A highly-anticipated open meeting of the Arizona Corporation Commission (ACC) ended abruptly and without any votes on Thursday, amid debate over how to consider competing proposals for new energy rules that would set the state’s utilities on a path to carbon-neutrality.
Commissioners were considering an ACC staff proposal that included a 100% Clean Energy Standard by 2050 and a new integrated resource planning process without an energy efficiency standard. An alternate proposal put forth by Chairman Bob Burns and Commissioner Sandra Kennedy on Friday included interim targets on the way to carbon neutrality, which the staff proposal did not, as well as a 35% energy efficiency standard by 2030.
A new open meeting will need to be scheduled to consider the rules. In adjourning the meeting, Burns said it would be best for commissioners to “take a deep breath and come back refreshed on this issue.”
Substance vs. process
It is not clear whether the ACC meeting broke down over issues of substance or process.
The Burns-Kennedy (BK) amendment would have struck the entire staff proposal, and replaced it with the new rules that included the efficiency standard and interim targets. Other commissioners had proposed amendments to the staff proposal, and balked at having them considered as amendments to the BK proposal.
“The fact that we’ve only had the BK amendment since Friday and it is a complete rewrite, not an amendment, the process should provide us the amount of time necessary to prepare amendments to that draft,” Commissioner Justin Olson said during the meeting.
After the meeting, Burns told Utility Dive that the breakdown came in part because he had thought other commissioners had sufficient time to review the BK amendment, when in fact they wanted more. “It went kind of bad,” Burns said. “I guess I have to accept most of the blame for that. … People got angry and upset, so I adjourned the meeting.”
Burns also pointed to open meeting laws that will not allow commissioners to talk with more than one other commissioner on a subject, as a reason for the confusion.
During the meeting, Commissioner Boyd Dunn called for a vote on the BK amendment and when it appeared to lack three votes to pass, Burns and Kennedy then agreed to withdraw the amendment.
“Because we put the amendment out a week ago, we thought people had enough time,” Burns said. “And we did hear from a lot of the stakeholders, and they were very pleased with what we were doing.”
Debate over interim targets, how to get there
The BK amendment was supported by environmentalists, but not by utilities.
“The utilities felt it wouldn’t give them enough flexibility,” Burns said. The “flexibility” is a reference to the inclusion of interim targets, which would have precluded utilities from making a sudden shift to carbon neutrality at 2050.
The BK amendment called for a 55% clean energy standard by 2025, 70% by 2030, 80% by 2035, 90% by 2040 and 95% by 2045.
Environmental groups say the interim targets are important to reduce overall emissions and keep utilities on track.
“The longer utilities wait to reduce their carbon emissions, the greater the amount of cumulative carbon dioxide that will be dumped into the atmosphere,” Adam Stafford, Clean Energy Program staff attorney for Western Resource Advocates, told Utility Dive.
Commissioner Lea Márquez Peterson had proposed an amendment to the staff proposal that included an emissions-based standard requiring zero net carbon emissions by 2050 and a 50% reduction in carbon emissions by 2035, as opposed to the technology-based standard in the staff and BK proposals. Her amendment included fewer interim benchmarks than the BK amendment.
“Utilities need the flexibility to achieve the goals,” Márquez Peterson told Utility Dive. She expressed disappointment that the meeting was not able to proceed. “We’re hoping the Chairman puts together another open meeting so we can tackle these issues,” Márquez Peterson said.
On the issue of an emissions or technology standard, Márquez Peterson said it is unclear where all the commissioners stand. “We really haven’t had a thorough conversation about this during our special open meetings,” she said.
Environmental groups have recommended an emissions-based standard that would measure carbon dioxide reduced over time.
Arizona Public Service was represented at the hearing by utility lawyer Ray Heyman, a partner at Snell & Wilmer.
“We want to make sure we are not forced to acquire technologies before they are ready, or get locked into prices when they are too high,” Heyman said during a comment period at Thursday’s meeting.
APS also filed comments on the staff proposal on July 28, saying the utility “believes any standards developed by the Commission should incorporate flexibility, adaptability and simplicity.” The utility also warned against “carve-outs for distributed energy storage regardless of cost to customers.”
Arizona utilities also say they are already working to deliver more clean energy. In June, Tucson Electric Power proposed using solar, wind and energy storage systems to reach 70% renewables by 2035. APS plans to deliver 100% carbon-free energy by 2050 — even without a regulatory mandate — including a near-term target of 45% renewables by 2030.
Asked about substantive disagreements between commissioners, Burns told Utility Dive “it’s hard to say because we didn’t get to vote.” But he said staff’s proposal was “a little bit on the utility-friendly side,” given the lack of interim targets and efficiency standard.
What happens next?
It is unclear how the commission will reach agreement on the new rules. “We haven’t seen three commissioners come together with a clear vision of where they should go,” said Stafford. “Today we didn’t see three votes for any of the proposals.”
Stafford said the ACC’s adjournment was “pretty unusual. I have never seen anything like this.”
A joint statement from Western Grid Group and Sierra Club was critical of the commission’s failure to pass the BK amendment, which they said “proposed bold steps to reform the Commission’s ineffective resource planning and procurement process. … Most egregious is the failure not to extend and expand options for customers to save energy and lower utility bills through energy efficiency.”
The new energy rules have been under consideration for two years, and there have been 10 public meetings. Clean energy advocates warned Thursday’s meeting was the last opportunity for the ACC’s current slate of commissioners to pass clean energy rules in 2020, due to the length of the rules process.
During the meeting, Burns raised the possibility of holding another public workshop to discuss the issues but he later said that would not be a good idea.
“I don’t think that’s a vehicle we want,” Burns said. “We’ll have some more discussions in a staff meeting, and try to get some feel for what kind of procedures” we can use to go forward.