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Arizona regulators reject steps to weaken 'green' power mandate

By Paul Davenport
Associated Press
Tucson, Arizona | Published: 10.31.2006
PHOENIX - Arizona utility regulators on Tuesday rejected proposals to loosen proposed new rules to ramp up requirements for electricity providers to use power from solar, wind and other renewable sources.
The all-Republican five-member commission was expected to vote later Tuesday on the rules to generally require that state-regulated utilities get 15 percent of their electricity from renewable sources by 2025, with annual increases from roughly 1 percent now.
Consideration of the binding regulations culminated approximately three years of workshops and preliminary votes on the issue.
Commission votes in 2005 and early 2006 set the panel's course toward a more aggressive standard, but elements remained controversial.
Earlier, the commission voted to give utilities additional leeway on obtaining waivers on compliance with the rules but rejected an amendment to pause the ramp-up in 2011 if the program doesn't meet an unspecified cost-benefit threshold.
The commission also rejected other proposed changes with the potential to narrow eligibility of some renewable energy projects, including so-called "distributed generation" _ small-scale installations such as residential solar panels or businesses' rooftop arrays.
The standard included a requirement that utilities included distributed generation in their total portfolio of renewable energy.
The rules also allow utilities to use surcharges to recover costs of the program but cap monthly surcharges at $1.05 for residential customers and $39 for most other customers. For larger users such as mines and manufacturers, the cap would be $117.
Supporters say the state should reduce its reliance on fossil fuels for environmental reasons and as protection against rising costs and heavy reliance on foreign sources. Also, according to supporters, the rules give long-term guidance to both electricity providers and potential sources of power from renewable sources.
"Consumers realize that renewable resources is good for our economy, our pocketbooks and our health," Arizona Consumers Council spokesman Al Sterman said in a statement.
Critics cautioned that the new rules will hike costs for consumers while posing uncertainties in other areas.
"We have serious concerns that the surcharge to ratepayers will have to be increased dramatically to allow regulated utilities to meet the demands of (renewable energy standard) without going into bankruptcy," said Tom Jenney, executive director of the Arizona Federation of Taxpayers.
Under the commission's approach, nonrenewable sources include nuclear, coal and natural gas, but not large-scale hydro or direct burning of municipal solid waste.
Gov. Janet Napolitano in September signed an executive order setting goals for the state to reduce emissions of carbon dioxide and other greenhouse gases, creating a new panel of top state officials to recommend ways to meet the goals and directing state agencies to take some steps now.
Also in September, California Gov. Arnold Schwarzenegger signed legislation to require investor-owned utilities to acquire at least 20 percent of their power from renewable sources by 2010, up from 2017 previously.