AZ BUYS NM WIND

In the ongoing Washington, D.C., debate over a national Renewable Electricity Standard (RES), some southeastern states object to being drawn into a national plan because they claim they lack adequate resources to meet a minimum level of New Energy production. A situation developing in the southwest might be instructive.

Arizona Corporation Commissioner Kris Mayes is concerned because Arizona Public Service Co. (APS), the state’s biggest utility, is buying wind-generated and geothermal-generated electricity from neighboring states. Mayes believes this reduces the jobs and investment benefits New Energy could generate in Arizona’s economy.

Mayes is also angry because Arizona adds almost $2.00/month to customer bills to fund New Energy development. Mayes: "This is Arizona ratepayer money that is currently going to other states that ought to stay in Arizona…We are in an economic downturn. It's a terrible time to be investing out of state."

APS is just looking to buy the cheapest electricity it can.

Commissioner Gary Pierce: "If we are getting the objective we want - the use of renewable energy - we should get it for the cheapest price possible for ratepayers…All things being equal, you want to do it in Arizona."

But all things are not equal. Arizona ranks 30th in the U.S. for wind energy potential and its best winds blow during its warm winters when electricity demand is lowest.

Don Brandt, CEO, APS: "We put all these projects out with a competitive bid…Then we select the resource that comes out the best. It's not always the cheapest. It's a combination of price, reliability and do-ability, all the things a common businessperson would look at…We always pick the resource that's best for our customer…We are not going to put business in New Mexico if we could find the equivalent here."

Arizona’s huge assets are in solar energy and its Renewable Electricity Standard (RES) puts extra emphasis on developing them. The day will come, sooner or later, when Arizona’s neighbors need the cheap solar-generated electricity it is in the early stages of developing.

Meanwhile, Arizona is supporting more than the development of its neighbors’ assets. It is assuring that the grid is capable of carrying electricity between the states. Right now, sales are going out of Arizona but that won’t always be the case.

In a similar way, southeastern states might be more motivated to be part of a national RES if they could in some way be considered to have met minimum requirements by investing in their transmission infrastructure and purchasing New Energy-generated electricity from asset-abundant neighbors. Developing the grid is just as important right now as developing generating infrastructure.

click to enlarge

Regulator asks why Ariz. wind power is not tapped
Ryan Randazzo, March 21, 2008 (Arizona Republic)

WHO
Arizona Public Service Co. (APS); Arizona Corporation Commissioner Kris Mayes

Arizona really doesn't have a lot of wind... (click to enlarge)

WHAT
Mayes is concerned that APS is buying wind-generated electricity from New Mexico’s Aragonne Mesa Wind Project and other states’ New Energy projects rather than building its own wind energy infrastrucuture.

WHEN
Arizona’s Renewable Electricity Standard (RES) requires its utilities to obtain 15% of their power from New Energy sources by 2025. More importantly, a significant portion of the requirement must be met from distributed sources, a provision strongly favoring solar development.

...New Mexico really does and... (click to enlarge)

WHERE
- Aragonne Mesa Wind Project is near Santa Rosa, New Mexico.
- APS is buying wind-generated electricity from New Mexico and Utah. It is also buying electricity generated by geothermal sources from Utah.
- APS-commissioned reports show wind-power potential in Coconino, Navajo, Apache, Mohave and Gila counties.
- Arizona and Nevada are the only states west of Louisiana without wind facilities producing or being developed.

WHY
- APS buys Aragonne’s 90 megawatt output.
- APS studies show Arizona has a few wind energy assets rated excellent.
- Salt River Project (SRP), another big Arizona utility, is buying 50 megawatts of wind-generated electricity from a Public Service Co. of New Mexico.

...the planned SunZia Southwestern Transmission Project will supply the necessary interconnect. That's the way to do it!(click to enlarge)

QUOTES
- Kris Mayes, Arizona Corporation Commissioner: "I am concerned that such out-of-state purchases hinder the development of renewable energy here in Arizona, and potentially deprive our state of much needed economic development…"
- Don Brandt, CEO, APS: "…the purpose behind the [wind] studies [was] . . . to make sure everyone knows where the sites are in Arizona to take into consideration…"