Western State Wants Solar Power

by Ryan Randazzo - Apr. 25, 2010 12:00 AM
The Arizona Republic

It's time to consider raising the amount of energy Arizona utilities are required to get from solar power, one of the five state utility regulators said Friday.

Corporation Commissioner Paul Newman issued a statement asking for support and feedback on a proposal to increase the requirement that utilities get 15 percent of their energy from renewable sources, such as solar, by 2025.

He noted that New Mexico, Colorado, Nevada, California, Oregon and Utah have higher standards, with requirements to get 20 percent to 33 percent of their power from renewables by 2020-25.

Interest in renewable power is rising, and solar and wind power have many supporters, but Newman's proposal is likely to face opposition because the existing Corporation Commission requirement already is being challenged in court.

Alternative energy is more expensive than power from coal or natural-gas power plants, but it has little to no pollution, and renewables don't need fuel.

"Arizonans are hurting, and we must balance citizen demand for solar with the cost," Newman said. "But let's also keep in mind that investing in solar means we lower significant long-term costs such as fuel."

The written statement follows a promise to explore raising the requirements that Newman made during a recent hearing on the rebates that Arizona Public Service Co. pays people to put solar-power panels and solar water heaters on their homes.

The incentives have been so popular that APS was running out of money to pay the rebates.

APS residential customers pay a maximum $3.46 monthly tariff to fund renewable-energy projects, from major solar, biomass or other alternative-power plants to rooftop solar. The maximum tariff for business customers is $128.70 a month; industrial customers have a $386 monthly cap. APS will collect about $86.7 million from the tariffs this year.

Other utilities fund renewables through similar charges.

"I'm concerned that there is not enough money in the bucket," Newman said at the April 13 hearing.

Newman proposed taking money from the "power-supply adjuster" that APS collects to buy power from other utilities and pay for fuel for its own power plants, and spending it on more solar rebates.

APS collects the PSA money throughout the year in a separate charge on bills. Power and fuel prices spike in summer.

When APS doesn't collect enough through the PSA, it raises the charge, and when it over-collects because prices are lower than expected, it redistributes the money to customers through lower PSA charges. The utility can't profit on the PSA.

Newman said the PSA is "over-collected" by about $102 million today, and he wants to take $25 million from it to spend on more solar.

He could not be reached Friday for further comment.

Having just heard the news, APS officials were hesitant to comment on the plan.

"We are evaluating Mr. Newman's proposal," APS spokesman Alan Bunnell said.

Opponents of the renewable requirement said raising it is a bad idea.

"The existing renewable-energy rules are illegal, costly to consumers, and more about ideology than sound energy policy," said Clint Bolick, who has been challenging the rules in court for the Goldwater Institute. "Commissioner Newman's proposal makes them even more so."

Bolick's group challenged the authority of the Corporation Commission to mandate power from renewables but lost. It is appealing the case.

"The rules relate to ratemaking only in the tortured sense that they inexorably produce higher utility prices," Goldwater lawyers wrote in a recent brief for the appeal.

Other experts said proposal would help the solar industry.

"In this crazy economy we need more competition, more economic drivers, and more jobs," said attorney Jordan Rose, whose law firm represents several renewable-energy companies. "Increasing the (requirement) will make Arizona the unquestionable first choice among renewable-energy companies looking to locate their business in the United States."

Supporting renewable power now will bring the price down in the future, she said.

"A healthy solar market will eventually not need rebate money at all," she said. "The sooner we raise the (requirement) the sooner the solar industry will be able to exist without rebate money."