Big changes would be in store for Arizona’s energy landscape under two proposals that have emerged over the last two months.
First to appear on the scene was a plan by Andy Tobin, a member of the commission that regulates the state’s utilities. It would set a goal for 80 percent of utilities' energy portfolios to come from "zero net emissions" sources, including nuclear, by 2050. The plan includes goals for large-scale energy storage, biomass energy, energy efficiency and electric vehicle infrastructure.
More ambitious is a proposed constitutional amendment to require that by 2030, 50 percent of the energy sold by the state’s regulated utilities -- a category that doesn’t include Salt River Project -- come from renewable sources, not including nuclear.
Current state rules adopted in 2006 set a goal for utilities to get 15 percent of their power from renewables, not including nuclear power, by 2025.
Tobin’s plan would need to be broken down into rules passed by the Arizona Corporation Commission’s elected members while the ballot measure would need 225,963 signatures to get on the November ballot. Among the measure’s backers is NextGen America, a group associated with billionaire Tom Steyer that is pushing increases in renewable energy standards in Michigan and Nevada as well.
Renewable energy advocates have cheered the plans and say both are achievable, or very challenging but achievable, considering current trends in renewable pricing and shifts already happening with energy technology and management.
But how would they actually be accomplished? Here are some of the changes Arizona might expect to see:
More utility-scale wind and solar farms: Smaller renewable energy projects are more costly and labor-intensive, so it’s most likely that utilities would go for large-scale infrastructure if they were required to ramp up their renewable energy resources, said Karin Wadsack, a project director at Northern Arizona University who works on utility-scale renewable energy grid integration.
More storage: Technologies like chemical batteries help store the power generated by wind turbines or solar panels, saving it for times when power is needed but those sources aren’t generating. Other options for storage include a tiered reservoir where water is pumped into the upper reservoir when renewable power is plentiful, then run through turbines into the lower reservoir to generate electricity during high-demand times, Wadsack said.
Broader networks: Managing renewables that are more variable and can’t simply be turned on and off, would require a shift to more regionalized systems that allow utilities to buy, sell and transfer energy across a greater area and on a shorter time scale than they are doing now, said Amanda Ormond, a clean energy policy consultant. A setup where one entity manages the power flows for many utilities across a region is already common in other parts of the country and Ormond estimated Arizona is five to 10 years away from something similar. Instead of managing power in hour-long increments, the next step for utilities to bring on more wind and solar is to operate in five-minute increments, Wadsack said.
“It’s a matter of software and capability, it’s not something that's technically infeasible,” she said.
Electric vehicles: If managed well, electric vehicles can be a useful way to manage energy demand because people can charge them during the day when there is lots of excess solar on the system, Ormond said. That means they can be used as energy storage assets on the electric grid, charging when electricity is cheap and saving the power for later, said Kris Mayes, a professor of practice in utility law and energy policy at Arizona State University and a former member of the Arizona Corporation Commission. Electric vehicles can present challenges as well though because it will increase the amount of power a neighborhood uses, necessitating an increase in substations, Mayes said.
More transmission: Arizonans would see moderate buildout in high-voltage transmission to accommodate an increase in utility-scale renewable energy, Mayes said. An upgrade to the distribution system would also be needed to accommodate increases in rooftop solar installations and electric vehicles, she said.
Energy use management: Utilities like APS have already started encouraging consumers to shift their electricity use to off-peak hours and avoid spiking their energy use with things like peak energy rates and demand charges. Ormond said the next step is the widespread distribution of technology that allows people to easily manage their energy use using things like smartphones and automated, programmable devices and appliances.
“Controlling your home's energy use will become commonplace,” she said. “It sounds futuristic but if think about cars driving around without drivers, it’s all there. It’s just about getting it into the hands of customers.”
In an email to state legislators last month, an APS state and local affairs representative warned that the 50-percent-by-2030 ballot initiative would raise customers’ electricity rates by at least $500 per year.
“Limited-income and disadvantaged communities already spend an outsized proportion of their income on energy costs, and the initiative will further intensify this inequity,” APS’ Chad Guzman wrote.
But Ormond said she doesn’t see a rise in consumers’ energy bills playing out. She pointed to recent bids put out by renewable energy companies that commit to providing wind and solar energy, plus storage, for equal to or less than natural gas and other fossil fuels.
“Wind and solar energy are now being procured for less than new natural gas and less than a lot of existing fossil fuels so the economics have now flipped and the clean stuff is now cheaper than the dirty fossil stuff. That is an incredible paradigm shift,” Ormond said.
Even better answers to the cost question should come from an audit and cost analysis Tobin requested be completed by the state’s Residential Consumer Utility Office. He asked the office to compare his Arizona Energy Modernization plan with utilities’ current plans for energy resources and the renewable energy ballot initiative.
APS WEIGHS IN
APS struck a supportive tone on Tobin’s plan, calling it a “bold, challenging vision for Arizona’s energy future.” It lauded the plan’s inclusion of nuclear energy as a source for fulfilling its goals. The company had nothing good to say about the ballot measure proposal.
“The ballot initiative by California billionaire Tom Steyer is irresponsible and bad for customers,” the utility said in a statement.
APS’s plan for future resources development, filed with regulators last year, provides a window into what the future will be like without a change in the state’s renewable standards. The utility’s plan calls for the addition of thousands of megawatts of new natural gas resources but no new utility-scale solar or wind projects for at least the next decade.
The new renewable energy proposals, meanwhile, seem to be going in the opposite direction, Ormond said.