ARIZONA HOUSE OF REPRESENTATIVES

HCR 2017: renewable energy standards; corporation commission
PRIME SPONSOR: Representative Leach, LD 11 BILL STATUS: Senate Engrossed                 Senate 3^rd Read: SE 16-11-2-1

Abstract

Relating to the requirement that affected utilities generate at least 50% of their annual retail electricity sold from renewable energy sources by 2030.

Provisions

1. Establishes the following minimum annual requirements each affected utility must achieve based on the amount of retail kWh sold during that CY, if required by the ACC:

Year	Renewable Energy	Distributed Renewable Energy
2020	12%	3%
2021	14%	3.5%
2022	16%	4%
2023	20%	4.5%
2024	24%	5%
2025	28%	5.5%
2026	32%	6%
2027	36%	7%
2028	40%	8%
2029	45%	9%
2030 and each year thereafter	50%	10%

a. Eligible renewable energy resources include electricity generated from biogas or biomass electricity generators, distributed renewable energy resources, eligible hydropower facilities, fuel cells that only use renewable fuels, geothermal generators, hybrid wind and solar electric generators, landfill gas generators, new hydropower generators of 10 MW or less, solar electricity resources, and wind generators.  (Sec. 2)

2. Allows an affected utility to use credits acquired in any year to meet these requirements and assigns initial ownership of the credit to the resource owner.

a. Specifies one credit is created for each kWh derived from:

i. an eligible renewable energy resource, including distributed renewable energy resources; and

ii. a distributed renewable energy resource and each 3,415 BTU of heat produced by specified technologies. (Sec. 2)

3. Permits the transfer of credits, with additional conditions related to distributed renewable energy resources. (Sec. 2)

4. Stipulates that:

a. once a credit is retired it cannot be subsequently used to satisfy these requirements or any other regulatory requirement; and

b. an affected utility that trades or sells environmental pollution reduction credits or any other environmental attributes associated with kWh produced may not apply credits derived from that same kWh to satisfy these requirements. (Sec. 2)

5. Instructs the ACC to evaluate the following regarding the prescribed requirements within 90 days of voter approval:

a. the affordability of retail electricity;

b. the well-being of Arizona; and

c. the reliability and resiliency of the electrical grid. (Sec. 2)

6. Requires the ACC to decide whether to implement the prescribed requirements based on the evaluation. (Sec. 2)

7. Prohibits implementation of the prescribed requirements if the ACC finds that the cumulative effect would adversely affect any of the following, but allows consideration of one or more alternatives that alleviate these adverse effects:

a. the affordability or cost of monthly electricity bills paid by the retail electricity customers of affected utilities;

b. the reliability of the electrical grid and the delivery of electric services to retail electric customers; and

c. the well-being of Arizona. (Sec. 2)

8. Directs the ACC to modify and adopt regulations necessary for implementation. (Sec. 4)

9. Declares the rights established by these requirements must be construed broadly. (Sec. 4)

10. Includes definitions. (Sec. 2)

11. Contains a Severability Clause. (Sec. 3)

12. Requires the SOS to submit this proposition to the voters at the next General Election. (Sec. 5)

Current Law

In 2006, the ACC approved the Renewable Energy Standard and Tariff (REST) rules that require each affected utility to satisfy an Annual Renewable Energy Requirement and a Distributed Renewable Energy Requirement. Each year affected utility companies are required to file annual implementation plans describing compliance with the REST rules, such as incentives for customers who install solar technologies for their own homes and business. Utilities are also encouraged to utilize solar, wind, biomass, biogas, geothermal and other similar technologies.

The Annual Renewable Energy Requirement is calculated by applying the applicable percentage to the retail kWh sold during that CY:

Year*	Applicable Percentage
2018	8%
2019	9%
2020	10%
2021	11%
2022	12%
2023	13%
2024	14%
2025 and each year thereafter	15%

Renewable energy resources include an energy resource replaced by a natural, ongoing process, excluding nuclear or fossil fuel (A.A.C. R14-2-1801).

*Although the requirement began in 2006, table only reflects the current and subsequent years requirement.

The Distributed Renewable Energy Requirement after 2011 is calculated by applying the applicable annual percentage (30%) to the affected utility's Annual Renewable Energy Requirement. Distributed renewable energy resources include defined technologies located at a customer's premise and that displace conventional energy resources that would otherwise be used to provide electricity. These include biogas electricity generators, biomass thermal systems, solar devices, combined heat and power systems and wind generators of 1 MW or less (A.A.C. R14-2-1802). 

Additional Information

In February 2018, an initiative to amend the Arizona Constitution was filed that would require affected utilities to: 1) provide at least 50% of their annual retail sales of electricity from renewable energy sources, such as solar, wind and small-scale hydropower, by 2030; and 2) provide at least 10% of their annual retail sales of electricity from distributed renewable energy sources, such as rooftop solar, by 2030.

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Fifty-third Legislature                  HCR 2017

Second Regular Session                               Version 4: Senate Engrossed

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