In major reversal, Arizona utility regulators kill 100% clean-energy rules in the state

Three Republican utility regulators have voted down a proposal for 100% carbon-free energy in Arizona that was considered, debated, workshopped and offered for public comment for more than five years.

The rules appeared on the verge of passage last year when Jim O'Connor, a Republican member of the Arizona Corporation Commission, and Anna Tovar, a Democratic member, reached a compromise.

But O'Connor backtracked Wednesday and voted against that deal, saying state rules were not necessary.

It was the second time a Republican commissioner changed their mind after giving the rules initial support. Chairwoman Lea Marquez Peterson initially voted for clean-energy rules in 2020, but opposed the same rules months later when they came up for final approval.

The new rules would have updated the Renewable Energy Standard and Tariff that an all-Republican commission passed in 2006 and that requires utilities to get 15% of their power from renewables by 2025, as well as the 2010 energy-efficiency requirements for utilities to use efficiency measures to meet 22% of their energy demand by 2020.

"I have repeatedly asked myself if the proposed energy rules are necessary at this time," O'Connor said, adding that he supports clean energy.

"I have concluded the utilities are serious and sincere with their commitments to clean energy," he continued. "I see they face pressures, some helpful, some unhelpful, from a variety of sources, including from Wall Street and from the federal government. I have concluded they do not need these state-level energy rules at this time, which impose risks for ratepayers."

Tovar, who had hashed out the compromise with O'Connor, was audibly frustrated after his vote.

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“We as commissioners should be ashamed that all of this painstaking effort was in vain because we let politics get in the way of what was right,” Tovar said, scolding her fellow commissioners for their changed votes on the rules.

Olson, who has opposed the rules consistently, voted no, as did Chairwoman Lea Márquez Peterson, both citing cost concerns.

Olson defended his fellow Republicans' switched votes, saying that they changed their votes after they had additional information that the rules would increase utility prices.

"We should not be adopting policies that drive up these rates," Olson said.

Democrat Sandra Kennedy voted yes on the rules and challenged Olson's comments on cost.

"I don’t anticipate the price of sunshine, wind or geothermal heat from the Earth's core changing anytime soon," she said.

Márquez Peterson said that voluntary commitments from utilities have opened a "new chapter in the transition to clean energy," before voting against the rules, which failed 3-2.

Long history for energy requirements

Several Republican and Democrat members of the Corporation Commission, past and present, have worked to increase the requirements over the years, and Wednesday's vote comes almost six years after those efforts began in earnest.

• In 2016, Republican Commissioner Doug Little proposed doubling the existing state standard, saying at the time that declining prices for solar and wind energy, as well as increased focus on carbon emissions from fossil-fuel plants, warrant more renewables.

• Republican Commissioner Andy Tobin then proposed including carbon-free nuclear power to the renewable-energy rules. The discussion of whether to include nuclear in the clean-energy goals carried through to the rules voted down Wednesday.

• In 2018 Tobin then proposed a plan that utilities get 80% of their energy from clean sources, which would include nuclear along with solar, wind and other traditional renewables.

• Regulators in 2020 were preparing to vote on that initiative when Republican Robert Burns and Kennedy proposed an even more ambitious plan for 50% of the state's electricity to come from renewables by 2030, and 100% be carbon-emission free by 2050.

• Márquez Peterson supported most of that plan, but didn't like that it had a specific requirement for renewable technology, so Burns and Kennedy amended the measure to get her support, and in November 2020 the rules passed an initial vote with Márquez Peterson's support.

• But then in May of 2021, Márquez Peterson supported Olson's proposal to change the requirements to "goals." She did this even though Olson had no intention of approving the final rules he was amending. Democrats Kennedy and Tovar said that was watering down the rules too much, and they voted with Olson to kill the proposal.

• But within days, Tovar and O'Connor worked out a compromise to maintain the new energy rules as requirements while pushing back the date when utilities must get 100% carbon-free energy by 20 years to Dec. 31, 2070. That passed on a 3-2 vote, but commission rules require a second vote by commissioners.

• In December, regulators were scheduled to vote on the issue but O'Connor had given signals that his support had changed. After he made a statement to explain his vote, Tovar moved to push the vote back a month.

• That led to Wednesday's action, when O'Connor voted against the compromise he reached last year with Tovar.

A variety of environmental and clean-energy groups, not to mention businesses with clean-energy goals of their own that want to operate in Arizona, had supported the rules.

Many of those groups lamented Wednesday's vote.

"Today is a sad day for Arizona," said Ellen Zuckerman, utility program co-director of the Southwest Energy Efficiency Project. "The Commission failed to advance key consumer protections to eliminate energy waste and make everyone's electricity bills more affordable. After years of hard work and careful study, billions in potential cost savings and thousands of local jobs are now in jeopardy. We urge the Commission to immediately revisit its decision today."

Reach reporter Ryan Randazzo at ryan.randazzo@arizonarepublic.com or 602-444-4331. Follow him on Twitter @UtilityReporter.

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This article originally appeared on Arizona Republic: Arizona Corporation Commission votes down carbon-free energy rules 3-2