Members of the Arizona Corporation Commission voted unanimously earlier this month to elect Kris Mayes as the panel's chairwoman for the next two years.
Her initial appointment to the five-member panel in 2003 proved controversial.
When Gov. Janet Napolitano had to name someone to replace Jim Irvin, who resigned after being found guilty of misusing his position, state law required her to choose a Republican. She picked Mayes.
Mayes was — and is — a registered Republican. But she had worked on Napolitano's 2002 campaign and later became her press aide. That resulted in state Republican Party Chairman Bob Fannin saying the governor had many more qualified party members from which to choose.
But Mayes, seeking re-election on her own in 2004, handily defeated Carl Seel in the primary and eventually won the general election.
Since that time Mayes has been one of the proponents of requiring utilities to generate or buy at least 15 percent of their power from renewable sources by 2025. And Mayes said she actually hopes now to increase that goal.
To help utilities meet that goal, the commission agreed to let utilities charge higher prices to consumers, especially businesses.
Mayes recently sat down to talk about the mandate, the costs and utility regulation overall.
Q Why tell utilities where they have to get their power?
A For one big reason, which is that the cost of fossil fuel-driven electricity is rising, and it's rising rapidly. Except for a recent drop in the price of natural gas, the price of natural gas and especially coal is going up over time. And we have to go in a different direction. And we have to start somewhere. I think it's important to make sure that utilities are building a balanced energy portfolio. And they weren't before a few years ago.
When Congress passes that cap-and-trade program (to regulate greenhouse gases), and they probably will in the next five years, these coal plants at Springerville that are owned by Tucson Electric Power and Salt River Project, and the coal plants in northeastern Arizona that are owned by Arizona Public Service, are going to be much more expensive. And the power coming out of those plants is going to make renewable energy look cost-effective by comparison.
And even if Congress didn't pass the cap-and-trade program, I believe the cost of natural gas will continue to rise. And we would have looked like fools if we hadn't done this.
Q: Just this past month the commission agreed to let utilities charge their customers even more for the higher cost renewable energy. For most business customers of Arizona Public Service, the maximum is increasing from $48.84 a month to $117.93; large industrial customers could pay up to $353.78, up from $146.53. And residential customers face a new cap of $3.17 a month instead of $1.32. How high is the commission going to allow this surcharge to go, and for how long?
A: So far we have not seen a huge backlash, much of a backlash at all, against the increases that we allowed for the renewable energy standard. I think that most people would rather see their money go to renewable energy than just go into the pockets of the utility companies for traditional-fired electricity. That being said, I think there could come a time where people say, "You know, I don't know. Are these increases happening at a rate that I didn't understand a few years ago?'' I don't think we've gotten to that point. But we have to be careful and vigilant about that.
The subsidy on the federal level on it has gone up so much (in the form of income tax credits for renewable energy) that we may be able to control or even reduce, over time, the subsidy on the state level. That's what we ought to be doing anyway. The subsidy on the state level ought to be going down as the price of solar goes down. Now, if the price of solar doesn't go down, we have a problem.
Q: Two of the three new commissioners elected in November and just seated are Democrats Paul Newman and Sandra Kennedy. They ran as part of the "solar team." Will their presence on the panel make it easier to impose new, higher renewable-energy mandates on utilities?
A: I don't know if it's going to be easier. I think there's a clear majority of commissioners that want to increase the amount of renewable energy that we do in Arizona. Six months ago I called for 25 percent by 2025. I still believe that's where we ought to go. I think we can do that without impacting consumers because you're increasing the standard at the year 2025, which is I think where utilities are going to go anyway.
My view is you should try to have as much consensus as you possibly can on the commission. I'm not interested in just having three commissioners support solar energy. I would like to have five commissioners support solar energy and renewable energy and anything that we do to move this agenda forward. If it turns out that we only have three commissioners, perhaps that's acceptable. But it's not the objective.
Q: The rules are being challenged in court by the Goldwater Institute. Why do you feel you're going to win?
A: Our process was airtight, lock-solid and unimpeachable. We took four years to establish the renewable energy standard. We took on a lot of criticism for the lengthiness of our process. But due process was achieved in establishing the RES (renewable energy standard). And the same kind of careful review has to be done on any changes we might make in the future.
Q: But the lawsuit is not about process but whether the commission has the constitutional authority to enact the standards.
A: They're wrong. We have the constitutional authority. The Goldwater Institute is dead wrong. And I think it's really sad that this institute, which bears the name of Barry Goldwater, would be engaging in a lawsuit that I think he wouldn't agree with. They picked the wrong issue on this one. And they picked the wrong branch of government. I mean, we clearly have the authority for this. And we have the support in defending against this lawsuit of just about everybody, including the utility companies.
