/ Modified feb 13, 2020 4:41 p.m.

The price of clean energy in Arizona

Utility companies are embracing clean energy plans, but also looking to increase rates for consumers to finance the changes.

TEP Solar Field A solar array used by Tucson Electric Power to add renewable energy to the grid, August 2019
Christopher Conover/AZPM

The Buzz

TEP and APS renewable energy

NPR

Two of Arizona’s biggest utilities are planning changes to how they generate power and asking the state to approve higher electricity rates for their customers.

Arizona Public Service recently announced that the utility, which serves about 1.2 million customers, will transition to 100% carbon-free energy by 2050. This significant change comes from a company that has previously fought requirements to get more of its electricity from renewable sources.

Brad Albert, the vice president of resource management for APS, explained why the company is making this change now. The declining price of renewable technology and energy storage technology were prime considerations.

“We feel like it has finally reached a price point where we can carry out a very ambitious clean energy plan while still, importantly, protecting the affordability of our product for our customers,” Albert told The Buzz.

In 2018, APS spent nearly $40 million successfully fighting Proposition 127, which would have mandated that utility companies switch to 50% renewable energy by 2030. Albert said APS and its parent company Pinnacle West opposed the proposition because of its lack of flexibility and concerns that they would have had to dramatically increase rates.

Under the company’s new plan, Albert said they are trying to keep rate increases at or below the rate of inflation.

Tucson Electric Power is also working toward generating energy with less carbon-intensive sources. But that plan carries a steep cost, which TEP is trying to recoup by raising its rates approximately 7%. The utility has spent the past month making its case to the Arizona Corporation Commission trying to justify the rate hike.

Protesters showed up to the hearings. They argued that the steep rate hikes did not come with a commitment to a cleaner future.

Stella Heflin, a co-lead of the Arizona Youth Climate Strike’s Tucson Chapter, was one of those protesters.

“Tucson Electric Power is making a conscious decision to continue investing in fossil fuels, and we need to be having a clean energy transition immediately,” Heflin said.

Joseph Barrios, a spokesperson for TEP, said the company’s top commitment when crafting its proposal was reliability. The plan relies on natural gas while the company transitions away from coal.

The testimony in TEP’s rate case with the Corporation Commission will finish soon. Many stakeholder groups that are parties to the case, including the commission’s own utilities division, recommend an increase that is far less than what TEP is requesting.

Kris Mayes served as an Arizona Corporation Commissioner from 2003 to 2010. During that time she co-authored Arizona’s renewable energy standard, which required utilities to get 15% of their power from renewable sources by 2025.

Mayes is a sustainability expert, renewable energy advocate and professor at Arizona State University. Mayes said the 15% renewable energy goal for utilities was a good start in the early 2000s, but the state is long past due to increase that requirement to at least 50%.

“Clearly, it’s time to go to a much higher, much more ambitious level. And I think 50% is the right target,” Mayes told The Buzz. “It needs to be a standard. We need to tell the utilities they have to do this, and we need to give the utilities a timetable upon which to do it. “

The Arizona Corporation Commission declined an interview request due to the ongoing rate case hearings. In a statement, the commission said it's in the process of revising its renewable energy standard and tariff rules and may modify those requirements during rule-making.

The Buzz
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