Arizona Appeals Court Upholds Renewable Energy Regulations

The Arizona Court of Appeals recently upheld a lower court decision rejecting a challenge by The Goldwater Institute over the Arizona Corporation Commission requirement that Arizona utilities source 15% of their electricity from alternative sources, such as solar power and wind power, by 2025.

This was the fourth legal challenge by the Institute’s watchdog group, the Scharf-Norton Center for Constitutional Litigation, to the renewable energy regulations established by the ACC in 2006.  The lawsuit, Miller v. Arizona Corporation Commission, made the argument that the rules exceed the ACC’s limited constitutional and statutory authority, violate separation of powers, and impermissibly interfere with the relationship of all utilities and their customers.

The Center’s main arguments were that (1) the ACC’s rules were an un-constitutional power grab as the ACC “has jurisdiction over the quality of service and rates charged by public service utilities” but that the ACC does not have the authority to set energy policy, which is the legislature’s role, and does not have the authority to require utilities to charge more and (2) as part of the mandate to convert to clean energy, the ACC required electricity companies to impose a surcharge on each of their customers where, the Center argued, consumers would have to pay millions of dollars in tariffs to help their power providers offset the costs of implementing solar and other renewables requirements.

The Court of Appeals’ opinion was that the elected commissioners do have the authority to make such rules because they relate to power rates. “In formulating the [renewable energy] rules, the commission considered the price fluctuations, transportation disruptions, and shortages associated with conventional fuel sources, noting that renewable resources are not subject to these same vagaries,” the judges wrote.

The Phoenix-based Goldwater Institute is an independent agency supported by people “who are committed to expanding free enterprise and liberty.” The Goldwater Institute was founded in 1988 with the blessing of five-time U.S. Senator and 1964 Presidential candidate Barry Goldwater (R-AZ). They are expected to appeal the decision to the Arizona Supreme Court by the May 9th deadline.

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