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ARIZONA STATE SENATE
Fifty-Sixth Legislature, First Regular Session
corporation commission; electric generation resources
Purpose
Establishes Arizona public policy regarding the regulation of public service corporations. Allows the Arizona Corporation Commission (ACC) to adopt rules to ensure the compliance of public service corporations. Prohibits the ACC from adopting or enforcing any policy, decision or rule that conflicts with the outlined regulation requirements.
Background
The ACC oversees the electric power industry in Arizona but does not have authority over electric service provided by a city, municipality, irrigation district, electric district or utilities operated by tribal authorities (ACC).
The ACC consists
of five members elected at the general election and who serve for
four-year terms (Ariz.
Const. art. 15, § 1). The Legislature may enlarge the powers and extend the
duties of the ACC and prescribe rules and regulations to govern proceedings
institute by and before it. Until such rules and regulations are provided by
law, the ACC may make rules and regulations to govern such proceedings (Ariz.
Const. art. 15, § 6).
A public
service corporation is all corporations other than municipal engaged in:
1) furnishing gas, oil or electricity; 2) furnishing water for irrigation, fire
protection or other public purposes; 3) collecting, transportation, treating,
purifying and disposing of sewage through a system, for profit; 4) in
transmitting message; or 5) furnishing public telegraph or telephone service (Ariz.
Const. art. 15, § 2).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Public Service Corporations
1. Deems the public policy of Arizona that public service corporations should pursue the use of clean energy resources and the reduction of carbon emissions resulting from the generation of energy for retail electric sales, provided the mix of critical electric generation resources used by each public service corporation to meet its customer's needs is the lowest cost method of providing safe and reliable electricity services while taking into consideration the system-wide costs associated with meeting customer demand for services at all times of each day and throughout all seasons of the year.
2. States that the clean energy resources and carbon emissions reduction policies of Arizona require public service corporations to derive the following percentage of retail kilowatt sales from renewable energy resources by:
a) 13 percent by December 31, 2023;
b) 14 percent by December 31, 2024; and
c) 15 percent by December 31, 2025, and each year thereafter.
ACC
3. Allows the ACC to adopt rules to ensure the compliance of public service corporations.
4. Prohibits the ACC from adopting or enforcing any policy, decision or rule that:
a) increases or decreases the prescribed percentages;
b) conflicts with the prescribed requirements; or
c) directly or indirectly regulates a public service corporation's carbon emissions.
5. States that the prescribed requirements must not prohibit the ACC from exercising its ratemaking or authority over public service corporations.
Definitions
6. Defines carbon emissions as carbon emissions resulting from the combustion of fossil fuels, such as coal, petroleum, natural gas, oil, shale or bitumen.
7. Defines clean energy resources as solar, wind, biomass, geothermal, nuclear and hydroelectric technologies that generate electricity.
8. Defines critical electric generation resources as any generation resource used or acquired by a public service corporation, including solar, wind, biomass, geothermal, nuclear, hydroelectric, fuel-cell technology, natural gas or coal or any other petroleum fuel source.
9. Defines lowest cost method as the method of meeting customers' energy needs that results in the lowest amount of expenses and rate base that the ACC's established ratemaking practices allow a public service corporation to recover from ratepayers.
10. Defines renewable energy resources as solar, wind, biomass, geothermal and hydroelectric technologies that generate electricity.
Miscellaneous
11. Contains a statement of legislative findings.
12. Becomes effective on the general effective date.
Prepared by Senate Research
February 14, 2023
RA/slp