Institute keeps fighting alternative energy rule

Rebuffed by the state's high court, the Goldwater Institute is trying another venue in its effort to void a requirement that utilities generate 15 percent of their power from renewable sources.

Legal papers filed Wednesday in the Court of Appeals by the organization that advocates and litigates on behalf of limited government contend that the Arizona Corporation Commission exceeded its legal authority when it approved the rules. Attorney Clint Bolick wants the judges to void the mandate.

The legal fight is about more than the effect on the utilities: The commission order allows the electric companies to pass on at least some of the cost of generating or purchasing power from these alternative sources to their customers. And Bolick, who technically is suing on behalf of three consumers, contends the commission can't force them to bear that burden.

But Commissioner Kris Mayes said the panel action is not only legal but also financially defensible. She said pushing alternative sources moves the state away from its reliance on fossil fuels for power, fuels whose costs could increase with the enactment of new state or federal regulations to cut greenhouse gas emissions.

The mandate seeks to move Arizona away from its heavy dependence on fossil fuels for electricity. Acceptable alternative sources include solar, wind and geothermal.

These tend to be more expensive than coal-generated electricity, which forms the base of what is used in Arizona. And they are more costly than power from the Palo Verde Nuclear Generating Station, owned partly by Arizona Public Services. In recognition of that, the rules allow utilities to surcharge customers.

Tucson Electric Power, for example, can add up to $2 a month onto what residential customers pay. The figure is up to $39 a month for small and medium-sized businesses and up to $500 for the largest industrial users.

Arizona Public Service can charge residential ratepayers an extra $1.85 a month. Businesses can be charged an additional $68.78 a month, with that figure increasing to $206.33 for the largest customers.

Bolick rejected the argument that the commission is legally entitled to mandate diversification of sources to ensure that Arizona utilities have a reliable and inexpensive source of future power.

He said the commission can take action only after first concluding that a specific company is not meeting its legal obligations to provide such power. More to the point, Bolick said the commission at that point could take action only against that company. "But to simply say in a general sense that all utility companies, regardless of reliability or cost, must generate a particular percentage of energy from renewable sources, that is energy policy," he said, and beyond the commission's authority.

Bolick made identical arguments to the Supreme Court. But the justices, without comment, refused to consider the case.

That decision, however, did not preclude Bolick from asking a lower court to consider the same petition, which is exactly what Wednesday's filing seeks from the Court of Appeals.