Dive Brief:

• Arizona Public Service (APS) has sent a letter to both the state senate and governor's office, expressing opposition to proposed legislation that would bar the state's utility regulators from mandating decarbonization.

• The Arizona Corporation Commission (ACC) voted in November to require the state's utilities to achieve 100% clean energy generation by 2050. The Arizona House and Senate have introduced twin bills to overturn the ACC's decarbonization rules and to prevent such rules in the future.

• APS had remained publicly neutral toward the two bills until Thursday. The company has decided to oppose both bills in light of increasing regulatory uncertainty, according to an APS letter to state lawmakers and to the governor's office.

Dive Insight:

Ambiguities about the ACC's authority to regulate carbon emissions exist, but should be argued in the courts, not decided through legislation, according to a letter issued Thursday by Arizona Public Service.

The letter, emailed to both the Arizona Senate and one of Governor Doug Ducey's policy advisors, acknowledges that the authority of the ACC to regulate carbon emissions remains in question. However, the letter argues that the conflict should be resolved through litigation before the courts, and not by legislative action, which APS asserts will create greater uncertainty for Arizona utilities.

“Until this is resolved...APS supports the legal and regulatory constructs that have served the Company and its customers for well over a century,” APS wrote to state leaders. “If the courts reserve that construct, APS will adapt accordingly, but the Company cannot support legislation that has the potential to interfere with its ability to recover investments that facilitate the economic development and job creation that has made Arizona the fastest growing state in the country.”

As with many states, Arizona is currently embroiled in a debate about the extent of regulators' authority when it comes to decarbonization. The ACC voted 4-1 in November to require utilities to cut carbon emissions 50% by 2032, and 100% by 2050, updating a set of renewable energy standards established in 2006.

The legal debate is further complicated by competing case law. A 2011 judicial decision by an Arizona appellate court upheld the regulators' 2006 renewable energy standards, but a more recent July 31 ruling by the Arizona Supreme Court rejected that 2011 decision. Last summer's ruling prompted ACC Commissioner Justin Olson to write an open letter to his fellow commissioners questioning whether the regulatory body has the legal authority to limit carbon emissions.

Governor Ducey expressed his support for limiting the power of the ACC in January. Within days, both the state Senate and House of Representatives had begun to debate bills that would limit the power of the ACC to regulate emissions. House Bill 2248 passed 31-28 and progressed to the senate on March 3. The full senate has yet to vote on Senate Bill 1175.