Regulators were expected to move forward with a carbon-free requirement for investor-owned utilities. New legislation questions their authority to do so.
A spate of bills making their way through the Republican-controlled Arizona legislature — some on a fast track — could undercut the 100 percent clean energy targets the state’s utility regulators are soon expected to finalize.
The four bills come just as the Arizona Corporation Commission (ACC) has reached the final stretch of a years-long process to develop rules that would hold the state’s largest utilities to a carbon-free electricity mandate by 2050. Regulators voted in November to move forward with the rules, though the commission is required to vote again in the next few months for them to be finalized.
If approved, the regulations would require Arizona’s investor-owned utilities to entirely excise fossil fuels from their portfolios by midcentury while meeting interim targets in the meantime. The state would join numerous peers, including neighboring California and Nevada, working to meet all of their electricity needs with clean resources in the coming decades. Arizona Public Service, the state’s largest utility, has already established a voluntary commitment to the carbon-free target.
But recently introduced legislation could upend that process. A pair of mirror bills (meaning that the same language was introduced in the House and Senate) would disallow the commission from adopting or enforcing any policy regulating the types of generation that utilities in the state must use. Instead, the bills argue that that authority lies with the legislature.
Detractors see the legislation as “essentially a runaround of the commission’s process,” said Ellen Zuckerman, co-director of the utility program at the Southwest Energy Efficiency Project, an advocacy organization that opposes the effort.
Another bill, written by newly elected Republican Representative Jacqueline Parker, would allow the attorney general to investigate any commission order or rule that a legislator alleges is outside the commission’s authority. Parker previously worked as a legal aide to Commissioner Justin Olson, who was the sole “no” in the ACC’s latest vote on the energy rules.
Taken together, the proposals have launched a statewide debate about the commission’s constitutional authority to establish rules on clean energy. Most states that have pursued such goals have done so through legislation. In others, governors have set out policy roadmaps to reach higher percentages of clean energy.
Arizona’s constitution established the ACC. “Many of us call it the fourth branch of government,” state Senator Kirsten Engel, a Democrat and environmental lawyer, told Greentech Media.
But a June state Supreme Court case concerning an embattled water utility appears to have created an opening for the dispute. The court recognized that the legislature and the ACC share authority on issues that concern public health and safety, such as climate change. But where there’s a conflict between the two, the ruling said the legislature’s authority is supreme.
A political battle over authority
Supporters of the proposals view the commission’s moves on energy policy as an overreach.
“They’re not the fourth branch as they would love to be. There are three branches of government. And we happen to be named the first branch of government in our [state] constitution,” Senator David Gowan, a co-sponsor of the Senate legislation, said in a January hearing.
Republican Gov. Doug Ducey has also signaled support for keeping the commission focused on ratemaking rather than energy policy.
Critics of the legislation, however, say the Supreme Court case shouldn’t hold precedent regarding the energy rules, particularly because the legislature has shown no interest in establishing energy policy itself.
“The constitutional issue…is a lot simpler than a lot of people are thinking,” said Sen. Engel, who opposes the legislation. “It’s not like the legislature is coming up with its own clean energy rules or indeed any energy rule at all; it’s just saying, ‘Corporation Commission, you’re preempted from what you’re doing.’”
In a hearing held last week, House Rules attorney Tim Fleming voiced concerns about the House version of the twin bills. Based on his reading of the Supreme Court case, the legislation is “constitutionally doubtful.”
Nonetheless, consideration of the bills may have a chilling effect on the commission’s rulemaking. If the bills pass, they could cause a “showdown” in front of the Supreme Court to determine where the legislature’s authority ends and that of the commission begins, said Adam Stafford, an attorney with the clean energy program at Western Resource Advocates, a nonprofit conservation group that opposes the bills.
The legislation could also deter certain commissioners from advancing energy rulemaking. The commission voted in January to take a neutral stance on the legislation that would limit its power.
“My personal view is that these bills in combination are simply meant to dissuade the ACC from moving forward on any kind of energy policy and are basically an assertion by the legislature that this is within their domain,” said Autumn Johnson, Western Resource Advocates’ Arizona government affairs manager. “The problem is, they don’t actually have a plan to do anything on energy policy.”
The twin bills have already passed the necessary committees in their respective houses.
Arizona’s renewable portfolio standard currently rests at 15 percent of generation by 2025. In 2018, the Energy Information Administration reported renewables, including hydro, accounted for 13 percent of the state’s net generation.