Arizona Boosts Renewable Energy Requirements

May 01, 2004

Members of the Arizona Corporation Commission voted recently to continue increasing the percentage of the state's electric power generation that comes from renewable sources.

The move comes three years after Arizona adopted its Environmental Portfolio Standard, which requires utilities to generate a minimum portion of their total retail energy sales from renewable sources. Starting in 2001, that requirement was set to increase each year, to 1.0% in 2005. Affected utilities currently must generate 0.8% of their power from renewables.

With the recent decision, increases will proceed as follows:

  • 1.0% in 2005
  • 1.05% in 2006
  • 1.1% from 2007 to 2012

The Environmental Portfolio Standard specifies technologies such as solar generation, solar water heating, and solar air conditioning. From 2004 through 2012 the portfolio must be 60% solar electric. Other qualifying technologies include wind, landfill gas, and biomass generators.

There is no rate change associated with the recent decision. Since 2001, Arizona consumers and businesses pay a $0.000875 per kWh surcharge for environmentally friendly technologies and renewable energy. Applied to a typical customer with monthly usage of 400 kWh, that surcharge amounts to $0.35 per month, and the commission has ruled that no residential customer can pay more than that amount. In other words, the surcharge is capped at $0.35 a month for residential customers and $13 a month for commercial accounts. Large power consumers who require more than 3 MW at any time during the month are capped at $39 a month.