bad for customers.”

A vote this November will be important — if it happens — because the outcome promises to shape Arizona’s involvement in wind and solar for years to come. Steyer’s NextGen brand also is supporting a renewable proposal in Nevada and was involved in a clean energy deal with utilities in Michigan (Energywire, May 21). The Arizona debate appears headed for a struggle over whether enough ballot signatures are legitimate, along with a debate of the pros and cons of the plan.

The initiative in Arizona needs close to 226,000 valid signatures to qualify for the ballot. The Arizona secretary of state’s office is expected to make an announcement on the vetting process in the weeks ahead.

All of it could be followed by litigation. Both sides have thrown around accusations of wrongdoing. The drama has played out in the local media for weeks, with complaints about how one side tried to attract signatures and how the other tried to discredit them.

“The fact that they turned in a bunch of boxes doesn’t mean that they actually gathered enough legal signatures to qualify for the ballot,” said Matthew Benson, a spokesman for Arizonans for Affordable Electricity.

Benson has said the initiative’s backers used felons to help get some of the signatures, which would violate Arizona law unless those felons had their civil rights restored. Rodd McLeod, a spokesman for Clean Energy for a Healthy Arizona, countered with a statement that blamed the state’s biggest regulated electric utility for the drama.

“APS’s scare tactics are a pathetic attempt to scare voters and avoid a debate about clean energy,” McLeod said. “We turned [in] more than twice the number of required signatures to make the ballot, which may explain why APS is behaving so desperately right now.”

Seeking a conversation

There’s no shortage of drama in Arizona politics these days. On the utilities front, that includes a corruption trial involving a former member of the Arizona Corporation Commission (ACC) and a conflict of interest that led to a high-profile resignation at the commission.

Ted Vogt recently resigned his post as ACC executive director after it came to light that his wife is employed by a firm that’s working on behalf of Arizonans for Affordable Electricity.

The ACC also is considering a draft clean energy standard for regulated utilities that envisions a requirement that 80 percent of annual retail electric sales comes from clean energy by 2050, including nuclear.

Meanwhile, the 50 percent renewables initiative that may be on the ballot in November is proposed as a constitutional amendment. That could cement its place in state public policy.

The proposal says renewable energy includes options such as solar, wind and small-scale hydropower but not fossil fuels or nuclear energy. It calls for distributed renewable energy such as rooftop solar to account for at least 10 percent of affected utilities’ annual electric retail sales by 2030.

The Salt River Project, one of the largest power-producing water projects in the West, would be excluded from the requirements.

McLeod, spokesman for the proponents, said the sun is part of everyday life in Arizona, with the Phoenix area known as the Valley of the Sun. Not making more use of it for electricity shocks people, he said. The idea is to create a system with electricity at a lower cost and less pollution.

“We’ve tried from the beginning here to have a conversation with Arizona about renewable energy and electricity,” McLeod said in an interview.

Benson with Arizonans for Affordable Electricity said the plan poses a threat to Arizona families and small businesses and wouldn’t improve public health. He also noted a study that came from Arizona State University and discussed possible negative economic implications.

“We are going to be working hard every day for the next several months to make sure people understand what is at stake in this election,” he said.

Jeff Burke, director of resource planning at APS, said the utility is looking to add renewables in a fashion that makes sense, including with battery technology. Burke said bills could double for APS customers by 2030 under the proposed renewables initiative, based on a $15 billion potential cost to comply.

“We need to make sure that we have reliable and affordable electricity,” he said. “That’s important to us, especially living in the desert here.”

Examining the energy mix

Burke said APS has about 1,700 megawatts of renewables on its system, including utility and rooftop installations.

If the 2030 renewables mandate goes into effect, APS said it would need to add about 2,400 MW of utility-scale solar, 800 MW of wind, 1,500 MW of storage, 3,000 MW of rooftop solar and 1,200 MW of natural gas generation. The utility said 2,500 MW of coal and nuclear resources could close by the mid-2020s.

APS suggested that rising solar capacity could threaten the viability of baseload plants that are designed to run much of the time. A big point of concern is Palo Verde, of which APS has a 29 percent stake.

“If that unit shuts down, then we’re going to see emissions rise,” Burke said.

A study promoted by the Natural Resources Defense Council suggested that Palo Verde could stay open under a 50 percent renewables standard.

One reason for APS to not stay neutral on the initiative, the utility said, is that people might associate higher bills with its brand, leaving the company to manage complaints. It also mentioned broader concerns.

“We’re looking out for Arizona’s best interest,” Burke said, adding, “That includes the economy. That includes our customers.”

In a statement in June, Steyer said APS showed it would “stop at nothing to make its millions at the expense of Arizonans’ clean air and water.” He offered enthusiastic support for the Clean Energy for a Healthy Arizona campaign as a way to help “drive clean energy job growth and economic development.”

“When it comes to who gathers citizen signatures, my position is simple: It’s in the country’s interests that people who’ve paid their debt to society and have had their rights restored should rejoin the workforce to become productive citizens,” he said, adding that he was “comfortable with them participating in legal and appropriate signature gathering.”

Tucson Electric Power (TEP), another power provider in Arizona, said it hasn’t actively campaigned against the initiative.

“However, we have some serious concerns that it will drive up customers’ bills by more than $500 every year and more than $3,400 a year for a typical business,” Joseph Barrios, a spokesman for TEP, said in a statement. “It would also require us to rush to add clean energy sources, eliminating jobs and forcing customers to pay for power plants we wouldn’t be using.”

TEP prefers to see energy policies determined by elected utility regulators, Barrios said. The company said it’s pursuing a plan to have 30 percent of its community’s power come from renewable sources by 2030.

Arizona has an existing standard for regulated electric utilities of 15 percent of retail power sales coming from renewables by 2025.

For now, Clean Energy for a Healthy Arizona can enjoy the optics of lots of boxes with signatures even as its opponents question them. It remains to be see how the passions for and against the renewables initiative will translate at the voting booth, if it gets there.

“We can’t trust the public agency entrusted with the responsibility of regulating these monopolies to do the job,” McLeod said, “so the voters are taking it into their own hands.”