Arizona Bill threatens thousands of renewable energy jobs, firms warn

Arizona's Capitol, where House Bill 2701 is currently being considered. Photo: Jeff Dean

Arizona is threatening one of its fastest growing industries by allowing utilities to count existing nuclear and hydropower projects towards state renewable energy targets.

That was the warning yesterday from the solar power industry, which said a House Bill seeking to reform the state’s Renewable Energy Standard could put Arizona’s entire renewable energy industry into jeopardy.

House Bill 2701, as it is called, proposes to allow utilities to use existing nuclear power plants towards the Standard’s requirements for utilities to source power from renewable sources.

The Bill, which cleared the House Government Reform Committee yesterday, also seeks to eliminate utility distributed generation requirements and interim targets before 2025.

SolarCity, Kyocera Solar, Inc., and Suntech Power Holdings came out fighting yesterday, warning along with other solar energy providers that the Bill is likely to “halt all new renewable energy development in the state”.

Lyndon Rive, CEO of Solar City, which is based in California but also has offices in Phoenix, Arizona, said: “Allowing existing nuclear and hydroelectric power facilities to satisfy Arizona utilities’ renewable energy requirements would freeze the development of renewable energy projects indefinitely and put Arizona’s entire renewable energy industry at serious risk. If HB 2701 is passed into law, it could shut down many solar companies in the state.”

Representative Debbie Lesko (R-Glendale), who is chief sponsor of the Bill, argues that it allows utilities to make use of future technology, rather than being forced to use today’s renewable energy technology.

“New energy technologies are being rolled out at a fevered pace,” said Rep. Lesko. “Our utility companies should be able to harness these clean, carbon-free innovations as they become available, instead of being locked into what’s being used today.”

Standard

Since 2006, utilities in Arizona have been required to gradually increase the amount of energy they source from renewable projects until they reach 15% in 2025.

If HB 2701 is passed into law, it could shut down many solar companies in the state” - Lyndon Rive, SolarCity

The state’s Renewable Energy Standard also requires that a proportion of this should come from small-scale, distributed projects, rising to 30% in 2012.

HB 2701 seeks to remove the incremental increase in renewable energy obligation, requiring utilities selling at least 750,000 energy hours as of January 2011 to reach the 15% target by 2025 without interim requirements.

A utility that becomes large enough to qualify for the threshold would have 15 years to meet the 15% renewable energy requirement.

The Bill defines “renewable energy” as including renewable and non-carbon producing energy sources, “including solar, wind, geothermal, biomass, hydroelectric, agricultural waste, landfill gas and nuclear sources”.

Surprised

Solar companies have been surprised at the Bill’s introduction, since the state government has worked “extensively” to attract renewable energy companies to the state.

Putting solar projects at risk and hitting small electrical businesses hard, the Bill would also cost Arizona billions in federal grant funding available to spur growth in renewable energy, they believe.

As well as the direct threat to utilities being forced to source renewable energy, the companies said HB 2701 also proposes a “double regulation” of solar projects by adding Arizona State Legislature regulation on top of the existing Arizona Corporation Commission set up.

The measures within the Bill threaten “thousands of existing and future jobs” as the state recovers from the recession, the companies warned.

Steve Chadima, vice president of external affairs for Suntech Power Holdings, one of the largest solar module manufacturers in the world, said that if the Bill was passed, it would make his company reconsider establishing a factory in Arizona.

The company had selected Goodyear, Arizona, for its production plant, but said the Bill would see the project switching to another state.

“Major setback”

Kyocera has its US Solar headquarters in Arizona, but senior vice president Tom Dyer warned that the HB 2701 would be a “major setback”.

Mr Dyer said: “It undermines our effort and progress made to create green jobs, and would be a major setback to Arizona’s reputation as a solar industry leader. Quite simply, this bill does not support growing the local economy, nor does it assist in protecting the environment.”

While the House Bill seeks to water down the state’s renewable energy requirements in order to soften the potential financial blow to electricity consumers, economic development expert RL Brown said it was “surprising” that the Bill was also seeking more governmental regulation for solar companies.

“Make no mistake, this bill massively grows government influence on private business,” said Mr Brown, CEO of RL Brown Reports in Phoenix. “It is surprising that this small-government inclined Legislature is calling for more, not less, governmental regulation.”