Pending Policies

These are proposed policies that we think are important to follow. You can download all of our “Pending Policies” briefs here.

A brief sheet on UNS Electric's application for rate design change

Published June 2016
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Published June 2016

(Download full brief here)

The essentials:

  • UNS Electric, Inc., is a small utility serving approximately 93,000 ratepayers in Santa Cruz and Mohave Counties in Arizona.
  • The utility faces challenges in paying for fixed assets with a declining demand and a business model built on increasing energy consumption.
  • As a remedy, UNS is applying for a rate change focused on increasing the cost of electricity for small volume electricity users, especially those that may benefit from net-metering policies for distributed (primarily solar) generation.
  • Although the utility is small, the rate case is being closely watched, as it may be precedent setting for other utilities.

A Brief on the Draft Amendment to Change Arizona's Energy Efficiency Resource Standard to a Goal

Published November 2014
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The essentials

  • The Arizona Energy Efficiency Resource Standard (EERS) requires regulated electric utilities with an annual revenue of more than $5 million to achieve a cumulative energy savings of 22 percent by 2020, based on historical customer demand. The incremental savings began in 2011 at 1.25% of the previous year’s retail sales. Regulated gas utilities have a similar requirement of 6 percent cumulative energy savings by 2020, also based on historical consumer demand.
  • On November 4th, 2014, the Arizona Corporation Commission (ACC) staff filed a draft amendment to the state EERS that would have the effect of rescinding the mandatory Standard. Instead, gas and electric utilities would be allowed to determine their own custom energy efficiency goals each year, on the basis of cost-effectiveness, during their bi-annual integrated resource planning (IRP) process. The IRP is non-binding.
  • The public has until Tuesday, November 18th, 2014 to submit comments to the ACC regarding the proposal. (Comment submission information can be found at the end of this document).
  • Currently, the Societal Cost Test is used to verify all energy efficiency programs under the EERS. The amended goal would allow the Commission to use three other tests to determine cost effectiveness:

o   The Participant Cost Test

o   The Ratepayer Impact Cost Test

o   The Utility Cost Test

 

 

The ACC seeks an alternative to RECs: APS's Track and Record brief Part II

Published April 2014
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Published April 2014

(download full brief)

The essentials

  • Arizona's Renewable Energy Standard & Tariff (REST) requires that 4.5% of electricity comes from distributed generation (DG) systems such as rooftop solar.
  • Regulated utilities demonstrate compliance with the REST by collecting Renewable Energy Credits (RECs) from their customers who have installed DG systems, in exchange for upfront cash incentives meant to help customers finance the installation of the DG system.
  • With the rising demand for DG installations since the start of the REST, the Arizona Corporation Commission agreed to significantly reduce upfront incentives. As a result, the regulated electric utilities lost their guaranteed source of RECs that are needed to demonstrate compliance.
  • During June 2012, Arizona Public Service (APS), Tucson Electric, & Power (TEP), and UNS Electric (UNS) proposed a Track and Record option that would allow utilities to demonstrate compliance by tracking and counting towards compliance any new DG connection added within each service territory, independent of REC ownership.
  • On February 24, 2014, the ACC issued an order indicating that good cause exists for authorizing a one-year waiver to the regulated utilities' (APS, TEP, and UNS) 4.5% DG requirement. The purpose of this waiver is to allow the ACC time to develop a new method to track utility compliance with REST.

Crowdfunding and Renewable Energy: Could it Revolutionize Large-Scale Renewable Project Financing?

Published March 2014
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(download full brief)

The essentials

  • Crowdfunding presents a new model for public investment in large-scale renewable projects.
  • Crowdfunding would allow businesses access to an estimated $2 trillion in capital from the general public. It has been successfully applied to financing utility- and commercial-scale solar projects by Mosaic, a California-based start-up company.
  • Rewards-based crowdfunding (as opposed to “donation-based” crowdfunding) is the funding of a company or project by selling small amounts of equity to many investors with an expectation of return on investment.
  • At this time, only residents of New York and California can participate in crowdfunding investments.  However, the 2012 JOBS Act obligates the SEC to issue regulations allowing start-up companies to raise up to $1 million in capital via crowdfunding from the general public across the country.
  • The new crowdfunding regulations will likely be issued in the third quarter of 2014.
  • When crowdfunding regulations are issued, it will allow the general public to invest small amounts in renewable energy with a reasonable expectation of return on investment.

Property Assessed Clean Energy (PACE): What it is, and whether it can be implemented in Arizona

Published February 2014
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The essentials

(download full brief here)

  • Property Assessed Clean Energy (PACE) offers a path for building owners to fund energy efficiency upgrades and renewable energy projects.
  • Under the PACE framework, a local government provides the up-front capital for a building owner to install an energy efficiency project and/or a renewable energy system on their building. The building owner repays the capital over the course of 20 years through a property assessment tax.
  • PACE is being successfully used in 12 states and Washington, D.C. for commercial properties. Many states also allow PACE financing for residential properties, but most residential financing programs have been shelved for now while the Federal Housing Finance Agency (FHFA) issues rules related to lien seniority for mortgaged homes.
  • Developing a PACE program in Arizona would require passage of PACE-enabling legislation. PACE-enabling bills have been introduced in past legislative session, but have not been signed into law.
  • During the current 2014 session, State Reps. Orr (R) and Sherwood (D) are sponsoring PACE-enabling bill HB 2206.

Community, virtual and aggregate net metering, oh my!

Published January 2014
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The essentials

  • Basic net metering requires an agreement between an electrical utility and an individual customer. That customer must have a single meter that is connected to a single, on-site renewable energy system.
  • Under current net metering rules, Arizona allows community net metering but not aggregated and virtual net metering.
  • Several states have revised their net metering policies to allow a broader swath of utility customers to participate in net metering. These customers include municipalities with multiple buildings, tenants in multi-family buildings and stores in shopping malls.

NGS Part III: EPA's Proposed Regulations for the Navajo Generating Station update

Published September 2013
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(download full brief)

The essentials

  • A comparison of the EPA’s Best Available Retrofit Technology rule requiring SCR against the Technical Work Group ‘s (TWG) two proposals.

Master Limited Partnerships

Published August 2013
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The essentials

  • A Master Limited Partnership (MLP) is a business structure that is taxed as a partnership but has the ability to issue stock ownership interests much like a corporation.
  • Federal legislation has boosted market capitalization investments in MLPs from $2 billion in 1994 to ~$480 billion in 2013.
  • The MLP Parity Act (introduced to the House and Senate on April 24, 2013) proposes to expand MLP eligibility to the renewable energy.

Energy Imbalance Markets Part II: A review of the EIM Proposal for the Western Interconnection and potential impacts

Published July 2013
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The essentials

  • The Public Utility Commission Energy Imbalance Market has proposed an EIM for the Western Interconnection 1.
  • The National Renewable Energy Laboratory Draft Report on EIM Analysis shows an annual societal operating benefit of between $146 million and $300 million for the Western Interconnection EIM with full participation.
  • Critics of the plan cite concerns of cost-shifting, jurisdictional issues for local governments to enforce penalties, and questions of reliability.

The SunZia Project and Rapid Response Team for Transmission brief

Published June 2013
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(download full brief)

The essentials

  • The SunZia high-voltage transmission line project will span 500 miles over a portion of public land managed by the Bureau of Land Management (BLM), originating in NM and terminating in AZ.
  • It is proposed by the SunZia Transmission LLC that the 500 kV line will provide increased transmission capacity for renewable energy projects.
  • The Bureau of Land Management (BLM) identified a preferred route for the SunZia line that partly passes close to the U.S. military’s White Sands Missile Range (WSMR).
  • U.S. military officials oppose this preferred route and consider it a threat to national security.
  • In October 2011, the Obama Administration designated the SunZia Project for accelerated permitting and construction through the Rapid Response Team for Transmission (RRTT) to encourage greater coordination between federal agencies.