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Arizona Corporation Commission headquarters in Phoenix.

The Arizona Corporation Commission on Aug. 18 unanimously approved a rate rider for Arizona Public Service that is designed to allow the utility's commercial and industrial customers to purchase electricity generated from newly built renewable resources while lowering rates for customers not participating in the program.

David Hinkson, an attorney representing APS, said more and more of the utility's commercial and industrial customers are adopting sustainability goals for their own companies. The utility developed the program to accommodate those customers in a way that protects nonparticipating customers from financing those goals.

"There will be no cost shift to customers who are not on this rate rider," Hinkson told the commission at the meeting.

Under the Green Power Partners rate rider, eligible APS customers with a minimum consumption of 1 MW or 500,000 MWh would have three options to expand their renewable-power purchases. Under the first option, commercial and industrial customers would subscribe for at least one year to purchase a specified amount of power from new APS renewable resources that entered service after Jan. 1, 2021.

The second subscription option requires a minimum 20-year commitment to purchase new renewable resources, and gives customers the opportunity to choose an area or specific parcel from which to draw power for their subscription. The resources would be procured through requests for proposals so that the price would be known in advance, Jeff Burke, APS' director of resource planning, said at the meeting. The resources would continue to serve APS territory after the end of the subscription period.

A third option gives customers an opportunity to expedite acquisition of a planned resource or purchase renewable energy from resources that are not included in APS' planning. Participating customers would be responsible for all incremental and capital costs and be required to subscribe to the output of the facility for the duration of a term it would negotiate with the utility [E-01345A-21-0203].

All contracts between APS and eligible customers under the GPP would be subject to commission approval.

ACC staff said it believes the program will accelerate the addition of renewable resources in APS' territory while offering rate benefits to nonparticipating customers through the sale of renewable-energy credits that will be refunded to APS' other customers. The GPP customers would be able to achieve their goals while lowering rates for other ratepayers.

The commission adopted an amendment offered by ACC member Jim O'Connor that requires APS to file annually the results of the GPP by each option, including the total amount of subscriptions, the specific resources dedicated and the average GPP pricing. ACC member Sandra Kennedy commended O'Connor for the amendment and said she hoped such practices could be implemented in other cases "so that we can get a feel for what we're doing and how the companies are achieving their goals."

Burke said the utility has a list of customers that have already expressed interest in the program and that many would be bringing load during the period in which renewables are producing, helping to even out the curve. APS in its planning process is also looking at energy storage to help absorb some excess renewable generation, he said.

A caller representing Microsoft, which operates several data centers in APS territory, told the commission the company had committed to procuring renewable energy sufficient to cover 100 percent of its needs by 2025, and also committed to covering 100 percent of its hour-for-hour energy consumption with carbon-free resources by 2030. The ability to access carbon-free energy to meet those commitments is key in evaluating locations for data centers, she said.

Also at the meeting, the commission approved a certificate of environmental compatibility for Recurrent Energy's 300-MW Papago Solar gen-tie project, a 34.5/500-kV substation and 0.3-mile, 500-kV transmission line that will interconnect the proposed solar-plus-storage facility to the Delany Substation. The project is located approximately 5.5 miles west of Tonopah, Arizona, in Maricopa County [L-21151A-21-0110-00189].

The commission at an Aug. 18 staff meeting voted to host public workshops to discuss a recent report by Ascend Analytics determining that Arizona utility customer bills would increase significantly under carbon-free energy mandates currently undergoing supplemental rulemaking at the commission.

Commission staff filed the report Aug. 11 with comments that it was reviewing the report and would include a discussion in a forthcoming assessment and proposed order. ACC Chair Lea Márquez Peterson on Aug. 12 issued a news release with the headline "Here is What it Will Cost You to Achieve 100% Clean Energy," summarizing the report. Both the report and Márquez Peterson's release have drawn early criticism from Arizona stakeholders in comments filed this week.

"[P]roceedings at the Commission can often be described as marathon-like," Diane Brown, executive director of the Arizona Public Interest Research Group Education Fund, said in a filing offering initial comments critical of the report. The study's release and Márquez Peterson's subsequent "media blitz" within 24 hours "jumped the gun and failed to adhere to commonly accepted practices," she said, adding that her organization expected the report to be discussed after ACC staff had reviewed it.

Brown said her main concerns around the report are that it raises more questions than it answers, wastes time and money and, despite claims to the contrary, does not provide an independent analysis.

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Associate Editor - California Energy Markets

Abigail Sawyer grew up in northwestern New Mexico near two massive coal-fired power plants. She spent many hours gazing out the car window at transmission lines on family road trips across the Southwest and now reports on the region from San Francisco.