Basking in RPS Afterglow in Arizona?

UPDATE: February 25, 2010:  The political equivalent of a solar flare hit in Arizona after word of HB2701 hit the fan—errr-I mean press, and the sponsor has now withdrawn the bill sunburned from the experience.   GLH

Merriam Webster defines “afterglow” as:

1 : a glow remaining where a light has disappeared
2 : a pleasant effect or feeling that lingers after something is done, experienced, or achieved <basking in the afterglow of success>.[1]

So that must be how the Government Committee of the Arizona House of Representatives felt when it voted out HB2701 on February 23, 2010 in a party line vote and sent it to the House Rules Committee to schedule a vote.  This may have started out as a stunt but may turn into just an embarrassment before its all over.

RPS  Goal Met!

HB2701 redefines the meaning of renewable energy in Arizona for purposes of satisfying the state’s renewable portfolio standards to include nuclear power.  And since the State’s largest jurisdictional utility, Arizona Public Service owns a sizable piece of the Palo Verde nuclear plant it will automatically satisfy its RPS obligation if the bill is passed and signed into law.

This may be just a political stunt by the conservative Republican majority in the Arizona Legislature, but it sent an electric shock through one of the most important solar power markets in the US. Without the continued RPS obligation, renewable energy of every type will have to compete with other sources of energy for a place in the utility resource mix based upon cost and other factors assuring a reliable, balanced portfolio to meet the needs of Arizona customers.

Developers will still be able to build in Arizona and continue to create jobs in the solar sector but they may have to export their solar energy to other states like California where you can bet the politicians are not going to be following Arizona’s policy lead on this one.

So what?

This action in Arizona reminds us of how fragile the renewable energy business sector is today. Just like the failure of the feed-in-tariffs in Spain and Germany caused the entire global market for solar PV panels to be turned upside down, isolated actions like this can have big ripple impacts.

Remember when Congress delayed its annual renewal  of production tax credits in years past sending the wind industry  into a nosedive?  Actions such as these scare off investors by pointing out the vulnerabilities of an over reliance on any kind of government subsidy or action.  It also reminds utilities that beyond compliance with the RPS rules they might not want to be too dependent on one type of resource to meet marginal energy requirements no matter how politically correct it is.

Clean and renewable energy is still being propped up by a complex web of subsidies, tariffs, RPS and procurement requirements across the states and even the actions of one state can shake the house of cards.

Renewable energy plays a valuable and important role diversifying our energy mix but until it gets to grid parity costs and can be economic on the basis of least cost, best fit factors that have driven utility integrated resource planning over much of the last fifty years it will not be truly sustainable. And if it is not sustainable it is not reliable.  And if it is not reliable it will certainly not be worth what we are being forced to pay for it in our coming utility bills.