Arizona regulator proposes 80% clean energy mandate, 3 GW storage target
Arizona’s power sector is at a crossroads. Its investor-owned utilities have already met the state’s 15% renewable energy mandate and utility efficiency goals will sunset by 2020.
At the same time, the state’s utilities are doubling down on natural gas. The integrated resource plan for Arizona Public Service, released last April, would see the company add 5.3 GW of gas generation by 2030, more than doubling its current capacity. Tucson Electric Power’s plan includes nearly 360 MW of new gas by 2032, a 30% increase in gas capacity.
The Arizona Energy Modernization Plan aims to tackle all those issues at once, dramatically increasing the state’s clean energy mandate, reforming it to reflect customer demand patterns, and setting up new programs for efficiency, biomass and electric vehicles.
Under the renewables mandate, labeled the “Clean Peak Standard,” regulators would establish how much electricity from renewables each utility delivers during peak demand hours today. Utilities would then have to “incrementally increase that baseline figure 1.5% per year on average until 2030,” according to Tobin’s plan.
The Clean Peak element of the Modernization Plan was first proposed by the Residential Utility Consumer Office (RUCO), the state consumer advocate, in 2016. Commissioner Tobin quickly endorsed the idea and pushed forward with public hearings and workshops on the proposal before integrating it into his larger plan.
If approved, the plan would make Arizona “the first state to attempt to modernize its renewable portfolio standard to reflect the recent advances in energy technologies,” Lon Huber, a consultant who worked to craft the original RUCO proposal, said. “What this plan is saying is we aren’t going to build our future on natural gas — the backbone of the system over the next 40 to 60 years will not be gas.”
In addition, utilities would also face a target to deploy 3,000 MW of energy storage by 2030, with yearly progress checks as a part of the clean energy mandate.
“In order to reduce curtailment and unlock the peak shaving and grid support capabilities of existing renewable resources,” Tobin wrote, “priority should be given to exploring retrofits of existing renewable energy resources that currently lack energy storage solutions.”
Tobin’s proposal would also direct utility regulators to devise a new efficiency program within 120 days to meet the goals of the clean energy standard. Details would be left up to the rulemaking proceeding, but energy efficiency gains would count toward the utility’s renewable energy goals.
Additionally, the plan would direct utilities to propose EV charging programs for new and existing homes, commercial and industrial customers and on major freeways. It would also direct the procurement of 60 MW of biomass energy to aid in Arizona’s efforts to thin forest underbrush, which worsens wildfires.