A vote by the Arizona Corporation Commission (ACC) earlier this week moved to limit energy companies’ push to meet Environmental, Social, Governance (ESG) goals.
The ACC voted 4-1 on Tuesday to draft rules to repeal existing rules and mandates for renewable energy as well as electric and gas energy efficiency: the Renewable Energy Standard and Tariff (REST) Rules and the Energy Efficiency Standards (EE), also known as the Demand Side Management (DSM). Per the commission, the rules and mandates for REST and EE/DSM resulted in incentives for renewable energy projects and services, since utilities were required to file proposals describing REST compliance.
Commissioner Ana Tovar was the sole “no” vote on the motions. The standards behind EE/DSM expired in 2020, but previous commissions didn’t repeal the rule.
The commission noted in Wednesday and Thursday press releases that the rules, tracing back to 2006 for REST and 2010 for EE/DSM, have cost customers nearly $3.4 billion through corresponding surcharges. REST surcharges have cost ratepayers nearly $2.3 billion, while EE/DSM surcharges cost nearly $1.1 billion.
Commissioner Nick Myers said in Wednesday’s press release that the rules and mandates were unnecessary and would result in a drastic cost increase to consumers.
“I believe it is time for the Commission to consider repealing these rules and mandates that appear to unnecessarily drive-up costs,” said Myers. “Utilities should select the most cost-effective energy mix to provide reliable and affordable service, without being constrained by government-imposed mandates that make it more expensive for their customers.”
In Thursday’s press release, Chairman Jim O’Connor — who filed the motion to repeal REST — said that the commissioners from nearly 20 years ago were “well-intentioned” in their vision for reducing the state’s carbon footprint through the REST rules, but that no cost controls were ever implemented, at the detriment of ratepayers.
“In 2006 when the REST rules supplanted the EPS rule, concerns by the dissenting Commissioner cited the lack of cost control measure that would negatively impact ratepayers, and the then-Chairman Hatch-Miller intended that the Commission review annually whether it was in the best interest of the ratepayers. Those reviews never occurred and costs were never considered,” said O’Connor.
O’Connor further remarked that contracts in pursuit of environmental mandates ultimately burdened the ratepayers.
“We began the steps needed to repeal a rule that has cost ratepayers billions of dollars in out of market priced contracts,” said O’Connor. “Mandates distort market signals and are not protective of ratepayers.”
Commissioner Kevin Thompson — who filed the motion to repeal EE/DSM — stated in the press release that the repeal marked a victory for ratepayers, and the end of “feel-good programs” that lack affordability and reliability.
“Arizona utilities have collected over a billion dollars in ratepayer surcharges for efficiency initiatives that have done little to avoid the need for new generation and have benefitted a select few,” said Thompson. “Energy efficiency programs are routinely pushed by vocal special interest groups where the economic benefits favor a small group of customers, and the large majority of ratepayers foot the bill.”
The entire rulemaking process will take over a year, according to commission staff. The REST and EE/DSM repeal are part of a greater, five-year review of existing ACC rule packages.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
If someone wants to own an electric vehicle (EV), it is perfectly within their right to do so. That’s what it means to have freedom. But EV owners should be the ones to bear the burden of any costs associated with the necessary infrastructure improvements. And they should absolutely be responsible for paying for any excessive demand placed on the grid.
But that’s not the way the left sees it.
As part of its Green New Deal dream, the left has been pushing an agenda that significantly increases the amount of EVs on the road despite slowing demand from consumers and companies like Ford losing billions on them just this year. And Arizona utilities have fallen right in line, planning for 1 million EVs by 2030 while APS alone plans to have a 100% “carbon free” vehicle fleet as part of its commitment to go “Net Zero” by 2050.
The Arizona Corporation Commission (ACC) struck down rule changes advancing renewable energy usage that would’ve increased the cost to taxpayers. The energy mandates would have required energy utilities to rely more on renewable energies following a certain timeline, which would have increased the revenue requirements of Arizona Public Service Company (APS) by nearly $4 billion and Tucson Electric Power (TEP) by nearly $1.13 billion — costs which taxpayers would’ve borne, as high as 43 to 58 percent more monthly.
These were energy mandates similar to those rejected by voters in the failed Proposition 127 of 2018, which would have required electric utility companies to acquire a certain percentage of their electricity from renewable resources each year, from 12 percent in 2020 to 50 percent in 2030. About 68 percent of voters rejected Proposition 127.
Chairwoman Lea Márquez Peterson joined commissioners Jim O’Connor and Justin Olson in their “no” votes against the rule changes. Commissioners Anna Tovar and Sandra Kennedy voted for the rules.
APS, TEP, and the Grand Canyon State Electric Cooperative Association (GCSECA) all expressed support for the rule changes.
O’Connor said that the utilities are “serious and sincere” with their clean energy efforts. He said that the utilities don’t need rules from the state, especially since they will pose risks to ratepayers.
“The proposed energy rules represent a multi-year, good-faith effort by a great many. During this long process and after years of opposition, our state’s major electric utilities have embraced clean energy and our proposed rules. I was surprised and I made it the focus of my efforts to understand that turnaround,” said O’Connor. “I have concluded its best for the utilities to remain in charge of their resource plans just as they have in the past and it is better for the commission to continue to rely on its prudent standard for holding utilities accountable for the resource decisions and their costs.”
Tovar said the commissioners should be ashamed that they wasted years of staff and commission work from “getting in the way of what is right.” Tovar called out two of the commissioners, O’Connor and Peterson, for “flip-flopping” on their stance concerning the rules. She lamented that commissioners weren’t willing to compromise, like she claimed she had, for the greater good: economic growth, health, and environmentalism through these rule changes. Tovar added that the rule changes had diverse, bipartisan support statewide.
“What this tells me is that these rules are failing because of politics. And basing our votes on politics is a dangerous game, and it is a dangerous game to play with something so important to Airzona’s future. Ensuring clean energy in Arizona is our future, and it’s one of the top priorities I had even before running for this commission. When I took office, I wanted to change the rules. Make them more aggressive. Get us to a clean future, sooner. But I looked at the fads and I knew there was much work to be done on them,” said Tovar. “Let me be clear: this isn’t the Green New Deal. This is Arizona’s clean energy package and [I am] very proud of the work that has been accomplished thus far.”
Olson expressed confidence that renewable energy was still attainable without costing customers more. He also mentioned how he attempted to compromise by introducing amendments that would help reduce the cost to taxpayers with passage of the energy rules. Olson indicated that Tovar’s characterization of commissioners switching votes was unfair because their change reflected new information that came to light.
“We as a commission should have a very clear policy that tells our utilities that they should invest in the technologies that are the most cost-effective method of meeting the energy demands of our customers. And what we have before us in these energy rules is not that,” said Olson. “That is the appropriate demand. That is what the constitution requires of us to expect of our utilities, and that is what we should continue to pursue. That does not prohibit us and our utilities from increasing the amount of renewable energy resources that our utilities use to provide the energy for their customers. In fact, it creates a win-win scenario where our utilities will be investing in the renewable energy projects that are the most cost-effective. We can benefit rate bearers and adopt these technologies at the same time. That’s the approach we should take.”
Kennedy said that clean energy was cost-effective with modern technology. She asserted that it wasn’t possible to determine future outcomes based on present actions.
Márquez Peterson said she supported clean energy by 2050, but an equal priority for her was affordability for consumers. Márquez Peterson expressed confidence that utilities had turned a corner and were willing to adopt clean energy of their own volition.
“It took years to get actual cost data that consumers have been asking for,” said Márquez Peterson. “I believe utilities should be justly and reasonably rewarded when they make prudent and proactive investments in the next generation of clean and renewable energy resources, so long as they don’t jeopardize the safety and reliability of the grid or the affordability of rates.”
In a statement to AZ Free News, Justin Olson asserted that the commission’s vote respected the will of voters.
“First of all this is a tremendous victory for ratepayers. I fought to enact policies to make rates as affordable as possible. Many times I was a lone voice crying at the wilderness — I was the only vote against these mandates,” said Olson. “This was the commission telling the utilities that they must invest in technologies that are the most cost-effective method of generating energy.”
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
The Arizona Corporation Commission (ACC) passed a motion to prohibit utility companies from mandating the COVID-19 vaccine for their employees, 3-2. Commissioners Lea Márquez Peterson, Justin Olson, and Jim O’Connor voted for a policy prohibiting COVID-19 vaccine mandates; Commissioners Sandra Kennedy and Anna Tovar voted against it. If utility companies do impose a mandate down the road, they will be subject to fines.
O’Connor insisted that it wasn’t good for employment or individual choice to allow utilities to mandate the COVID-19 vaccine. He reminded the commissioners that all of President Joe Biden’s vaccine mandates have been halted by federal courts.
“I think this is our good way of taking care of Arizona’s citizens, workers, and voters,” said O’Connor. “If you force-vaccinate everybody and either having a lot of people leave or fire a lot of people — how do you keep the lights on? How do you keep the water flowing? How do you keep running the business? […] And then, how are you going to treat these employees on their way out the door, after their ten, twenty, thirty years of insurance?”
Olson added to O’Connor’s remarks with a more pointed criticism of Biden’s mandate.
“The unconstitutional overreach of the Biden Administration needs to be challenged,” said Olson. “It is absolutely inappropriate for the government to require anyone to be vaccinated against their will. Anybody has the right to receive the vaccination, but we as the government do not have the right to be requiring folks to make a choice between receiving a vaccine against their will or losing their employment.”
None of the utility companies present at the meeting reported having a vaccine mandate. The companies all noted that they would comply with federal law and regulations.
Kennedy criticized the commission, saying that mandatory vaccinations aren’t new concepts and that those opposed to vaccine mandates are making the pandemic a partisan issue. She added that the vaccine didn’t fall under the question of freedoms.
“It is not responsible for a commission without a single expert in health care or medicine to weigh in on this issue,” said Kennedy. “It is also not responsible for commissioners to make statements spreading unfounded rumors which confuse and endanger the public. I would ask commissioners, before you take a stance possibly geared towards political ambition, to consider the Arizonans filling our hospitals and in ICU beds right now. Many hooked onto ventilators, dying alone.”
Olson responded by reiterating the ACC’s constitutional responsibility to protect employees’ freedom to choose.
Tovar said she felt it was premature to vote on something barring vaccine mandates when there aren’t any in place currently.
The policy to bar vaccine mandates was introduced by Olson and O’Connor last month.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
If you don’t typically pay attention to the Arizona Corporation Commission, now is a good time to start.
The role of this government agency is to set rates and policies for utilities. That sounds simple enough, right? But for over a year now, the commission has been in the process of developing a “clean energy” plan that looks to ban all fossil fuels in our state. Next week, this renewable energy mandate will be brought up for a vote again. And the consequences could be a disaster.
Green New Deal mandates would cost ratepayers over $6 billion
In July 2020, the commission quietly released its plan to impose California-style energy mandates in our state. But it wasn’t until August of this year that an independent cost analysis had been completed. And the results were eye-opening.
In order to achieve the 100% clean energy mandate by 2050, utilities would need to phase out all fossil fuels, purchase more solar and wind generation, expand lithium-ion battery storage, and convert natural gas generation to green hydrogen. The cost for all this would be over $6 billion, which comes out to an estimated $60 per month or $720 per year for the average ratepayer.
Remember when the green energy lobby said that these mandates would actually save you money? It turns out that was just another lie. But the cost isn’t the only issue.
