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Opinion By Richard Ducote: All Should Share Cost of Energy Initiative

Posted on: Thursday, 18 August 2005, 09:00 CDT

Burning coal at the main Tucson Electric Power plant in the city has saved the utility's customers millions in rate payments over 20 years.

But saving money wasn't the reason coal was added to the fuel mix at the H. Wilson Sundt Generating Station on East Irvington Road.

The utility was ordered to find an alternative fuel after the oil crunch of the 1970s. Natural gas was then considered in short supply, so coal was chosen.

In recent years, a rash of plants were built to burn natural gas in anticipation of a deregulated energy market that failed to develop as imagined. Some of those plants now stand vacant, and there are concerns about long-term gas supplies.

Markets shift like the wind and the price and availability of commodities are notoriously unpredictable. Three years ago, few would have guessed that today we would have oil prices north of $60 a barrel or copper prices above $1.70 a pound.

But uncertainty about future developments does not seem to dissuade the Arizona Corporation Commission. A few days ago, four of the ACC's five members endorsed very high standards for alternative power generation to be met in 20 years.

The mandate would require utilities under ACC regulation to generate 15 percent of their annual energy by 2025 using renewable sources such as solar, wind or biomass.

This is a huge expansion of the current Environmental Portfolio Standard established in 2001. With existing surcharges of about $20 million a year, utilities are trying to meet the goal of generating 1.1 percent of power from renewable energy sources by 2007.

It has been an uphill struggle. TEP may be in the lead among the state's utilities and this year expects to hit the 0.8 percent mark. Solar accounts for 0.1 percent of TEP generation, even with the contribution of the largest solar-power array in the nation at Springerville.

Nearly the entire balance of the TEP renewable effort comes from methane generated at the city's Los Reales landfill and burned at the Sundt Station three miles away.

The new ACC mandate contemplates increasing the annual cost of this nearly 14-fold increase in alternative power from about $20 million to an estimated $50 million.

No final order is in place to execute this requirement. The funding mechanism, at least, may need adjusting. The current monthly surcharge for residential customers would rise from a maximum 35 cents to $2 under the plan. Small commercial customers could see the cap on surcharges increase from $13 to $75.

We should encourage renewable energy sources and cut down on fossil-fuel usage. But the entire burden of this effort need not fall just on the state's regulated utilities and their customers.

State and federal tax incentives exist for individuals and businesses to install solar equipment.

Conservation can answer many of the concerns of those pushing for these difficult standards. It might be easier and cheaper to cut energy usage than to enact this ambitious plan.

Pushing for more sources of renewable energy is a worthy goal. It is unclear that the ACC plan is the best way to achieve that.

As we attempt to peer into the future, we must not box ourselves into a corner even if the goal is a cleaner environment.

* Contact Richard Ducote at 573-4178 or rducote@azstarnet.com.

Source: Arizona Daily Star

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