Existing Policies

Download all of our briefs on existing policies that we think are important to AZ and the greater Southwest.

President Obama's Climate Change Action Plan Brief Sheet

Published February 2014
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Published February 2014

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The essentials

  • In June, 2013 President Obama released his Climate Action Plan.
  • The Plan has three broad categories.
    • First, reducing U.S. carbon emissions.  The President’s plan sets goals to reduce emissions from existing power plants, modernize the U.S. transportation sector, increase the U.S. clean energy portfolio, and increase energy efficiency in American homes and businesses.
    • Second, preparing the U.S. for the impacts of climate change. This is done by supporting climate-resilient investments, responding to major weather events, creating sustainable and resilient hospitals, maintaining agriculture productivity, and providing the tools for climate resilience.
    • Finally, engaging the world’s major economies to advance key climate priorities and in galvanizing global action through international climate negotiations.
  • What does this mean for Arizona?
    • It is hard to predict the full ramifications of the President’s climate action plan for any given state.  Arizona’s utilities and energy regulators will have to plan based on new federal regulations, such as the EPA’s current proposed caps on carbon emissions for new power plants.  Additionally, Arizona could see more federal funds become available to support sustainable agriculture or solar power.  As of now, the exact cost-benefit may be impossible to gauge.

The era of small hydro? The Federal Hydropower Regulatory Efficiency Act of 2013

Published November 2013
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The essentials

  • On August 9, 2013, President Obama signed into law the Hydropower Regulatory Efficiency Act of 2013, which as the name indicates, seeks to reduce the regulatory burden associated with licensing certain small hydroelectric projects by:
    • exempting certain conduit hydropower facilities from the licensing requirements of the Federal Power Act (FPA);
    • amending subsection (d) of Section 405 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2705) to define “small hydroelectric power projects” as having an installed capacity that does not exceed 10,000 Kilowatts (prior to the amendment, “small hydroelectric power projects” were defined as having an installed capacity that does not exceed 5,000 Kilowatts);
    • authorizing the Federal Energy Regulatory Commission (FERC) to extend the term of preliminary permits once for not more than 2 additional years beyond the 3 years previously allowed under section 5 of the FPA; and
    • directing FERC to investigate the feasibility of a 2-year licensing process for hydro power development at non-powered dams and closed-loop pump storage projects.

APS's Proposal to Change Net-Metering

Published October 2013
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updated December 2013

The essentials

  • Rooftop solar installations have exponentially increased in recent years, in Arizona and nationally. With the continued increase penetration of distributed generation from rooftop solar installations, utilities have begun re-evaluating the price structures they use to compensate owners for the electricity their installations feed into the grid.
  • Currently, Arizona Public Service Company’s (APS) net-metering program compensates a solar rooftop owner at retail rates for the excess electricity the solar rooftop installation exports to the grid.
  • APS recently proposed to reduce compensation for electricity put onto the grid by solar rooftop installations, reducing the value that rooftop installations provide to their owners.
  • APS argues that the current net-metering rates effectively subsidize rooftop solar owners and unfairly shift costs from solar rooftop owners to non-solar rooftop owners. Rooftop solar installations also decrease residential electricity demand, thereby decreasing APS’s revenue.
  • The solar industry opposes the proposal because they argue the current plan fairly compensates for the value solar provides to the system, and will stall the development of the industry. Free market proponents also argue that the policy hurts competition and endorses the regulated monopoly utility model.
  • On October 1, 2013, the Arizona Corporation Commission (ACC) staff rejected both of APS’s suggestions for net-metering changes. Instead, they recommended addressing the distributed generation concerns during the next APS rate-case.
  • On November 14, 2013, the ACC voted to implement a $0.70/kW fee for customers with rooftop solar installations who participate in their net metering program. The fee equals roughly $5/month for a typical residential installation. The ACC agreed to review the net metering policy in more depth during the next APS rate case.

An Introduction to Restructuring of Electricity Markets

Published October 2013
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The essentials

  • The electric utility industry has in the past typically been a monopoly with a few utilities in a particular geographical area that generate, transmit and distribute electricity.
  • Recently, the Arizona Corporation Commission (ACC) had opened up discussions to decide if Arizona should restructure the electricity market and allow competition (also referred to as retail competition or deregulation) or maintain its current regulated structure.
  • Restructuring the Arizona electricity market would have allowed consumers to choose among a variety of energy suppliers in a competitive market based on prices and services.
  • The stages of generation of power, transmission and distribution would be independently operated by competing power companies.
  • On September 11, 2013, the ACC voted 4-1 to end the discussion on retail electric competition in Arizona, reasoning that there were several constitutional hurdles.
  • However, the ACC kept open the potential for discussion about other changes to Arizona electricity markets.
  • Note: this brief uses the terms restructuring and deregulating interchangeably.

The Energy Savings and Industrial Competitiveness Act (Shaheen-Portman Bill)

Published September 2013
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The essentials

  • The Energy Savings and Industrial Competitiveness (ESIC) Act (the Shaheen-Portman bill) was intended to promote energy efficiency measures and technologies in residential, commercial and industrial sectors.
  • It was a bipartisan energy efficiency bill, sponsored by Senators Jeanne Shaheen (Democrat-New Hampshire) and Rob Portman (Republican-Ohio), in the 2013 session. Senators Shaheen and Portman revived the bill in 2014 and introduced a more targeted bill in 2015.
  • The bill required states, Indian tribes and local governments to adopt energy efficiency codes for residential and commercial buildings. Training and assessment centers would be set up to promote R&D and application of energy efficient technologies in buildings.
  • It included provisions promoting sustainable practices in industrial processes and increasing industry partnerships with National Laboratories and energy service/technology providers.
  • The 2015 bill, the Energy Efficiency Improvement Act of 2015, included a provision focused on "aligning the interests of commercial building owners and their tenants to reduce energy consumption." The EEIA became an amendment to a bill approving the Keystone XL pipeline.
  • Both the original 2013-2014 Shaheen-Portman bill and the 2015 amendment failed in their respective sessions.

Renewable Energy Credits in Arizona

Published July 2013
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The essentials

  • In the U.S., when electricity is generated by a renewable energy source, two products are created: electricity and a Renewable Energy Credit (REC).
  • In Arizona, a Renewable Energy Credit (REC) represents the non-power attributes of a kilowatt hour of electricity from renewable energy. These attributes include renewable benefits (such as hedging against fossil fuel price increases) and environmental benefits (such as avoided pollutants).
  • The Arizona Corporation Commission requires regulated utilities to demonstrate their compliance with the Renewable Energy Standard and Tariff (REST) by obtaining RECs.
  • RECs can be bundled or unbundled, and traded, bought or sold in markets such as the Western Renewable Energy Generation Information System (WREGIS).

 

 

 

Arizona's Solar Rights Law

Published July 2013
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The essentials

  • Arizona law bars Homeowners’ Associations (HOAs) from “effectively prohibiting” the installation or use of a solar energy device (SED) within their jurisdiction.
  • Some “reasonable” restrictions on the placement of solar energy devices are allowed, but they must not “adversely affect” cost and efficiency. Whether a restriction or reasonable or adversely affects cost and efficiency is decided on a case-by-case in the courts.
  • Arizona is one of 22 states with solar rights laws. Arizona has a relatively stringent policy supporting homeowner’s solar rights, although some states are more stringent and much more explicit about the types of restrictions HOAs can impose on homeowners.

The Federal Wind Energy Production Tax Credit: How will it affect the wind industry's development in the coming years?

Published June 2013
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The essentials

  • In January of 2013, U.S. Congress approved a one year extension of the Production Tax Credit (PTC) for Wind Power in the American Taxpayer Relief Act, as a part of the “fiscal cliff” budget negotiations. The Wind Power PTC currently expires on January 1, 2014.
  • The PTC provides temporary support for the development of wind power by providing a 2.2cents/kWh subsidy for wind power produced over the wind farm’s first 10 years of operation, starting when construction begins.
  • Wind facility construction must begin before January 1, 2014 in order to qualify. Residential wind power production is exempt from the tax credit.
  • Of all new generating capacity installed from 2007-2011, 35% was wind power.  In 2012, the percentage grew to 44%. (AWEA).

Solar Phoenix 1 & 2: Solar Rooftop Financing

Published May 2013
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The essentials

  • Solar Phoenix 1 & 2 are a series of city-sponsored residential solar financing programs.
  • The Solar Phoenix program is a federally-recognized public-private partnership that allows Phoenix home owners to finance solar panels through leasing at low or no upfront costs.
  • The National Bank of Arizona funded both Solar Phoenix 1 & 2 with $25 million to initiate the program. The City of Phoenix partnered with Solar City for the first iteration and currently partners with Paramount Solar to provide panels, installation services, and maintenance.
  • The leased solar panels are expected to generate sixty to eighty percent of a residence’s power demand.

APS & TEP 2013 REST Distributed Generation Incentives

Published February 2013
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The essentials

  • On January 23, 2013, the newly-elected Arizona Corporation Commission (ACC) unanimously voted to end all photovoltaic (PV) rooftop incentives for commercial/non-residential entities for both APS and TEP.
  • They also voted unanimously to reduce APS’s combined residential photovoltaic (PV) rooftop and solar water heater (SWH) incentives to $4.48 million. TEP’s combined residential PV rooftop and SWH incentives budget was set at $744,486. Commissioner Pierce stated 2013 will likely be the last year that regulated utilities will offer residential incentives.
  • The ACC stated incentives are no longer necessary to continue the commercial solar distributed generation markets. The Solar Energy Industries Association predicts a serious market contraction in the wake of the Commission’s decision.