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Lawsuit challenges AZ energy mandates

November 8, 2014

Arizona Corporation Commission rules requiring electric utilities it regulates to get a set percentage of their power from renewable sources face a court challenge.

A special-action lawsuit filed by the Phoenix-based Goldwater Institute alleges the commission exceeded its authority under the Arizona Constitution, intruded on the Legislature’s policymaking role in state government and interfered with the utilities’ relationships with their customers.

Approved in 2006 by the commission, the renewable energy standards” generally require that utilities get 15 percent of their electricity from renewable sources by 2025, with annual increases from the current mandate of roughly 1 percent.

Commissioners have said the rules will benefit the state’s economic development, the environment and, by reducing reliance on energy from other countries, national security.

The rules allow utilities to use surcharges to recover costs of the program but caps monthly fees at $1.05 for residential customers and $39 for most other customers. For larger users such as mines and manufacturers, the cap would be $117.

Along with solar and wind technology, the renewable sources covered by the rules include biomass, geothermal and certain types of hydro projects.

The lawsuit filed late Thursday asks the state Supreme Court to declare the rules invalid and to prohibit the commission from enforcing the rules or related energy surcharges or environmental standards.

Regardless of whether the rules constitute sound public policy, (the commission) has no legitimate power over renewable energy policy, which is a legislative determination,” the lawsuit stated.

The rules affect ratepayers, said institute attorney Clint Bolick, citing a surcharge approved last month by the commission for Arizona Public Service Co., At a time when Arizonans are struggling to make ends meet, it’s important to prevent government from overstepping its bounds in ways that add costs to every family’s budget,” Bolick said.

Commissioner Kris Mayes said Friday the rules protect both utility consumers and the environment and the commission will vigorously defend them.

The mandate is in place and utilities are using the money to put solar panels on rooftops and build large-scale renewable energy plants and we expect it to stay in place,” Mayes said.



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