Legal analysis says new ballot measure will not force closure of Palo Verde nuclear plant

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A new legal analysis by public interest attorney Tim Hogan and energy attorney Samuel T. Walsh disputes claims by Arizona Public Service that the Palo Verde Nuclear Generating Station would be forced to close if the Clean Energy for a Healthy Arizona ballot measure passed in Arizona. The analysis finds that APS cannot legally close the plant, and that it would have to get permission to close it from the Arizona Corporation Commission, which would not be likely to occur. We’ll hear more about the analysis from Dylan Sullivan, senior scientist for the Western Region Climate and Clean Energy Program.

Ted Simons: ARIZONA PUBLIC SERVICE WARNS THE PALO VERDE NUCLEAR GENERATING STATION COULD BE FORCED TO CLOSE IF A SUFFER RENEWABLE ENERGY STANDARD IS PASSED BY VOTERS THIS FALL. AND A LEGAL ANALYSIST DISAGREES WITH THAT DECISION. JOINING US NOW IS DYLAN SULLIVAN, SENIOR SCIENTIST FOR THE WESTERN REGION OF THE CLIMATE AND CLEAN ENERGY PROGRAM. WELCOME TO "ARIZONA HORIZON." GOOD TO HAVE YOU HERE.

Dylan Sullivan: THANK YOU FOR HAVING ME.

Ted Simons: APS SAYS VALENTINE'S IS THREATENED BY THE MEASURE.

Dylan Sullivan: YEAH, LET'S FIRST TALK ABOUT WHAT THE INITIATIVE DOES, BECAUSE THE NUMBERS ARE DIFFERENT. SO WHAT THE INITIATIVE DOES IS -- WELL, WE ALL KNOW RIGHT NOW THAT ARIZONA IS THE SUNNY ESTATE IN THE COUNTRY, BUT GETS JUST 6% OF ITS ELECTRICITY FROM SOLAR. WHAT THIS INITIATIVE WOULD DO WOULD BE TO CHANGE THAT, AND REQUIRE UTILITIES LIKE APS TO GET 50% OF THEIR ELECTRICITY FROM RENEWABLE SOURCES BY 2030.

Ted Simons: AND APS SAYS IF YOU HAVE THAT MUCH DEPENDANCE ON RENEWABLE ENERGY, WHAT THEY GET OUT OF PALO VERDE IS JUST SIMPLY NOT GOING TO BE COST EFFECTIVE. THEY’RE GONNA HAVE TO PLEAD TO PEOPLE TO TAKE THEIR EXCESS ENERGY. THIS LEGAL ANALYSIS SAYS, YOU KNOW, IF APS GOES SO FAR AS TO HAVING TO CLOSE A PLANT, THEY SAY THEY CAN'T CLOSE THE PLANT. DO YOU AGREE WITH THAT?

Dylan Sullivan: I DO. LET'S BACK UP AND TALK ABOUT WHAT THE IMPACT OF THIS BALLOT MEASURE --

Ted Simons: WELL, I WOULD LIKE TO TALK A LITTLE BIT MORE ABOUT APS'S POSITION. BECAUSE THE LEGAL ANALYSIS SAYS YOU CAN'T CLOSE THIS NUCLEAR GENERATING PLANT.

Dylan Sullivan: SO WHAT THIS ANALYSIS SAYS IS THAT EVEN IF -- SO APS IS ACTUALLY NOT GOING TO CLOSE THE PLANT. IS BASICALLY WHAT OUR ANALYSIS SHOWS. NRDC, MY ORGANIZATION CONDUCTED REALLY DETAILED POWER SECTOR ANALYSIS OF THE WESTERN ELECTRICITY GRID, USING PUBLICLY AVAILABLE DATA AND TRANSPARENT INPUTS AND ASSUMPTIONS TO ANALYZE THE IMPACT OF THE BALLOT MEASURE. AND WHAT WE FOUND IN THAT, FIRST, THE BALLOT MEASURE IS GOING TO SAVE ARIZONA’S MONEY, BECAUSE RENEWABLES ARE CHEAPER, BUT WE ALSO FOUND THAT PALO VERDE OPERATES THE SAME NUMBER OF HOURS WHETHER OR NOT THIS BALLOT MEASURE PASSES OR NOT. AND THE REASON IS, IS THAT PALO VERDE IS A LOW-COST ENERGY RESOURCE, SO APS WOULD ACTUALLY TURN DOWN HIGHER-COST RESOURCES LIKE NATURAL GAS AND OTHER FOSSIL FUELS BEFORE TOUCHING PALO VERDE. BUT ALSO THAT THERE IS ENOUGH DEMAND ON THE SYSTEM FOR THE VAST MAJORITY OF THE HOURS OF THE YEAR TO ACCOMMODATE THE ELECTRICITY PRODUCED BY BOTH SOLAR AND PALO VERDE, SO THERE'S REALLY NO NEED FOR APS TO SHUT DOWN THE PLANT.

Ted Simons: AND YET, APS SAYS IF THEY HAVE TO PAY OTHERS -- AS CALIFORNIA IS DOING, PAYING OTHERS TO TAKE EXCESS ENERGY, AND IF THEY CAN'T KEEP PALO VERDE AS A VIABLE OPTION, KEEPING IT OPEN, YOU GOT MORE CARBON EMITTING RESOURCES THAT YOU WOULD WIND UP SETTING LOSE INTO THE ATMOSPHERE. DO YOU DISAGREE WITH THAT?

Dylan Sullivan: I DEFINITELY DISAGREE WITH THAT. AND APS HASN'T DEMONSTRATED THAT OTHER THAN SAYING IT IS TRUE. WHEN WE ACTUALLY DO AN ANALYSIS THERE IS ENOUGH ELECTRICITY DEMAND IN ARIZONA AND AROUND THE WEST FOR PALO VERDE ELECTRICITY AND FOR A LOT MORE RENEWABLES ON THE GRID. THE GRID CAN ACCOMMODATE A LOT MORE RENEWABLES. AND PALO VERDE IS GOING TO STAY ONLINE IN THIS MATTER.

Ted Simons: SO IF IT'S 50% RENEWABLE BY 2030, AND NUCLEAR ENERGY IS JUST SIMPLY NOT VIABLE, PALO VERDE STAYS OPEN, AND DOES WHAT?

Dylan Sullivan: YEAH, SO I'M -- WHAT -- WHAT WE FIND IS THAT PALO VERDE STAYS OPEN UNDER THIS INITIATIVE. THAT -- IN 2032 WHEN YOU LOOK AT APS'S ENTIRE POWER PLANT FLEET, PALO VERDE ONLY COMPRISES 9% OF THEIR TOTAL POWER PLANT CAPACITY IN 2032. THIS IS FROM A PLAN THAT THEY FILED AT THE ARIZONA CORPORATION LAST YEAR. AND SO RENEWABLES WOULD MEET, YOU KNOW, A LARGE PORTION OF-- OF ELECTRICITY NEEDS, BUT THE KEY IMPACT OF THE BALLOT MEASURE IS THAT APS WOULD NOT BUILD A BUNCH OF NEW NATURAL GAS PLANTS, WHICH IS WHAT THEY WANT TO DO. THAT'S THE PLAN THEY FILED. THEY WANT TO BUILD -- BASICALLY WITH TUCSON ELECTRIC POWER, WHEN YOU ADD THOSE -- THEIR APPS TO THE COMMISSION TOGETHER, THEY WANT TO BUILD 1.5 TIMES THE CAPACITY OF PALO VERDE IN NATURAL GAS. AND THIS INITIATIVE WOULD SAY, YOU KNOW, WE REALLY WANT TO GO AFTER THE CHEAPEST AND CLEANEST ENERGY RESOURCE, RENEWABLES LIKE SOLAR AND WIND AND NOT BUILD THAT BIG SLUG OF NATURAL GAS.

Ted Simons: BUT, AGAIN, WE'RE TALKING ABOUT WHAT THE CONCERN IS, AND THAT IS THE CONCERN THAT PALO VERDE IS SHUTTERED, AND IF THAT HAPPENS, THE CONCERN WOULD BE ARIZONA ENERGY PORTFOLIO IS DESTABILIZED. IS THAT NOT A CONCERN?

Dylan Sullivan: IT’S NOT A CONCERN. I THINK I GUESS THE REAL CONCERN IS THERE ARE $488 MILLION IN ANNUAL PROFITS. AND, YOU KNOW, THEY HAVE LAID OUT WHAT THEIR PLAN IS. THEIR PLAN IS MORE EXPENSIVE THAN THE RENEWABLE ENERGY FUTURE. WE SU-- WHEN WE DO OUR ANALYSIS, WE FIND THAT THE ELECTRICITY SYSTEM IS GOING TO COST BASICALLY $4 BILLION LESS BETWEEN THE YEARS 2020 AND 2040 AS A RESULT OF THIS MEASURE. AND THAT’S BECAUSE THE RENEWABLES ARE JUST CHEAPER THAN THINGS THAT APS WANTS TO DO

Ted Simons: SO IF PALO VERDE BECOMES BURDENSOME, BECOMES TOO COSTLY AND TOO LOSTLY TO MAINTAIN, YOU SAY IT WILL STILL STAY OPEN.

Dylan Sullivan: WELL, I THINK WHAT I'M DISAGREEING WITH APS ON HERE, IS THAT PALO VERDE IS GOING TO SOMEHOW BE NOT USEFUL IN THIS RENEWABLE ENERGY FUTURE. ALL OF THE ANALYSIS THAT WE HAVE DONE AND THAT OTHERS HAVE DONE HAS SAID THAT PALO VERDE IS A PLANT THAT’S VERY VIABLE, SO BASICALLY, APS IS THE ONLY ONE WHO IS SAYING IT ISN'T VIABLE. THERE IS SRP HERE IN ARIZONA AND OTHERS AROUND THE REGION, AND THEY ARE ALL SAYING THIS PLANT IS CHEAP, AND WE'RE GOING TO RELY ON IT IN THE FUTURE.

Ted Simons: THE OTHER OWNERS -- APS DOES NOT EVEN HAVE THE MAJORITY HERE.

Dylan Sullivan: IT REQUIRES UNANIMOUS CONSENT TO CLOSE THE PLANTAND ALL THE OWNERS OF COMPANY UTLITIES SAY -- GROUPS LIKE SOUTHERN CALIFORNIA, LOS ANGELES COMPARTMENT OF POWER, EL PASO'S ELECTRIC COMPANY RELIES ON PALO VERDE FOR 50% OF ITS ELECTRICITY NEEDS. THESE ARE NOT UTILITIES THAT ARE NOT GOING TO AGREE TO SHUT DOWN THE PLANT AND IT WONT EVEN MAKE SENSE FOR APS TO DO IT.

Ted Simons: DYLAN SULLIVAN, CLIMATE AND CLEAN ENERGY PROGRAM, GOOD TO HAVE YOU HERE. THANKS FOR JOINING US WE APPRECIATE IT.

Dylan Sullivan: THANK YOU.

Ted Simons: AND LATER IN THE SHOW, ARIZONANS ARE WILLINGLY DONATING THEIR BRAINS TO SCIENCE TO HELP WITH ALZHEIMER'S RESEARCH.


Dylan Sullivan: Senior Scientist, Western Region Climate and Clean Energy Program

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