Proposed Arizona energy reform addresses forest health, bioenergy

By Erin Voegele | January 31, 2018

On Jan. 30, the Arizona Corporation Commission, the state’s public utilities commission, proposed comprehensive energy reform that includes new clean energy and energy storage targets. It also calls for regulated utilities to procure power from biomass sources.

Arizona’s Energy Modernization Plan calls for 80 percent of Arizona’s electricity to come from clean energy sources by 2050 and sets a goal to deploy 3,000 megawatts of energy storage by 2030. The plan reviews the state’s current energy policies, including the Renewable Energy Standard and Tariff.

“This plan establishes Arizona as a nationwide leader in clean energy,” said Corporation Commission Andy Tobin. “Living in a desert like we do, our goal has to be to address peak demand. Reducing usage in these peak windows will save Arizonans millions of dollars, but we also think we can do it in a way that is clean and maintains grid reliability.”

The policy also aims to promote healthy forests through expanded biomass electricity generation. Specifically, regulated utilities will be jointly charged with procuring 60 megawatts of their electricity from biomass generators as a means of cleaning up nearly 1 million acres of the state’s overgrown forests and increasing use of renewable energy over the next 20 years. Since 2002, the commission said Arizona has seen more than 5.2 million acres burned, 29 lives lost, and more than $162 million spent on wildfires.

“The work we have been able to do with Commissioner Boyd Dunn to highlight the urgent need for action on our forests and the role that utilities can play in making a difference has been outstanding,” said Tobin. “No comprehensive energy plan in this state would be complete without addressing this issue.”

The commission said that biomass facilities offer a proven solution to helping solve the unhealthy forest problem while providing stable-priced, carbon-neutral energy. In order to start the process of rebuilding healthy and sustainable forests in Arizona, the commission said that nearly 50,000 forested acres will have to be thinned each year in order to reach the goal of treating 1 million forested acres in the next 20 years. The treatment of 50 forested acres each he is estimated to generate enough biomass to support 90 megawatts of biomass-derived energy annually.

The commission regulates electric utilities that serve approximately 60 percent of customers in the state. As such, state regulated electric utilities, which deliver more than 100,000 megawatt hours annually, will be required to procure 60 megawatts of their electricity from biomass sources, through either bundled or unbundled renewable energy certificates. The fuel used to generate the biomass-derived energy must come from high-risk fuel and be sourced at least 80 percent from within the state of Arizona. The 60 megawatts of capacity must be in-service by Dec. 31, 2021 and the procurement is to end no sooner than Dec. 31, 2041. The commission said the biomass-derived energy will count towards each utilities’ compliance with the unchanged REST targets and payment for the procurement will be collected through east utilities’ REST surcharge.

A copy of the proposed energy plan is available on the Arizona Corporation Commission website.