Salt River Project’s Renewable Energy Opportunity


The Salt River Project (SRP) is a utility that delivers about a third of the electricity in Arizona. Unlike the other utilities in the state, it is not regulated by the Arizona Corporation Commission—and not covered by the state’s rules for renewable energy. Instead, it has a voluntary standard that it calls its “Sustainable Portfolio”. SRP is currently in the process of revisiting and revising their renewable procurement efforts, and has commendably opened the effort up to the public for input.

We believe that SRP should increase the amount of renewable energy it plans to procure. There are at least three good reasons:

* SRP’s current plans for procuring renewable energy—about 6.8% of retail sales by 2020, give or take–are far short of what other utilities in the state are doing, and much less than the commitments required in neighboring states. Arizona Public Service, for example, will do about twice as much in half the time.

* An investment in solar means an investment in Arizona. Solar companies have announced manufacturing efforts that will total over 6000 jobs and over $1.8 billion in investment. Solar means economic opportunity for local communities.

* SRP’s ratepayers want it. Several recent polls show that consumers want action on renewable energy—and solar polls through the roof.

All told, SRP has an opportunity to maximize beneficial impact by driving local demand, putting local people to work, and partnering with the community in creating economic opportunity. We recommend that SRP increase it’s commitment at least to the level required by other utilities in the state.

Renewable Goals

Using the data provided publicly by SRP, analysis shows (pdf) that SRP’s current plans would result in non-hydro renewable energy resources comprising about 6.8% of SRP’s total retail sales in 2020. This figure is less than the requirement for ACC-regulated utilities, which will reach 10% by 2020 and 15% by 2025. And other utilities in the state are making plans to exceed even those requirements. Arizona Public Service, for, example, has announced commitments (since approved by the Arizona Corporation Commission) to exceed 10% renewable energy by 2015 .

Neighboring states are doing much more. A year ago, building upon the voter-mandated Renewable Portfolio Standard, Colorado passed legislation requiring 30% renewables by 2020. Nevada recently set a standard of 20% by 2020 (ramping to 25% by 2025, of which a quarter may come from certain energy efficiency efforts). California’s utilities are required to reach 20% by 2010, and Governor Schwarzenegger issued an Executive Order requiring 33% by 2020 (a legislative requirement to that same effect is expected shortly).

Comparison of Renewable Goals

SRP: Approx 6.8% by 2020

ACC Renewable Energy Standard: 10% by 2020, 15% by 2025

Arizona Public Service plan: 10% by 2015

Colorado Renewable Portfolio: 30% by 2020

Nevada Renewable Portfolio Standard: 20% by 2020, 25% by 2025

California Renewable Portfolio Standard: 20% by 2010, 33% by 2020

While SRP’s efforts to invest in renewables are laudable, they fall far short of what’s required of other utilities in the state–some of whom are exceeding even those goals. SRP’s efforts are also far short of what’s being done in neighboring states. Clearly, there is precedent to do much more than what SRP currently plans.

Economic Investment

An investment in solar is an investment in Arizona’s economy. Every megawatt of installed solar capacity creates up 30 job-years throughout the value-chain, from manufacturing to installation to operations. Installation jobs are by definition local, and there are many local companies in Arizona that have developed world-class expertise in low-cost installations. And the larger the local market, the lower prices they can deliver through economies of scale, increased experience, and better-amortized overhead.

Because of favorable conditions and a burgeoning local market, Arizona has become a destination of choice for those looking to site new manufacturing plants. FirstSolar recently announced that it will build a new photovoltaic manufacturing plant in Mesa, with a projected capacity of 250 MW. Suntech, another major manufacturer, opened a PV plant in Goodyear that has already nearly doubled in capacity since October, and employs 100 people. The site has room to scale depending on demand. PowerOne opened an inverter manufacturing plant. Solon has a manufacturing facility in Tucson. Gestamp Solar Steel Company opened a facility in Surprise, Arizona, to manufacture components for concentrating solar applications. Tower Automotive, Rioglass, Linamar, AlphaEnergies, and Faist have all recently made decisions to site manufacturing operations in the greater Phoenix area. All told, according to the Greater Phoenix Economic Council, recent private commitments to manufacturing in the state have totaled about $1.8 billion dollars of investment, and will create around 6,000 manufacturing jobs.

The University of Arizona and Arizona State have each invested significant resources into developing world-class research institutions. AZRISE is doing hard research on solar technology. A large amount of the Technology Research Initiative Funds (TRIF) are going into solar efforts. The Science Foundation of Arizona recently gave a $1 million grant to a UA researcher for development of next-generation solar technology. And community colleges (such as Pima Community College) have invested large amounts of money to create a pipeline of talent for solar–and individuals that are participating in those programs are investing their time, energy, and money on the promise of being a part of a cleantech economy.

Clearly the cumulative energies of the civic, academic, and economic forces of the state are oriented towards making Arizona a world leader for solar. Their efforts will be for naught if there is not sufficient demand for the products. SRP should play its part by driving local demand, putting local people to work, and partnering with the community in creating economic opportunity. An investment in solar helps keep money in the local economy. Arizona produces no natural gas–increasing natural gas generation sends more money out of the state. SRP has a wonderful opportunity to play a proactive, positive role in Arizona’s cleantech leadership and economic renaissance. The point is well made by a recent Arizona Republic editorial.

Polls

SRP commissioned a poll on customer attitudes, which provided some extraordinary results. According to SRP’s data, only 7% of Arizonans think that no action should be taken on climate change, and 71% think that action should be taken now. According to a recent poll by Public Opinion Strategies and Fairbank, Maslin, Maullin, Metz & Associates:

“More than four-in-five say that it is time to start replacing coal with renewable energy sources. Given a choice between investing in renewable energy like wind and solar power and investing in pollution control equipment for coal-burning power plants in light of updated air quality safeguards, voters are three times as likely to prefer an investment in renewable energy and transitioning away from coal. A majority believes that such a transition would create new jobs in Arizona, rather than cut the number of jobs in the state.”

Clearly, there is strong preference on behalf of ratepayer to do more.

Solar can and should be a central part of Arizona’s economic renaissance. SRP’s current plans for investment in renewable energy are far short of what other utilities in the state are pursuing, and much less than what is required in other states. Solar provides a great value for ratepayers, and economic opportunity for the state. SRP should increase its commitment at least to what neighboring utilities are pursuing, and even more if it wishes to take a leadership position.

If you want to get involved, take action here.

Vote Solar is a non-profit grassroots organization working to fight climate change and foster economic opportunity by bringing solar energy into the mainstream.



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