The proposed energy rules would strengthen the state’s competitive advantage

Solar panels and wind turbine against blue sky

On Wednesday, the Arizona Corporation Commission is due to vote on a package of updated clean energy rules that has been going on for years. The package now under consideration, which benefits from several recent changes, is the result of an extensive and bipartisan stakeholder process with significant support from individuals and small businesses across Arizona. Most importantly, these rules enable Arizona to stay competitive with other states by providing the kind of robust clean energy commitment that companies demand before adding jobs and significant investment to a state while also providing critical safeguards to make sure the public doesn’t pay more for clean energy.

Doran Arik Miller

The current standard, which was set back in 2006 by the Arizona Corporation Commission, only requires that regulated electric utilities in Arizona generate 15% of their energy from renewable sources by 2025 states. Falling behind this metric has real world ramifications that make Arizona less competitive than other states in attracting critical investments and jobs. The market increasingly demands that a state offer access to robust, clean energy options, or it is removed from the list of economic development projects and fails in the fierce competition for the companies of the future. Because of this, large companies like Apple, Oracle, Microsoft, PayPal, and others are supporting updated clean energy standards.

The current package will give Arizona an edge in the competition for economic development opportunities by repositioning Arizona as a national leader with a 100% clean energy goal by 2070, the zero carbon requirement through the use of renewable energy, nuclear power and energy efficiency measures, and not a technology-based requirement that would have required a certain amount of renewable energy from the utilities to achieve the goal. By setting a standard of 100% CO2-free by 2070, the rule package will be gives the industry more time and flexibility to structure its energy portfolios in a cost-effective and externalized manner.

It is important that the new energy regulations position Arizona for success in the ongoing competition for economic development while also incorporating safeguards to protect the public. The most important of these safeguards is a waiver, which enables the Commission to excuse compliance with energy rules if the Commission determines that there is an important reason and that it is not causing harm to the public. In practice this means that if the Commission finds that compliance is too expensive or otherwise harmful, a derogation can be granted.

In addition to the exemption, the amendments added by Commissioner James O’Connor provide an additional guarantee to ensure that the Commission is fully aware of the cost of compliance. This provision requires utilities to analyze the relative cost of installing clean energy resources in accordance with the regulations compared to an alternative “cheapest” portfolio developed without regard to the regulations and to provide information to the Commission. If the Commission finds that the costs do not favor the portfolio of clean energy resources, the Commission can make use of the waiver. While clean energy is currently the cheapest energy option, this provision enables the Commission to ensure that fee payers are protected from unreasonably high costs when necessary.

The proposed rule package also includes critical updates to the Integrated Resource Plan and sales contract processes – including competitive tenders, RFP processes for all sources, and precautionary reviews – that bring more transparency and competition to the overall process. These modernization changes will greatly benefit tariff payers by anchoring transparency, competition and market forces into the resource planning process. These are important protections for toll payers and will result in a more efficient and effective power system for the state of Arizona.

Perhaps most importantly, the package provides the long-term market security needed to help utility companies increase clean and renewable generation in Arizona and meet their own renewable energy goals, drive technology and innovation in the energy sector, and reduce costs Consumer. They also offer a guarantee that Arizona will be able to meet the clean energy needs of investors and businesses looking to locate in Arizona, fueling critical rural economic development efforts, and reflecting what the people of Arizona do expect from our state’s energy regulators.

The Arizona Corporation Commission now has a crucial opportunity to accelerate the innovation and adoption of clean energy even further at a time when it is particularly important to the Arizona economy. The fact is, modern businesses are not considering investing in states that do not have access to clean enough energy options. If adopted, these rules will strengthen Arizona’s competitive advantage over its neighbors, keep energy costs low and predictable, and provide the long-term regulatory and market security that businesses and utilities need. Arizona’s Corporation Commissioners should be confident that they will be voting for their approval.

Doran Arik Miller is the director of Arizona The western way, a not-for-profit organization that provides support for sensible market-oriented solutions to environmental challenges that support the economy and improve the environment.

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