Institute fights monthly tariff for renewables

Posted on June 29, 2008 | Type: In the News
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The Goldwater Institute is asking the state Supreme Court to strike down rules that require Arizona Public Service Co. to get a certain percent of electricity from renewable sources such as solar.

The organization filed a petition last week arguing that the Arizona Corporation Commission overstepped its authority by requiring APS to charge customers a monthly tariff to support renewable energy.

Officials said they are hopeful that by targeting the APS tariff, they can get the renewable-energy rules stricken and free other state utilities from the requirement.

The commission passed a requirement in 2006 requiring public utilities to get 15 percent of their electricity from renewables by 2025 and earlier this year approved an increased tariff on APS customers to help the utility provide incentives for that power.

Household APS customers can be charged a maximum of $1.32 a month with the tariff. Small businesses have a tariff capped at $48.84, and industrial customers pay no more than $146.53 a month.

"The market certainly is dictating a shift to alternative technologies, but we would expect that in the normal course of events, APS and other utilities would pursue the most efficient blend of technology," said Clint Bolick, director of the Goldwater Institute's litigation arm.

"That is not what the commission did. The commission took a one-size-
fits-all approach, and all of us are going to be paying a tax for this unconstitutional government activity."

Salt River Project is not regulated by the commission but has a similar, self-imposed renewable-energy standard.

APS will collect $34 million from the tariffs this year and $95.7 million in 2012, utility officials said. The Goldwater petition cites higher figures, yet those are what the utility applied for, commission, APS spokesman Damon Gross said.

APS uses the money for power purchases, such as buying electricity from wind farms, and also for rebates the utility gives homeowners for installing solar panels.

Bolick said he was surprised APS didn't challenge the rules.

APS is not named in the petition, and officials declined to comment Friday on the issue. Utility executives have said on several occasions they are likely to exceed the renewable-energy standard's requirements and that it is their policy to use a mix of traditional and renewable energy.

The Goldwater Institute filed on behalf of two men and a company that donate to the institute, and a woman who works for the organization. All are APS customers, according to the petition.

The petitioners are Roy Miller, Thomas Husband, Corpus Communications Inc. and Jennifer Bryson.

All five commissioners are named in the suit, and Attorney General Terry Goddard, whose office confirmed the commission rules last year.

A key point in the petition is a February 2007 letter from Assistant Attorney General Terri Skladany, in which she wrote that the commission's authority to impose such a rule is "vague."
The petition also questions the use of renewable electricity sources.

"To comply with the . . . rules, utilities are forced to create and install new, electrically inefficient structures, implement different technologies than those currently used and change their relationships with their customers," it said.

Commissioner Kris Mayes said she is surprised by the action but confident that the commission was within its authority to enact the rules.

Mayes said APS fully supports the requirement. "I certainly don't expect the utilities to be joining the Goldwater Institute on this lawsuit," she said.

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