The Arizona Corporation Commission on Oct. 28 once again rejected a biomass mandate to bolster forest thinning efforts.
On a 3-2 vote, the commission rejected Commissioner Lea Marquez Peterson’s plea to require utility companies to generate at least 50 megawatts of power annually from biomass. Forest thinning advocates say such a mandate may be the only way in the short term to generate a market for the wood slash from thinning projects necessary to reduce the risk of catastrophic wildfire throughout northern Arizona.
“It’s time for leadership from the corporation commission,” said Peterson. “This involves less than half a percent of the state’s peak demand and would provide an incredible solution for northern Arizona and the watersheds that sustain the Valley. We are seeing catastrophic wildfires and the financial impact as well as the environmental impact. It’s time that we take these steps so we have at least one action to try to solve the issue of wildfires.”
Outgoing Commissioner Boyd Dunn agreed, saying benefits would far outweigh the higher costs of biomass-generated electricity. “Look at what’s happening to California. It’s so sad. What’s the cause of that — the condition of the forest or the climate? There’s no question that the condition of the forest — no matter what the climate is — will continue making these fires so difficult to control. We’ve been blessed this year to not have an instance occur in Arizona. I know we don’t like mandates — but it’s pretty minimal statewide.”
However, the pair once again failed to convince the commission majority.
Chair Bob Burns, Commissioner Sandra Kennedy and Commissioner Justin Olson all said preventing wildfires remains an urgent problem — but insisted someone else should provide that leadership and the commission should not burden ratepayers with higher rates — no matter what benefits would result.
Burns said he hopes that the Four Forest Restoration Initiative’s (4FRI) repeatedly delayed award of 20-year contracts to thin another million acres will turn up a contractor who can create a market for biomass that doesn’t require a mandate from the commission.
A study more than a year ago suggested that a 60 megawatt biomass mandate could not only save the existing biomass burning power plant in Snowflake but spur Arizona Public Service to covert one unit of the soon-to-close, coal-fired Cholla Power plant into a 30 to 60 megawatt biomass plant. The study suggested a biomass mandate would add $1 a month to the bill of the average APS customer.
However, the commission majority rejected any mandate that would increase electrical bills — no matter how many spinoff benefits such a rule would generate.
Sandra Kennedy — the only Democrat on the commission and an advocate for renewable energy mandates — nonetheless opposed the biomass mandate, although biomass is also considered a form of renewable energy.
“I really think there should be more leadership from the governor on this issue. Unfortunately, we have not had his leadership to come up with a solution,” said the former state lawmaker “and the legislature has not come up with a solution. I’m disappointed that Commissioner Peterson wants to put this on the back of the ratepayers. The ratepayers should not be the solution to this problem ... I’m appalled that we aren’t as a commission — all five of us — going to the leadership of this state and saying ‘do something.’ Something must be done, but this is not the place to do it.”
Burns agreed: Someone else should solve the problem. “I think this is a federal responsibility. We keep hearing the RFP (for 4FRI) is going to be issued at some point — and I hope it is very soon — but that will cover a lot more territory than we could get from a biofuel.”
Olson said the commission’s only appropriate role it to make sure the electrical utilities it regulates keeps electrical costs as low as possible.
“I certainly can understand and agree that the benefits (of a biomass mandate) outweigh the costs. But that is not the question that this body is empowered to evaluate. The state established the state legislature to weigh these issues. What is in the public interest? What is the public benefit? We certainly need to mange our forest appropriately. The federal government has abdicated that responsibility. But the possibilities are endless if we deem our role as taxing ratepayers for any purpose we feel worthy.”
Advocates for the biomass mandate say the rule would have a huge financial benefit for electric ratepayers by preventing catastrophic wildfires. This would protect reservoirs, electrical infrastructure, the region’s tourist economy, real estate values and wildlife while producing a big net decrease in heat-trapping soot and carbon released into the atmosphere.
Pacific Gas and Electric Company in California was bankrupted by lawsuits stemming from lethal wildfires sparked by downed power transmission lines passing through the forest. The utility also suffered extensive losses of infrastructure as a result of the fires. California utilities now routinely shut down the power grid for millions of customers when wildfires or high winds threaten transmission lines. In Arizona, power lines from most of the state’s power generating plants pass through forested lands.
One estimate produced by Northern Arizona University economists concluded that burning biomass costs about $102 per megawatt hour compared to $47 for solar, $37 for wind and $48 for coal.
However, the value of protecting the watersheds on which the Valley depends comes to about $184 per household — more than 10 times the $12 higher annual cost of the biomass mandate.
Another study compared the environmental benefits of burning biomass and reducing catastrophic wildfires to coal. That study put the environmental benefits of burning biomass at nearly $1 million per megawatt/year.