Renewable energy gets a plug - East Valley Tribune: Business

Renewable energy gets a plug

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Posted: Friday, June 3, 2005 6:28 am | Updated: 9:22 am, Fri Oct 7, 2011.

State utility regulators took the first steps Thursday to mandate the use of more expensive renewable energy, comparing it to requiring seat belts in cars and forcing children to eat their broccoli.

The plan before the Arizona Corporation Commission would require that 5 percent of all power sold by investorowned utilities in the state by 2015 come from sources such as wind, solar, biomass and geothermal. That would increase to percent by 2025.

Commissioners took testimony and discussed specifics at Thursday’s hearing. A formal vote is not scheduled until July, but four of the five commissioners already have said they support the concept.

And Kris Mayes, one of those commissioners, actually wants a 20 percent requirement by 2025.

Only Mike Gleason objects to the mandate.

Gleason said everyone concedes these power sources are more expensive than the coal, natural gas and nuclear, which provide most of the state’s electricity. The problem with this proposal, he said, is the utilities will pass those higher costs on to ratepayers.

That cost could reach $2 per month for residential customers and $75 for businesses; the largest commercial customers could see increases of up to $220 per month.

Gleason pegged the cost of solar in excess of 30 cents a kilowatt hour. And even windgenerated power, Gleason said, costs more than 8 cents — all more expensive than the existing sources.

Over the next two decades, he said, that amounts to a $5 billion subsidy.

But Valerie Rauluk, who represents the Greater Tucson Coalition for Solar Energy, argued that solar "delivers greater value.’’

For example, she said, just the economic development in Arizona is worth a nickel per kilowatt hour. There also are costs and losses of transmitting power from remote, coalfired power plants.

And, she said, there are things like medical costs related to asthma attacks in people affected by air pollution.

Sean Seitz, president of the Arizona Solar Industry Association, said the mandate helps build an industry "that can provide this market with cleaner, more cost-effective resources down the road.’’

The proposal has the endorsement of utilities, which now must produce just 1.1 percent of their power from renewable sources by 2007. But Ed Fox, a vice president of Arizona Public Service Co., the state’s largest electric company, acknowledged that support is because his company can recover its costs: The current mandate limits passthrough to residential customers at 35 cents per month, with a $13 cap on most businesses.

The idea of forcing customers to pay more was not lost on regulators. But Commissioner Marc Spitzer said sometimes these mandates are necessary, using the example of broccoli.

"No kids really like it,’’ he said. But he said the role as regulators "is to balance these interests and see that the broccoli is eaten and (the children) grow up healthy.’’

Commissioner Bill Mundell said there is a role for government in promoting the public interest.

He pointed out that Congress gave away land to railroads to encourage their expansion in the West. And more recently the federal government required auto manufacturers "to install safety devices we now take for granted,’’ such as seat belts and air bags.

And Mayes said the idea of promoting solar in particular plays to the state’s strength and resources.

"The states that create good jobs and a flourishing economy are the ones that harness their G od-given resources,’’ she said. That’s why Texas pushes oil — and Arizona should push solar.

Mayes in particular likes the idea of "distributed generation,’’ where customers put solar panels on their roofs and are able to essentially sell what they don’t need to utility companies. That, she said, eventually will save money for these customers who are willing to make the up-front investments.

She noted that the plan also requires utilities to offer rebates for things such as solar panels that could cover half the cost.

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