Governors' Wind Energy Coalition

A contentious renewable energy initiative is poised to appear on Arizona ballots this November after a state Supreme Court decision yesterday.

The proposed constitutional amendment would require regulated electric utilities to source at least 50 percent of annual power sales from renewable energy by 2030. The measure is aimed at nongovernmental electric utilities and envisions renewable energy credits. It wouldn’t apply to the Salt River Project, a major power and water company.

Arizona Supreme Court Chief Justice Scott Bales issued an order yesterday denying an appeal and affirming a trial court judgment, meaning the measure can go on the general election ballot. That followed Maricopa County Superior Court Judge Daniel Kiley’s recent denial of an application for a preliminary and permanent injunction.

Funding has poured into efforts for and against the proposal known as Proposition 127. Clean Energy for a Healthy Arizona has received millions of dollars from NextGen Climate Action, which is tied to Tom Steyer, the billionaire often associated with climate causes. Arizonans for Affordable Electricity, which opposes the measure, has seen millions of dollars from Pinnacle West Capital Corp., the parent of Arizona Public Service Co. (APS).

In a Twitter post yesterday, Clean Energy for a Healthy Arizona welcomed the decision to turn back what it deemed a “ridiculous lawsuit” against the proposal. A written opinion from the state Supreme Court is expected later.

“This ruling is the final nail in the coffin of APS’s failed strategy to deny Arizonans a choice on clean renewable energy,” Clean Energy for a Healthy Arizona said via Twitter.

Litigation from various plaintiffs took aim at several aspects of the ballot proposal, from the title and text to an allegation of a signature quota for petition circulators to a suggestion that Clean Energy for a Healthy Arizona didn’t properly register as a political committee before an initiative petition application was submitted. It also argued the effort didn’t attract enough valid signatures (Energywire, July 20).

Arizonans for Affordable Electricity vowed to continue working against the proposal despite recent court decisions.

“We disagree strongly with today’s decision and that of the trial court, but knew from the start that the process of challenging signature petitions would be an uphill fight,” Matthew Benson, a spokesman for Arizonans for Affordable Electricity, said in a statement yesterday. “Our focus now shifts to ensuring every Arizona family, senior, small-business owner and ratepayer knows Prop 127 will increase their electricity bills.”

Benson said “everyone supports clean energy,” but he expressed confidence that Arizonans will vote against the proposition once they know the facts.

APS has said that a nuclear power plant in which it has a stake — the Palo Verde Generating Station — could close if the ballot proposal passes. The utility also said it opposes the initiative backed by Steyer because it would raise power bills dramatically, kill thousands of jobs, eliminate millions of dollars in tax revenue, possibly boost Arizona carbon emissions and make the state less attractive as a place to do business.

But Rodd McLeod, a spokesman for the pro-initiative group, has noted in the past the prominence of the sun in everyday life in Arizona and said the idea is to create a system with electricity at a lower cost and less pollution. Steyer said in a statement this year that he was supporting the petition campaign in Arizona to help drive clean energy job growth and economic development.

Steyer’s NextGen brand also has been supportive of a renewable proposal in Nevada and was involved in a clean energy deal with utilities in Michigan. Arizona has an existing standard for regulated electric utilities to source 15 percent of retail power sales from renewables by 2025.

The current Arizona ballot proposal seeks a renewable standard tied to at least 50 percent by 2030. It sees renewable energy as including options such as solar, wind and certain hydropower but not fossil fuels or nuclear energy. It calls for distributed renewable energy to account for at least 10 percent of affected utilities’ annual electric retail sales by 2030.

Evercore ISI discussed possible implications for Pinnacle West in a recent report. The firm said ratings agencies might reassess the company’s credit quality if voters were to approve the renewable energy measure. Evercore’s report also said passage of the initiative would be a bad economic decision for the state.

“If it passes — even though we believe [Pinnacle West] would ultimately have to be made whole for its past investments and might even benefit from having to invest in new infrastructure to meet the standard — it would create an uncertainty overhang on the company,” Evercore said, “that would likely cause the stock to trade back down toward the discount at which it traded in years past when the [Arizona] regulatory environment was considered high risk and unstable.”

But Clean Energy for a Healthy Arizona’s website lists a number of endorsers, including the Arizona Asthma Coalition and the Grand Canyon Chapter of the Sierra Club.

“Our coalition is growing!” Clean Energy for a Healthy Arizona tweeted this week.