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Ariz. regulators envision 'integral role' for utilities in EV policy statement


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Ariz. regulators envision 'integral role' for utilities in EV policy statement

Citing potential economic and environmental benefits related to rising electric vehicle sales, Arizona energy regulators on Dec. 18 adopted an overarching policy statement to "encourage regulated utilities to invest in infrastructure and develop programs that support electric vehicle charging and widespread transportation electrification."

While the EV policy does not name any specific investment amounts, it envisions an "integral role" for investor-owned utilities, including Arizona Public Service Co., a subsidiary of Pinnacle West Capital Corp., and Fortis Inc. affiliates Tucson Electric Power Co. and UNS Electric Inc. That role could include "cost recovery for electric vehicle programs" through reasonable charges to ratepayers, the policy statement from the Arizona Corporation Commission said.

"It's an issue of being ahead of the issue rather than trying to react to the issue," Commissioner Boyd Dunn said at the commission meeting ahead of a 4-1 vote to adopt the policy. The document also calls for utilities to "maximize electric grid benefits through appropriate rate designs" for EV charging, including rates that encourage electric vehicle owners to charge during off-peak times.

Arizona, like neighboring California, often produces more solar power than it can use during the middle of the day — excess electricity that could be used to charge electric vehicles while enhancing the operational efficiency of the grid.

Commissioners also highlighted the potential economic benefits of supporting electric vehicles, including emerging employment opportunities in the state. For instance, Lucid Motors Inc., which in September received more than $1 billion from the Public Investment Fund of Saudi Arabia, plans to build its first large-scale factory in Casa Grande.

Commissioner Justin Olson, who cast the lone dissenting vote, said he shared the "cross-subsidization" concerns of several groups opposing the policy statement, including AARP. "I am not comfortable voting for this policy that has been brought forward," he said. While Olson said broader EV adoption "could benefit ratepayers," he thought the creation of the policy was "a bit rushed."

"I too have always shared similar concerns about subsidization," said Commissioner Andy Tobin in response. But he voted in favor of encouraging investments into electric vehicle charging, which aligns with his proposed energy modernization plan.