Corporation Commission’s Rejection of Proposed Energy Rules Takes Arizona Off Course

ACC vote to reject rule to reach 100% clean energy by 2050, along with other utility reforms, comes after more than three years of stakeholder engagement and bipartisan cooperation, despite widespread support.

PHOENIX, May 6, 2021 — Today, national business group Advanced Energy Economy (AEE) reacted to the Arizona Corporation Commission’s (ACC) decision late yesterday to reject a proposal to transition the state’s electricity generation to 100% clean energy resources by 2050, even after it had been drastically watered down. Despite more than three years of stakeholder engagement and bipartisan cooperation, and with utilities, businesses, consumer advocates, and communities of faith all aligned in support, the ACC voted down its proposed energy rules* 3 to 2 at its Open Meeting. 

“This is a disappointing end to a three-year-long process that consolidated broad support behind a shift to cleaner, more affordable energy options for Arizona families and businesses,” said Shelby Stults, Arizona state policy lead at Advanced Energy Economy. 

The proposed rules failed even after adoption of an amendment by Commissioner Justin Olson that reduced the rules to a non-binding set of goals for utilities. Commissioners Olson (R) and O’Connor (R) both voted with Chairwoman Márquez Peterson (R) to adopt this amendment, while Commissioners Kennedy (D) and Tovar (D) opposed the amendment, seeing it as depriving the ACC of any enforcement mechanism. After his amendment was adopted, however, Olson voted against the amended rules, resulting in their defeat. Olson cited opposition to energy mandates and voter rejection of Proposition 127 in explaining his vote, while Kennedy and Tovar voted against the amended rules in protest of the watered-down content.

The proposed Energy Rules contained wide changes beyond the carbon-free electricity goals. The failed measures included reforms to integrated resource planning, accountability for utilities, new standards for demand-side resources, and more. 

“The failure of these energy rules marks so much more than rejection of a commitment to 100% clean energy,” said Stults. “This was a chance to strengthen and modernize utility regulation to the benefit of all Arizona ratepayers. That chance has been lost. It is truly discouraging to see so much work toward broadly-supported, bipartisan goals unravel in the last two hours of ACC’s Open Meeting.”

Also noteworthy in the more than 11-hour hearing:

• Extensive arguments over parliamentary procedure to avoid bringing specific items to a vote.
• Completely uncited claims by Commissioner O’Connor that “the energy rules would increase rates for all ratepayers by $42 a month in perpetuity.” When asked for citations, O’Connor could provide nothing to substantiate these claims.
• Hours long debates over the Ratepayer Impact Measure (RIM) test and what should qualify as an examined resource by the RIM test. 

 Background Materials

• Feb. 8: Read our overview: "In Arizona, an All-Out Assault on the ACC’s Clean Energy Rules." 
• Jan. 26: Read our statement on HB 2248 and SB 1175, “AEE Urges Arizona Lawmakers to Reject Bills Stripping ACC Authority Over Electricity Generation."
• April 28, Mar. 3: Read our previous statements on SB 1459, “Arizona House, Senate Passed Bills Creating Electric Power Market Uncertainty, Hurt Business," and "Arizona Legislature Confuses Oversight of ACC, Creating Regulatory Uncertainty."

*Note: AEE offers free, complimentary access to its PowerSuite online platform tracking all federal and state energy legislation and regulatory filings, plus RTO/ISO policy action, to credentialed media. Sign up for a free trial and contact Monique Hanis (mhanis@aee.net) for permanent media access.

Background Materials

• Read our overview of HB 2248 and SB 1175, "In Arizona, an All-Out Assault on the ACC’s Clean Energy Rules." 
• Read our statement on HB 2248 and SB 1175, “AEE Urges Arizona Lawmakers to Reject Bills Stripping ACC Authority Over Electricity Generation."
• Read our previous statements on SB 1459, “Arizona House, Senate Passed Bills Creating Electric Power Market Uncertainty, Hurt Business," and "Arizona Legislature Confuses Oversight of ACC, Creating Regulatory Uncertainty."