Arizona regulator warns that APS, Tucson Electric renewable overbuild could cost customers
In May, the ACC voted against a proposal that would have set a 100% clean energy target for the state by 2050 and is now considering a longer-term 2070 deadline for the clean energy benchmark. A decision on that plan could come as soon as this month.
The state’s investor-owned utilities, however, have their own plans. Arizona Public Service (APS) says it will achieve 100% clean energy by 2050 and Tucson Electric Power (TEP) says it will get 70% of its power from renewable sources by 2035.
However, Peterson’s letter warns that utility investments in renewables “will likely represent the next iteration of utility overbuilding.” Utilities, she said, built too much coal in the 1970s, nuclear capacity in the 1980s and, most recently, natural gas plants in the early 2000s. With a reminder that ACC’s primary purpose in reviewing IRPs “is to protect ratepayers from the adverse effects of utility overbuilding,” Peterson said commissioners should be vigilant in the 2019-2021 planning cycle.
“As it is likely that utilities will adapt previous overbuilding practices to align with the prevailing public policy objectives of our time, rather than cease such overbuilding practices altogether, the utilities and financially interested stakeholders that stand to benefit from overbuilding may seek to take advantage of the 2019-2021 planning cycle as an opportunity to overbuild renewables in the name of achieving a ‘cleaner energy mix’ or the ‘transition’ to a ‘clean energy economy,'” she wrote.
APS and TEP did not respond to requests for comment on Peterson’s letter before press time.
An analysis from Ascend Analytics released in August estimated that a 2050 clean energy mandate in Arizona could raise utility bills by about $60 a month, although it acknowledged that new technologies could lower the overall costs.