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Arizona Chair: Take Smaller Bites At Electric Choice To Avoid "Choking"

Several Commissioners Favor Discrete Actions Versus Broad Approach To Retail Choice

Chair Burns Outlines Several Policies "In Choice Area", As Opposed To Redesigning Whole System To Become "Retail All At Once"

Olson: Current Schedule Does Not Reflect a "Serious" Evaluation Of Choice, Requests Defined Timeline

March 14, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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During a Staff meeting of the Arizona Corporation Commission yesterday, several Commissioners favored emphasizing smaller, discrete actions, and not a broad implementation of retail electric choice all at once, as the Commission moves forward with its consideration of electric competition

"We can choke on something if we try to swallow too much, so maybe it's better if we take smaller bites," said ACC Chairman Bob Burns

Burns was responding to comments made by Commissioner Boyd Dunn, who asked if the Commission was going to pursue in its investigation a comprehensive ("wholesale") adoption of retail electric choice, or more discrete actions.

"Are we going for wholesale [comprehensive] retail competition, or are we going to look at those opportunities where we can increase competition in areas that make the most sense," Dunn said

"What we tried last [time] was clearly a wholesale [approach to] retail competition," Dunn said, with the ACC essentially throwing out its regulation over pricing. That approach was struck by a state court due to the ACC's constitutional charge (see story here).

"I don't think we're talking about that [comprehensive retail choice], I hope not, I'm not ready to go down that road. I think that would be a waste of Staff's time," unless there was a clearly articulated policy from the Commission that the ACC wants to arrive at such a "wholesale" implementation of competition, Dunn said

Dunn suggested expanding on policies the ACC has already adopted, citing the expansion of the competitive buy-through program from large to medium customers, and suggesting to see what the ACC could do for residential customers.

Otherwise, if the ACC did go down a road of attempting a comprehensive adoption of retail choice, the Commission will again get stuck on legal issues, Dunn said

Burns identified a number of policies he considers to be "in the choice area", on a smaller scale, that he asked to be addressed. These are in contrast to, "trying to redesign the whole system to become retail all at once," Burns said.

These included various policies for entities, many of which would be non-utilities, to generate electricity or put power on the grid, including:

• "CCAs" which Burns called community choice augmentation programs. Burns cited CCAs as they exist in some seven states. While Burns noted that CCAs are typically used by municipalities, Burns cited the ability to augmentate rooftop solar & storage to negotiate better pricing for excess power

• Peak management strategies, including behavioral demand response enabled by alerts to customers to turn up their thermostats on hot days

• Virtual peakers via homes with solar plus storage, such as being developed by Mandalay Homes in Prescott Valley

• Rent-a-roof solar feeding into storage, such as that developed by APS

• Electric generation via methane emissions from dairy farms, and virtual microgrids

• A microgrid at ASU or another location

Commissioner Sandra Kennedy also made comments in support of initially starting with a smaller scope, suggesting if there was a way to test choice in an area of the state first

Commissioner Justin Olson asked that the Commission establish a deadline for making a decision on retail choice, and then setting a schedule to meet such deadline. Olson suggested a Commissioner-led process to investigate choice, with Commissioners identifying the information that they need and questions that they need answered to make a decision, so the process could address such needs.

Burns didn't mind establishing a process, but was reluctant to establish a hard deadline for a decision, as he didn't know how much there would be to review in the proceeding.

Olson said that there is a lot of work to do if the Commission is "serious" about evaluating retail choice, and doesn't believe the current pace, with a Staff proposed workshop in July, will get all the questions resolved. Olson suggested a series of monthly workshops on choice, and said that the current schedule does not reflect a "serious" evaluation of choice

Staff reiterated legal challenges to retail choice, and described the undertaking as a "huge" process

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