Arizona didn't do it the conventional way -- say, by actually building photovoltaic farms or solar thermal farms or deploying wind turbines or biofuel facilities. Nope. Rather than actually built-out renewable energy sources, the Republican-controlled Arizona House Government Committee voted along party lines and simply redefined what renewable energy meant. By redefining nuclear power as a renewable energy source -- with one stroke of the pen Arizona has succeeded in meeting its renewable energy goal. That's because APS, Arizona's biggest utility, already gets more than 25 percent of its electricity from a nuclear plant, the Palo Verde plant outside of Phoenix.
Nuclear is a meaningful part of the U.S. energy mix
and despite its many financial and technological issues it's going to
continue to be part of our energy picture. But to define it as a
renewable energy source seems arguable. The actually wording in the
bill expanded the term "renewable energy" to mean "renewable and
non-carbon producing energy." And that means nuclear qualifies.
So, with that redefinition and the passage of HB 2701, the utility is no longer obliged to add any more renewable power.
The
bill makes Arizona the only state that includes nuclear power in an RES
(though Utah might be considering this). The bill also sets up a new,
challenging regulatory climate for solar firms and utilities. Rather
than being friendly to solar, Arizona now has more government
regulation of solar business than any other state.
Up until
yesterday, the Arizona Corporation Commission’s Renewable Energy
Standard mandated that utilities must generate 15 percent of
electricity from renewable sources by the year 2025. Arizona also had
generous solar subsidies for consumers and tax credits for
manufacturers.
Which is why it was an important market for leading solar installer and financier Solar City. And a very strong contributing factor to locating solar giant SunTech's new PV panel factory in Goodyear, Arizona
Solar City, SunTech, Arizona-based Kyocera and even APS, the utility itself, were against passage of the bill. And now SunTech might reconsider locating to another state according toThe Phoenix Sun.
Lyndon Rive, the CEO of SolarCity had this to say, "Arizona sent a clear signal to the solar industry by creating its renewable energy standard, and the industry responded. Solar companies expanded here, hired local workers, built local facilities and initiated thousands of clean power projects. HB 2701 would change the rules after the fact. If passed, it would pull the rug out from under the solar industry, eliminate jobs and reverse the flow of investment coming into the state."
Polly Shaw, Suntech America's Director of External Relations wrote to me in an email, "One very important point to us and to many in the industry is Arizona’s commitment to meeting 4.5 percent of its RPS with distributed rooftop generation, and dividing that equally in half between commercial and residential rooftops. That’s important -- siting renewable energy close to demand has proven, documented energy and cost savings benefits to utilities and ratepayers. 2701 removes the DG requirement and its benefits to ratepayers."
GTM Research considered Arizona one of the top states for utility
scale PV deployment in the U.S. because of their state policy: an RPS
with a specific requirement for solar power or distributed generation.
Now, that's essentially toothless.
The Arizona portion of this chart is now a vague hope.
What motivated these sunburnt lawmakers to make this seemingly regressive change? There was a small monthly fee that paid for the program -- less than $4 per month for residential customers. The sponsor of HB 2701, Republican Representative Debbie Lesko, objected to the fee. And evidently, conservative ideological opposition to government interference in utility affairs won the votes.
Now, market forces will have to impel utilities to move towards renewables. Or not.
Shaw of SunTech said, "We found a great reception to the solar industry today at the hearing of the Arizona House Committee on Government. Legislative members signaled that they heard Suntech's interests and those of developers who are right now creating good jobs in the state. Based on today's discussion, we think the Legislature will ultimately correctly see the value that renewable energy offers to Arizona's economic future."
That is a very diplomatic response to a very backward piece of energy policy.
The bill has to move on to the rules committee, so the battle isn't over yet.
