The Arizona Corporation Commission’s Landmark Proposed Energy Modernization Plan

On January 30, 2018, Commissioner Andy Tobin submitted an expansive Proposed Energy Modernization Plan in Arizona Corporation Commission, Docket No. E-00000Q-16-0289. This docket, the “Review, Modernization and Expansion of the Arizona Renewable Energy Standards and Tariff Rules and Associated Rules” was originally opened in August 2016.  Commissioner Tobin’s Plan includes:

1. The conversion of the “Renewable Energy Standard Tariff” to the “Clean Resources Standard and Tariff”;
2. A clean energy standard goal of 80% by 2050, with the ultimate goal of 100% clean energy;
3. An energy storage goal of 3,000MW by the year 2030;
4. A biomass energy goal of 60MW;
5. A dispatchable clean peak energy target;
6. The development and implementation of new energy efficiency policies;
7. Implementation of electric vehicle infrastructure for charging stations in new construction, existing homes and large fleet owners and on highways; and
8. Modifications to the integrated resource planning process.

On February 7, 2018, Commisioner Tobin filed in the docket a fact sheet with questions and answers regarding the Proposed Energy Modernization Plan. These two filings, read together, lay out a vision for moving the Arizona electric industry farther away from fossil fuel dependence and closer to clean energy sources including battery storage.  They also signal an extensive revision to the Arizona Corporation Commission’s administrative, renewable energy, energy efficiency and resource planning rules.

While Arizona has been quick in the past to support renewable energy and energy efficiency programs and standards, it has also learned that the actual implementation process can be challenging and prolonged. Invariably, when one proposal is presented, others follow.  Already, the press in Arizona has reported that an alternative plan is being proposed by a California billionaire who wants to implement renewable energy standards in Arizona by amending the Arizona Constitution.  Certainly, as special interest groups see the Proposed Energy Modernization Plan as a vehicle to promote their individual platforms, more options will come rolling in.  Questions regarding costs to customers, system reliability and regulatory jurisdiction over participants have been asked before and will likely need to be addressed again.  Hotly contested issues such as ownership of assets, stranded cost recovery and cross- subsidization lay waiting on the periphery and may also need to be addressed.

There is much work to be done in order to make the Proposed Energy Modernization Plan a reality.  All indications are that the Arizona Corporation Commission, utilities and customers have a lot to do to sort out what is in the best public interest.  It has been done before and can be accomplished again, hopefully with the lessons of the past serving as a guide for how to navigate the challenges of the future.