Arizona Corporation Commission Chairman Bob Burns is pushing to update the state’s inadequate and antiquated clean energy standards to reflect the state’s potential to build a cleaner, less expensive, just and homegrown energy mix. Commission staff has promised to have a proposal ready in July for consideration and a vote.
Updating and improving the state’s energy policy for the utilities the ACC regulates could address two looming issues: COVID-19 job losses and the pollution that leads to climate change in Arizona.
While it may seem incongruous that adoption of clean energy policy could impact such systemic and enormous issues, remember that having affordable and reliable electricity is the underpinning of our entire economy.
This summer, our five elected commissioners could do something meaningful and historic. Burns, a Republican, has the support of Commissioner Sandra Kennedy, a Democrat, for a number of clean energy proposals. With just one more vote, the state could adopt bipartisan, forward-looking guidance to secure the state’s electricity future.
Clean energy proposals include reaching 100% carbon-free energy by mid-century, having 50% of our energy mix come from renewable energy resources and expanding requirements for energy efficiency to 35% by 2030, from today’s 22%.
Commissioners have also expressed support for improving utility planning and procurement processes resulting in competition among energy suppliers and lower prices for consumers, as well as expanding use of energy storage and rooftop solar for customers. Importantly, there is only a nascent discussion of how to address equity issues for tribal and coal plant communities that are or will suffer economic loss from coal plant closures.
The move to clean energy is not sudden or unjustified. The commission has been taking input and debating clean standards for three years, with literally thousands of business and customer supporters. Fortunately for us, in that time, the prices of solar, wind and energy storage have continued to plummet.
Clean energy is now less expensive than any new fossil fuel plant and is resulting in accelerated retirement of all the state’s coal plants, which are becoming uneconomic. Conserving energy through energy efficiency improvement continues to be less expensive than building the next power plant.
The commission would not be blazing a new trail by adopting standards, and would in fact merely codify plans voluntarily created by Arizona utilities.
Salt River Project, an unregulated utility, was the first to announce clean energy as its north star in June 2019 with a sustainability platform that includes a commitment to a 62% reduction in carbon by 2035 and 90% by 2050, largely achieved through energy efficiency and building wind and solar with storage.
Arizona Public Service followed with its clean commitment in January 2020, planning for 100% carbon-free electricity by 2050, 45% renewable energy by 2030 and an end to coal power by 2031.
Just last month, Tucson Electric Power proposed a whopping 80% carbon reduction by 2035, 70% renewable energy by 2035 and to have no coal by 2032.
It is noteworthy that the state is on a path, like our neighbors, to completely shut down the coal fleet years — and sometimes decades — sooner than planned. This did not happen overnight; it is the steady, unstoppable worldwide move to a carbon-free electric system. Closing coal will create local and state economic disruption, something the state has yet to grapple with.
All this utility progress begs the question of why are commission standards necessary if electric companies are proposing clean energy? My response comes from my decade working for the Arizona Department of Commerce: long-term policy certainty is the best method to create investment opportunities.
Businesses are incredibly adaptable, but what they hate most is a changing policy environment. Because CEOS and commissioners change, the state setting its own long-term energy targets assure utilities, project developers, investors, energy efficiency providers, technology innovators and other job creators that the state is a secure place to build and grow clean energy businesses. .
Arizona is surrounded by states with 100% clean energy aspirations. These standards were adopted in part because behemoth businesses such as Walmart, Google, Facebook, Microsoft and others are demanding clean energy. Increasingly, they will only locate or expand in states where the amount of clean energy is increasing. For individual customers, clean energy is a way to reduce energy use and bills, create jobs and have cleaner air.
The strange convergence of COVID-19, carbon and clean energy presents Arizona and its corporation commissioners with a historic opportunity: Leave a legacy, secure our future, pass the standards.