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Mon, Oct. 21

Court rules utilities can burn trash to produce electricity

PHOENIX -- An Arizona utility can burn trash and claim the electricity it generates is coming from renewable resources, the state Court of Appeals ruled Thursday.

The judges rejected arguments by the Sierra Club that the Arizona Corporation Commission acted illegally in concluding the Mohave Electric Cooperative could meet part of its renewable energy mandate through trash. They said it is up to the commission to decide what is renewable, a decision they did not want to second guess.

In upholding the commission's 2011 vote, the court also overturned a 2013 ruling by Maricopa County Superior Court Judge Crane McClennen. He had concluded that the commission violated its own rules in concluding power from incinerators burning waste could be considered "renewable.'

Thursday's ruling, unless overturned, should clear the way for Mohave Electric to meet part of its renewable energy mandate through power generated from a proposed plant near Surprise. But it also paves the way for other utilities to propose incineration of trash to meet their own mandates.

Commission regulations require all utilities to obtain at least 15 percent of their power from renewable resources by 2025. And that has been defined in rules as technology that displaces "conventional energy resources' like natural gas, coal, oil and uranium.

But recognizing the higher cost of alternatives, commissioners also agreed to let utilities impose a surcharge on customers.

The Surprise trash-burning plant was pushed by a company called Reclamation Power Group. The company needed it to quality as "renewable' power in order to charge Mohave the rates to justify the cost of the power plant and for Mohave to be able to charge more to its 39,000 customers.

Commissioners approved the request four years ago on a 3-2 party-line vote, with Republicans in support.

Tim Hogan of the Arizona Center for Law in the Public Interest, representing the Sierra Club, argued that the commission's own rules do not allow trash incineration to be considered a renewable energy resource.

But Judge Patricia Orozco, writing for the unanimous three-judge panel, sidestepped that question. Instead, she pointed out that the commission's rules entitle it to issue waivers from its rules and that "good cause' was established to give Mohave such a waiver.

Hogan said that makes no sense.

"That's a black hole,' he said, essentially giving the commission carte blanche to ignore the regulations it enacted through a formal rule-making process.

"They just granted a waiver here because they thought it was a good idea,' Hogan said of the commission. "Well, if it's a good idea, you need to change the rules, not just grant waivers willy-nilly.'

Orozco said commission decision about its own rules are entitled to deference. But Hogan said there are limits to that.

"You still have to have some reason for a waiver other than 'it's a good idea,' which would ordinarily require an amendment to the rule,' he said. "It's almost as if the court treats the rule as advisory or something like that.'

In defending the waiver, Bob Stump, then chairman of the panel, pointed out that even the federal Environmental Protection Administration classifies waste energy as renewable.

"And, of course, if the choice is between landfilling the waste and converting it to energy, it made sense to us to convert it to energy,' he said.

On Twitter: @azcapmedia

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