KINGMAN, Ariz. — An Arizona utility is seeking to build natural gas turbines without having to jump through typical bureaucratic hoops for environmental approval. Critics say the request – if granted - would set a bad precedent in Arizona.
“I do think this is kind of an inflection point and we do have to make sure these kinds of regulatory processes remain in place,” said Alex Routhier of the energy-renewable nonprofit Western Resource Advocates.
UNSE proposes expanding natural gas plant
UniSource Energy Services, also known as UNSE, proposed expanding its Black Mountain Generating Station near Kingman with four new natural gas turbines. The turbines convert natural gas to electricity. UNSE argued the size and scope of the expansion excluded it from an environmental review and it applied for a “disclaimer of jurisdiction”, amounting to permission from the Commission to avoid an environmental certification process.
After a two-day hearing this week the Arizona Power Plant and Transmission Line Siting Committee - an 11-member government body designated to review such applications at the Arizona Corporation Commission - rejected UNSE’s request by a vote of 9-2.
But the utility has 15 days to appeal the decision to the more powerful Arizona Corporation Commission. That could be a less predictable result. Over the past year, the four Republicans of the five-member elected Commission have generally sided with utilities on contested issues and in November they approved a natural gas plant expansion for APS under unusual circumstances and did not allow public comment.
“We’re considering next steps,” said Joe Barrios of UNSE, regarding whether it will appeal. “We want our customers to know we're working to preserve reliable, affordable service and a more secure energy supply for the communities we serve.”
Debating the meaning of 'plant,' 'unit' and 'generator'
UniSource Energy Services provides electricity and natural gas to five counties: Santa Cruz, Mohave, Yavapai, Coconino and Navajo. It is a sister company to Tucson Electric Power.
UNSE argued during the hearing that state law regarding new electrical power plants does not apply to UNSE’s project because the law only pertains to generation units producing 100 MW or greater.
The UNSE expansion involves four 50 MW turbines. The turbines convert natural gas to electricity for homes and businesses.
“Each new generating set, turbine and generator, is a separate generating unit,” said Meghan Grabel, an attorney representing UNSE, during the hearing.
The company said although the turbines are on the same site and connected to shared equipment (like cooling towers, an evaporation pond and tubes), they should be viewed as separate power plants as defined by state law.
“The argument that the shared equipment transforms four units into one unit is as disingenuous as saying that two cars housed in the same garage, washed with the same hose, fueled at the same gas station and serviced by the same mechanic are no longer separate cars even though they can be driven at different times and different speeds,” Grabel said.
Opponents argued that “semantic Olympics” were required to make the utility’s argument. Much of the debate surrounded the meaning of words like “plant,” “unit” and “generator” as applied to the law and the energy industry.
“The applicant has provided no evidence the legislature intended what they claim,” said Autumn Johnson, an attorney representing Arizona’s solar industry. “It is wildly improbable that the legislature was making a subtle distinction that differentiated between generators, turbines and plants when they enacted ARS 43-60. The most logical conclusion is that the legislature meant plants to mean exactly that.”
'Their position is, respectfully, hypocritical'
Certificates of Environmental Compatibility are intended to assure the public that a project will not pose “unreasonable impacts” to development plans, wildlife, noise pollution, recreation and the environment.
“There is a single question before the committee: Does UNSE’s proposed project meet the definition of a plant and thus require a review?” said Emily Doerfler of Western Resource Advocates. Doerfler said the evidence showed the answer was yes.
Grabel accused the solar industry of interpreting state law to benefit their interests only.
“Their position is, respectfully, hypocritical,” Grabel said.
The Corporation Commission Staff, which develops its own positions on issues before the Commission, sided with UNSE and said the staff did not believe the utility was not attempting to subvert state law by planning to construct four smaller plants.
“While every utility planning to construct a plant is obligated to file an application for a CEC, small plants with nameplate ratings less than 100 megawatts are exempt from the CEC process. The controlling term here is the definition of generating ‘plant’,” said Maureen Scott, Chief of Litigation and Appeals, in a written response filed with the Commission.
“After consideration of testimony presented, Staff stands by its original conclusion,” Scott said Thursday.
Committee chair calls utility’s argument 'absurd'
Before voting to deny UNSE’s request, Committee Chair Adam Stafford said the utility’s reasoning, if accepted by the committee, would have amounted to the legal definition of an “absurd result.”
“You heard the applicant tell us that under their interpretation of the statute, someone could build 1,000 MW of small modular reactors in a residential neighborhood and not have to go through this process. That is a transparently absurd result,” Stafford said.
Johnson said the commission would “open the floodgates for other utilities in Arizona to do the same thing” if it accepted UNSE’s request to disclaim jurisdiction.
Scott said she disagreed.
“I myself don’t feel it would create a loophole that other companies could utilize in abating the statute because their facts may be much different than the facts in this case,” Scott said.
Natural gas emits heat-trapping methane
Although less damaging to the environment than coal, natural gas plants emit methane into the atmosphere, a heat-trapping gas that contributes to climate warming.
One recent study published in Nature found evidence the government is undercounting the amount of methane emissions from US oil and gas-producing regions.
UNSE’s long-term integrated resource plan calls for 200 megawatts of natural gas turbines, 350 megawatts of solar and wind resources, and 225 MW of energy storage systems by 2038, Barrio said.
Natural gas expansions can bring unwanted publicity
The process of obtaining a Certificate of Environmental Compatibility can bring unwanted publicity to a utility. In 2022 SRP faced backlash when it proposed expanding a natural gas plant near the small town of Randolph. The Commission initially denied the certificate. The two sides later agreed on a compromise after SRP promised to make several financial concessions to benefit Randolph’s residents and infrastructure.
The Commission then voted in favor of the CEC after reviewing the settlement agreement.
“There were substantial remediations that were required from SRP in that case,” said Alex Routhier of Western Resources Advocates. “I think those types of things are also important in a CEC process.”
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