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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
corporation commission; electricity; reliability; management
Purpose
Prohibits the Arizona Corporation Commission (ACC) from authorizing or approving the retirement of an electric generation facility as presented in a rate case, integrated resource plan or other submission to the ACC unless there is a new electric generation facility with equal or greater power generation that is presently available on the grid.
Background
The ACC regulates investor-owned or privately-owned utilities that provide gas, water, electricity or telephone service (ACC). The ACC has the power to inspect and investigate the property, books, papers, business, methods and affairs of any corporation whose stock is offered for sale to the public and any public service corporation doing business within Arizona (Ariz. Const. art. 15 § 4). The ACC has the power and authority to enforce its rules, regulations and orders by the imposition of such fines as the ACC may deem just (Ariz. Const. art. 15 § 19). The Arizona Constitution allows the Legislature to enlarge the powers and extend the duties of the ACC and to prescribe rules and regulations to govern proceedings by and before the ACC (Ariz. Const. art. 15 § 6).
The Office of Electricity operates under the U.S. Department of Energy with the purpose of conducting research, development and demonstration programs to strengthen and modernize the United States power grid so that the United States maintains a reliable, resilient and secure electricity delivery infrastructure. The Office of Electricity focuses on modernizing grid systems and components, grid controls, communications and energy storage to improve safety, reliability and performance of the electric power grid (DOE).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Prohibits the ACC from authorizing or approving the retirement of an electric generation facility as presented in a rate case, integrated resource plan or other submission to the ACC unless there is a new electric generation facility with equal or greater power generation that is presently available on the grid.
2. Requires the ACC, when assessing the amount of replacement power, to consider imminent and planned firm power closures in Arizona and other member states of the regional transmission organization.
3. Requires the ACC, if other states are not replacing a retired electric generation facility to add the shortages to the firm power replacement calculations before approving the closure.
4. Requires the ACC to prioritize new electric generation facilities that are from dispatchable sources ahead of proposed new generation facilities that are from nondispatchable sources.
5. Requires the ACC to project to increase dispatchable electricity by at least five percent between 2025 and 2030.
6. Requires the state and the ACC, if federal government regulations require costly upgrades or other requirements that lead to the closure of an existing firm power plant, to seek a waiver until there is a replacement firm power plant available to the electric grid that would replace the retired firm power plant.
7. Requires the state and the ACC, if a waiver is not granted, to seek an injunction or other cause of action in a court of competent jurisdiction to cease the implementation of the regulations until a replacement firm power plant is available and services the customers.
8. Requires an electric generation facility to inform the ACC within 30 days after the electric generation facility receives notice of an external regulatory action that would make the continued operation economically infeasible or would cause involuntary retirement or decommissioning.
9. Requires the ACC, on receipt of the outlined information relating to an external regulatory action from the electric generation facility, to open an investigatory docket to determine how an involuntary retirement or the decommissioning of an electric generation facility would impact the reliability and affordability of energy resources and recommend any necessary action to defend the electric generation facility.
10. Allows the ACC to request that the Attorney General file an action in a court of competent jurisdiction or participate in any administrative proceedings.
11. Allows the ACC and the Attorney General to use legislative appropriations to effectuate the outlined requirements relating to electric generation facilities.
12. Defines dispatchable as a source of electricity that is readily available for use on demand or that can adjust according to the market needs on request of a grid operator and that does not include routine maintenance or repairs.
13. Defines electric generation facility as a facility that uses water, coal, natural gas or nuclear to generate reliable or dispatchable electricity to customers.
14. Determines that firm power includes dispatchable, reliable power generation and battery storage in excess of 24 hours and does not include power that is not dispatchable.
15. Defines reliable as a source of electricity that is not subject to intermittent availability and that has a performance standard of 80 percent or greater which only falls below that level during routine maintenance or repairs.
16. Contains a statement of legislative findings and intent.
17. Becomes effective on the general effective date.
House Action
NREW 2/18/25 DP 5-4-0-1
3rd Read 2/26/25 33-27-0
Prepared by Senate Research
March 7, 2025
SB/slp