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Ariz. regulators kill 100% clean power proposal amid 'political theater'

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Ariz. regulators kill 100% clean power proposal amid 'political theater'

Despite strong support to completely wean Arizona's power sector off fossil fuels in coming decades, including from Arizona Public Service Co., the state's largest utility, state regulators late on May 5 shot down a sweeping proposal to reach 100% carbon-free electricity by midcentury.

The Arizona Corporation Commission's 3-2 rejection came after a series of contentious amendments that would have watered down and delayed implementation of the regulation, over which the commission has deliberated since 2018. Commissioners Sandra Kennedy and Anna Tovar, both Democrats, joined Republican Commissioner Justin Olson in voting no.

That vote came after Olson joined fellow Republicans Commissioner Jim O'Connor and Chair Lea Márquez Peterson in approving an amendment to make the rules nonbinding. Kennedy and Tovar opposed that and other amendments, which they said weakened the rules, forcing them to oppose the stripped-down proposal.

"I am disappointed that the Arizona energy rules failed last night," Tovar said May 6 in an emailed statement. "The recommended opinion and order aligned with an affordable transition to zero emissions and should have been adopted as written."

The commissioner vowed to continue pushing for clean energy, however. "I am not giving up on these rules," she said. "Arizona remains a great place to invest and the last four years of hard work will not be thrown away. I remain willing to negotiate and compromise to get this done and lead us into a clean future."

'Absolutely a shocker'

The latest setback for clean energy regulations in Arizona followed voters' sound rejection of a 50% renewable energy standard in November 2018, as well as a 2021 legislative session that featured efforts by Republicans controlling the Arizona Legislature to restrict the commission's authority to set renewable energy requirements. While the session's most aggressive legislative efforts failed, Gov. Doug Ducey on May 4 signed Senate Bill 1459, subjecting ACC decisions to a new layer of judicial review.

Nevertheless, the 100% clean electricity target was seemingly on the brink of passage, with both Pinnacle West Capital Corp. subsidiary Arizona Public Service, or APS, and Fortis Inc.affiliate Tucson Electric Power Co. calling for approval of the rules without any additional changes. Technology giants Google LLC, Microsoft Corp. and Salesforce.com Inc. were among a coalition of companies highlighting the importance of an energy efficiency standard embedded in the rules and also backing 100% carbon-free electricity.

"Although it was not approved, we will continue on our path to serve customers with 100% clean energy by 2050, a commitment we made in early 2020," an APS spokesperson said in an email.

Tucson Electric plans to eliminate all coal resources from its power generation portfolio within a decade and reduce its carbon emissions 80% below 2005 levels by 2035.

Moreover, all five commissioners spoke favorably about the underlying goal of decarbonization during the marathon, nearly 12-hour-long meeting.

"It was absolutely a shocker to see things so quickly unravel," Shelby Stults, principal at Advanced Energy Economy, a national business association that supported passage of the rules, said in a May 6 email. "Despite broad support from the utilities, environmental advocates and clean energy business to move the rules forward, the spin, political theater and pressure from the Legislature won the day."

As a result of the decision, Arizona will be at a competitive disadvantage to neighboring states, according to Stults. "Advanced and clean energy resources are more affordable than ever and provide the state with significant economic opportunity in local communities," Stults said. "The ACC had an opportunity to set the state up for success in order to strengthen energy reliability and affordability and instead set the state back significantly."