Sunset review of the Solar Energy Advisory Council

              SUBJECT: Sunset Review of the Solar Energy Advisory Council
ARIZONA STATE SENATE
RESEARCH STAFF
TO:
DATE:
THE JOINT LEGISLATIVE AUDIT COMMITTEE
REPRESENTATIVE JOHN HUPPENTHAL, CHAIRMAN
SENATOR ROBERT BLENDU, VICE CHAIRMAN
November 29,2004
Oi"t\IESt.f-}o
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KIM ~~TINEAU~
ASSISTANT LEGISLATIVE
RESEARCH ANALYST
Telephone: (602) 926-3171
Facsimile: (602) 926-3833
RECEIVED
DEC -3 2004
SPEAKER'S OFfiCE
Attached is the final report of the sunset review of the Solar Energy Advisory Council, which was
conducted by the Senate Commerce and House of Representatives Utilities and Municipalities
Committee of Reference.
This report has been distributed to the following individuals and agencies:
Governor of the State of Arizona
The Honorable Janet Napolitano
President of the Senate
Senator Ken Bennett
Senate Members
Senator Barbara Leff, Co-Chair
Senator Marsha Arzberger
Senator Robert Blendu
Senator Dean Martin
Senator Victor Soltero
Speaker of the House of Representatives
Representative Jake Flake
House Members
Representative John Nelson, Co-Chair
Representative Manuel Alvarez
Representative Andy Biggs
Representative Meg Burton Cahill
Representative Lucy Mason
Solar Energy Advisory Council
Office of the Auditor General
Department of Library, Archives & Public Records
Senate Majority Staff
Senate Research Staff
Senate Minority Staff
Senate Resource Center
House Majority Staff
House Research Staff
House Minority Staff
Chief Clerk
Senate Commerce and
House ofRepresentatives Utilities and Municipalities
Committee ofReference
SOLAR ENERGY ADVISORY COUNCIL
Background
The Joint Legislative Audit Committee (JLAC) assigned the sunset review of the Solar Energy
Advisory Council to the Senate Commerce and House ofRepresentatives Utilities and Municipalities
Committee of Reference (COR). Pursuant to A.R.S. § 41-2954, the COR completed the sunset
reVIew.
The Solar Energy Advisory Council (SEAC) began in 1975 as the Solar Energy Research
Commission (Commission), charged to develop a plan to meet the requirements of the National
Solar Energy Research Institute pursuant to the United States Solar Energy Research and
Demonstration Act of 1974. In 1987, the name ofthe Commission was changed to the Solar Energy
Advisory Council.
The purpose of SEAC is to give advice on matters relating to solar energy. Housed under the
Arizona Department ofCommerce's (ADOC) Energy Office, SEAC is required to assist and advise
ADOC on matters relating to the development and use of solar energy and other renewable energy
resources in Arizona. SEAC is funded by ADOC.
SEAC is also required to identify long-range programs that are feasible and require significant
technological development; identify solar energy technologies that are feasible and practical in the
short-term; encourage the cooperation and direct involvement of academic, business, professional
and industrial sectors with expertise or knowledge in solar energy technology; and make
recommendations on standards, codes, certification and other programs necessary for the growth of
solar energy use.
SEAC consists of 14 governor-appointed members, each serving three-year terms, and the chairman
of the Arizona Power Authority. Three members ofSEAC represent each of the state universities.
The remaining members have knowledge in specific solar energy technologies or represent a private
industry involved in the application ofsolar energy to commercial, industrial or residential uses. The
President of the Senate and the Speaker of the House of Representatives, or their representative,
serve as nonvoting, advisory members to SEAC. Members appointed by the Governor are eligible
for up to $30 per day for each day of attendance at meetings. The Governor selects the chairman of
SEAC from among the members.
A.R.S. § 41-3005.06 stipulates the SEAC is to terminate on July 1, 2005.
COR Sunset Review
The COR held one public hearing on Thursday, November 18, 2004, to review SEAC and take
testimony.
Mike Pasqualetti, Chair ofSEAC, gave a presentation on SEAC and its responsibilities and funding.
Discussion was held regarding the Energy Office ofADOC, its funding and staffing levels, and how
it relates to SEAC. The Director ofthe Energy Office and a staff member also testified.
COR Recommendations
The COR recommends that the Solar Energy Advisory Council be continued for ten years.
Attachments
1. Sunset report requirements pursuant to A.R.S. § 41-2954, subsections D and F
2. Meeting Notice
3. Minutes of Committee of Reference Hearing
KM/ac
August 24, 2004
Senator Barbara Leff
Arizona State Senate
1700 West Washington
Phoenix, AZ 85007
Dear Senator Leff:
On behalf of the Solar Energy Advisory Council, I herewith submit responses to the
sunset review process prescribed in Title 41, Chapter 27, Arizona Revised Statutes, and
as requested in your letter to me June 24, 2004.
I emphasized the past two years, and divided the report into two parts. Part I includes
responses to A.R.S. § 41-2954. Part II includes responses to the "additional questions". I
also have included copies of minutes for the past year. There is no requirement in our
statute for an annual report.
The following items in Part I are not applicable to the Council: Numbers 4,5,6, 7, 11,
12.
The following items in Part II are not applicable to the Council: numbers 2,5.
Part I
#1 - The objective and purpose in establishing the agency:
The legislature directed the council to:
• Assist and advise the director (Commerce/Energy) on matters relating to the
development and use of solar energy and other renewable energy resources including
recommendations for the utilization or disbursements of federal and state funds for
solar purposes.
• Encourage efforts by research institutions, local government institutions and
homebuilders in obtaining technical and financial support from the federal
government for their activities in solar and advanced alternate energy systems.
• Identify and describe the solar energy technologies that are feasible and practical in
terms of short-term application of retrofit, new construction and conservation projects
within five years.
• Identify and describe long-range programs that are feasible and require significant
technological development. Programs having similar technological gradients shall be
formulated to encompass the period of time from the present through the year 2020.
• Encourage the cooperation and direct involvement of academic, business,
professional and industrial sectors that are determined to have special expertise or
knowledge of solar energy technology.
• Make recommendations to the director on standards, codes, certifications and other
programs necessary for the orderly and rapid commercialization and growth of solar
energy use in this state for consideration by the appropriate jurisdictional bodies.
#2 - The effectiveness with which the Council has met its objective and purpose and the
efficiency with which it has operated.
• The Council receives requests for information, endorsements, and aid from the public
and the press corps
• There is an on-going exchange ofideas and information among the members of the
Council, and between the Council and the Energy Office.
• Other examples are contained elsewhere in this document
#3 - The extent to which the Council has operated with the public interest.
• The Council has provided a forum or discussion on renewable energy
• The Council has invited outside speakers and has made presentation to state officials
• The Council members have written letters, supported legislation, given testimony,
met with community leaders, made presentations at numerous forums, developed
proposals for funding, and provided educational materials
• The council assists the Energy Office in outreach efforts with the public.
#8 - The extent to which the Council has addressed deficiencies in its enabling statues
that prevent it from fulfilling its statutory mandate.
• The Council has made many presentations to promote dialogue with several
appropriate government agencies and directors, and to provide a liaison function with
other agencies and the public. This has included elected officials, ADEQ, and the
Arizona School Facilities Board, and several other organizations within Arizona and
without.
• The council has recommended for appointment to Council representatives of
organizations that have similar missions and that are charged with promoting solar
and renewables. These recommendations have been made in an attempt to include a
diverse group with differing backgrounds to provide inputfrom as many points of
interest as possible.
• Attempts by the Council have failed to attract representation from the State Senate,
the State House, or the Arizona Power Authority, despite that these appointments are
called for in the enabling legislation.
#9 - The extent to which changes are necessary in the laws ofthe Council to adequately
comply with these factors.
• Representation on the Council should be made explicit, beyond the present required
representation. Such stipulation could, for example, call for one representative from
each of the follows:
a. electric utilities (rotating term)
b. urban (rotating term)
c. rural
d. municipality
e. tribal
f. solar hot water community
g. photovoltaic community
h. "green building" community
~ .1
..
1. Civic/environmental organization
j. Wind and/or geothennal community
• One path toward a tightened relationship between the Council and the Office ofthe
Governor would be for the Chair ofthe Council and the membership ofthe Council to
be eligible for reappointed with a change in Governor, with the stipulation that 50%
of the Council would be subj ect to replacement at that time.
#10 - The extent to which the tennination of the Council would significantly hann the
public health, safety or welfare.
• The volunteer council, appointed by the Governor, receives no state funding, and is
Arizona's only official board or commission to promote renewable energy
• Tenninating the Council would leave the state with no official group that can
represent, advise and assist the state's participation in the development of renewable
energy.
• Reduced attention to renewable energy in Arizona would have the following negative
side effects: Arizona (which has the greatest solar energy resource) would receive a
stain on its reputation as a forward-looking state. To the extent that conventional
energy sources were used instead of renewable, environmental quality would suffer.
Greater reliance on renewable energy development in the state would increase energy
surety, including emergency preparedness and supply reliability. Expanding the
renewable energy industry in Arizona has potential for substantial positive impacts on
economic development.
• The Council has helped draft and introduce numerous bills over the years, and it is the
state's only independent group that has representation covering a wide geographical
area and a variety oftechnologies. Tennination ofthe Council would eliminate this
diverse group from representing a wide variety of renewable energy interests
throughout the state that would otherwise not have representation. (Legislation has
included bills that would prevent homeowners' associations from arbitrarily
prohibiting rooftop solar energy equipment; requiring new homes to contain
plumbing that would allow for simple installation of a solar water heater; encourage
energy efficiency in new construction and in state buildings.)
Part II
# 1 - Describe the role and function ofthe Council including major activities/projects,
accomplishments and obstacles to success.
• Advisory to the Arizona Department of Commerce Energy Office
• Helped craft legislative bills (e.g. HB2324, HB2526, HB2527 & HB2528, HB2613)
• Met with and advised Governor Hull on solar energy prospects for Arizona
• Contributed significantly to the Battelle study, commissioned by the Department of
Commerce
• Prepared talking points on solar energy for Governor Napolitano
• Made presentation to:
a. Steven Owens, ADEQ
b. William "Bill" Bell, Executive Director, Arizona School Facilities Board
• Hosted presentations by:
a. Craig Cox, Executive Director, Interwest Energy Alliance (Denver)
b. Arizona World's Fair representatives
c. Michael Neary, AriSEIA
• Chair made presentations and attended meetings as follows (at no cost to EO):
a. Mexico City
b. Jerusalem
c. Scottsdale (2)
d. New Orleans
e. Denver
f. Reno
g. Renewable Energy Conference
h. Phoenix
• The following are projects that originated with the SEAC
a. Civano project (sustainable housing development)
b. Annual Solar Boat Race, held on Town Lake, originated with the SEAC
c. Arizona Solar Center (www.AzSolarCenter.org)
d. Solar Video (aired on KAET) (an update of the 1988 video)
e. Solar Kiosk (a traveling exhibit)
f. Meeting with Gov. Hull (512002) resulted in a media campaign for solar that
included press releases, CD-Rom Solar Tour ofArizona (that is now on the
Solar Center), Op-ED piece, and a proclamation for 2002 October being solar
month.
g. Campaign was to promote the solar home tours.
h. As the number one priority identified by the SEAC in July 1999, the Arizona
Energy Office applied for and received a Million Solar Roofs grant in 2000 to
develop a traveling exhibit for solar energy. The exhibit was completed in
April2001. OverlO,OOO people have used one or more of the exhibits
interactive programs. The display as been on location at the Arizona State
Capitol, Arizona Science Center, Arizona Historical Museum (Papago Park),
Coconino County Fair (Flagstaff), Maricopa County Fair (Phoenix), Camp
Verde Home Show (Camp Verde), City of Scottsdale Building Permit Office,
Mustang Library (City of Scottsdale) and the Hot Topics - cool solutions
Conference (Tucson).
1. The other two top priorities identified by the Council involved the Arizona
Solar Center. One dealt with developing information for the Center, and the
other was for promotion. In 2002 the Arizona Energy Office secured a grant
for $22,000 for the Arizona Solar Center to develop materials for the website.
The Energy Office also has committed $2,500 toward the operation ofthe
website. Energy Office staff continue to develop material for posting on the
site -- the most recent being the Solar Benefit Model. The Solar Benefit
Model is a series ofpages that allow a consumer to calculate the approximate
energy/cost savings they will realize by installing a solar water heater. The
model produces specific information for three locations in Arizona: Phoenix,
Tucson, and Flagstaff. All calculations are based on SRCC ratings for
equipment and solar water heating loads for each ofthe three locations. The
consumer must enter their own personal data (tax bracket, loan terms,
purchase price, etc ....) and their utility rate (standard rates for APS, TEP
and SRP are provided for input).
J. In the fall of2oo3, the solar short videos that were produced as part ofthe
kiosk/traveling exhibit were put iDto a digital format and uploaded to the solar
center.)
#3 • An identification ofthe problem or the needs that the Council is intended to address.
a. Increase development and utilization of all renewable energy resources
b. Increase public awareness of the benefits and affordability of many renewable
energy technologies
c. Encourage the support and expansion of renewable energy research and
development
d. Provide a forum and expertise for the development and evaluation of
programs and policies for renewable energy
#4 • Astatement, to the extent practicable, in quantitative and qualitative terms, of the
objectives of the Council and its anticipated accomplishments
a. See throughout this document
#6 - An assessment ofthe consequences of eliminating the Council or of consolidating it
with another agency.
a. Would send the wrong message about Arizona's support for renewable energy
b. Would discourage further economic development in the area of renewable
energy
c. Would yield potential primacy in renewable energy development (especially
solar) to neighboring states and foreign countries
d. Would eliminate an essential source ofpublic information and education on
renewable energy.
Should you need any additional information, please contact me at ~asqualetti@asu.egu,
or 480-965-4548.
Sincerely yours,
~M4'M . · slt-'
Martin J. Pasqualetti~
Chair
Arizona Solar Energy Advisory Council
5
Interim agendas can be obtained via the Internet at http://www.azleg.state.az.us/lnterimCommittees.asp
ARIZONA STATE LEGISLATURE
INTERIM MEETING NOTICE
OPEN TO THE PUBLIC
SENATE COMMERCE AND HOUSE OF REPRESENTATIVES
UTILITIES AND MUNICIPALITIES COMMITTEE OF REFERENCE
FOR THE SUNSET HEARING OF THE SOLAR ENERGY ADVISORY COUNCIL
Date:
Time:
Place:
Thursday, November 18, 2004
12:00 p.m.
Senate Hearing Room 1
AGENDA
1. Call to Order
2. Opening Remarks
3. Presentation by the Solar Energy Advisory Council
4. Public Testimony
5. Discussion
6. Recommendations by the Committee of Reference
7. Adjourn
Members:
Senator Barbara Left, Co-Chair
Senator Marsha Arzberger
Senator Robert Blendu
Senator Dean Martin
Senator Victor Soltero
11/1/04
BM:nd
Representative John Nelson, Co-Chair
Representative Manuel Alvarez
Representative Andy Biggs
Representative Meg Burton Cahill
Representative Lucy Mason
Persons with a disability may request a reasonable accommodation such as a sign language interpreter, by contacting the
Senate Secretary's Office: (602)926-4231 (voice). Requests should be made as early as possible to allow time to arrange the accommodation.
ARIZONA STATE LEGISLATURE
SENATE COMMERCE AND HOUSE OF REPRESENTATIVES
UTILITIES AND MUNICIPALITIES COMMITTEE OF REFERENCE
FOR THE SUNSET HEARING OF THE SOLAR ENERGY ADVISORY COUNCIL
Minutes of the Meeting
Thursday, November 18, 2004
12:00 p.m., Senate Hearing Room 1
Members Present:
Senator Barbara Leff, Cochair
Senator Robert Blendu
Senator Dean Martin
Senator Victor Soltero
Members Absent:
Senator Marsha Arzberger
Representative John Nelson, Cochair
Representative Manuel Alvarez
Representative Andy Biggs
Representative Meg Burton Cahill
Representative Lucy Mason
Staff:
Brandy Martin, Senate Commerce Committee Research Analyst
Kimberly Martineau, Senate Commerce Committee Assistant Research Analyst
Todd Sanders, House of Representatives Research Analyst
Senator Leff called the meeting to order at 12:03 p.m. and attendance was noted.
Martin Pasqualetti, Chairman, Arizona Solar Energy Advisory Council (Council),
explained that there are 14 members on the Council. He mentioned that the Council deals
with all renewable energy, which includes wind power and geothermal development, as
well as solar and biomass energy.
Mr. Pasqualetti referred to an Arizona Highway Magazine article regarding solar energy
that was published in August, 1975. He pointed out that it was recognized long ago that
solar power was plentiful in Arizona. He suggested that by covering only one-tenth of the
Goldwater Bombing Range with solar tanks, Arizona could generate enough electricity for
the state. Arizona has more solar energy than any other state in the nation. He stated that
he feels that solar energy is the most important, significant, and valuable natural resource
in Arizona and if properly developed, it could be an enormously effective economic
development engine.
Mr. Pasqualetti noted that Arizona has made some substantial strides, explaining that
Tucson Electric Power, Arizona Public Services (APS), and Salt River Project (SRP) are
installing solar facilities on residential homes. The portfolio standards and the money
available through the surcharge, as well as the advocacy of the Council, have moved the
State in the right direction.
Senate Commerce and House of Representatives
Utilities and Municipalities Committee of Reference
For the Sunset Hearing of the Solar Energy Advisory Council
November 18, 2004
Page 1
Mr. Pasqualetti mentioned that the Council is not a line item in the budget, rather it
operates from overcharge money. The Council has represented Arizona in the solar
industry by making itself available for consultation and as a clearing house for information
about solar energy for several years. He suggested that the Council should be a line item
in order to have the funds to encourage facilities to move to Arizona. There is no one in
the Department of Commerce (DOC) dedicated exclusively to solar energy.
In response to Senator Leff, Mr. Pasqualetti replied that the Council's recommendations
are given to the director of the DOC Energy Office. He noted that the Council can give
advise, support solar, and raise the visibility of solar.
In response to Senator Soltero, Mr. Pasqualetti replied that a company (Kyocera) planned
to put a solar facility in Scottsdale; however, they were unable to get any cooperation from
DOC. Therefore, Kyocera located their facility elsewhere.
Mr. Pasqualetti mentioned that he feels the line item in the budget should represent an
individual within DOC who is advocating solar, since it is an important and large economic
development engine for Arizona. In response to Senator Leff, Mr. Pasqualetti replied that
the Energy Office at DOC previously employed approximately 50 people and now there
are only 17.
In response to Representative Burton Cahill, Mr. Sanders stated that he feels the
downsizing of employees at the Energy Office was related to the alternative fuel issue.
The Energy Office increased staff to handle the enormous workload produced due to the
alternative fuels program that peaked in 2001. Subsequently, that program was cancelled
and many of the employees were transferred to other agencies.
In response to Senator Leff, Mr. Sanders replied that the oil overcharge monies have
decreased over the past few years.
Jim Arwood, Energy Office, DOC, explained that the Energy Office increased staff in the
late 1980s. In 1987, Arizona received a lump sum overcharge settlement from Exxon Oil.
Since that date, several other settlements were also received. In the 1970s, consumers
were overcharged at the gas pumps that led to a nationwide settlement. These various
settlement monies funded the Energy Office and its programs. In the early 1990s, the
Energy Office had approximately 54 staff members, with 12 of those employees dedicated
to solar energy issues. In the past two years, 75% of the settlement monies were used to
offset budget shortfalls, and as the money has decreased over the years, so has the staff.
Currently, the remaining oil overcharge money is used to help leverage grants from the
federal government to sustain programs.
Mr. Arwood added some information about the company that wanted to move a
manufacturing facility to either Phoenix, San Diego, or Mexico. He pointed out that the
DOC director and deputy director visited with representatives from Kyocera, and DOC sent
a member to Japan to visit with Kyocera. However, Kyocera eventually located their
facility in Mexico. . I ,,,
Senate Commerce and House of Representatives
Utilities and Municipalities Committee of Reference
For the Sunset Hearing of the Solar Energy Advisory Council
November 18, 2004
Page 2
'it
Mr. Arwood indicated that DOC does support the continuance of the Council as they are a
valuable asset to the Energy Office. He noted that approximately 40% of his time is spent
on solar energy. In years past, he spent 100% of his time on solar energy; however,
because of attrition, he has had to take on other responsibilities.
In response to Representative Nelson, Mr. Arwood agreed that wages were a determining
factor in Kyocera selecting Mexico for their facility.
Tom Hansen, Vice President, Tucson Electric Power, testified in support of continuing
the Council. He pointed out that Arizona has watched California, Japan, and Germany
implement solar development programs that are far in advance of what Arizona has been
able to do. He suggested that to allow the Council to sunset at this time would be
detrimental towards developing a long-lasting, sustainable solar program. In time, they
hope to expand the coordination between the Corporation Commission, the Legislature,
and the Governor's office to bring solar energy development to the State. He emphasized
that Arizona has the best resources, land area, availability, and the will to move the solar
energy industry forward.
Mr. Pasqualetti added that individuals in Mexico, Israel, and Japan have stated that
Arizona is not actively supportive of solar energy. He mentioned that Arizona has the
largest solar energy resource; however, only 12 megawatts are being developed.
George Seitts, Director, Energy Office, DOC, testified in support of continuing the
Council, which has been in business for 30 years. In response to Senator Leff, Mr. Seitts
replied that he will guarantee that DOC will work on improving the image of Arizona
regarding solar energy.
Representative Nelson commented that the Council includes a group of individuals with
expertise in the solar energy field. He suggested that Arizona has enough solar energy to
share with the world.
Representative Nelson moved to continue the Solar Energy Advisory
Council for ten years. The motion CARRIED by a voice vote.
Attached is a list of the individuals who registered their position on the continuation of the
Council (Attachment 1).
There being no further business, the meeting was adjourned at 12:32 p.m.
Respectfully submitted,
~
Carol Dager
Committee Secretary
(Tapes and attachments on file in the Secretary of the Senate's Office/Resource Center, Room 115.)
Senate Commerce and House of Representatives
Utilities and Municipalities Committee of Reference
For the Sunset Hearing of the Solar Energy Advisory Council
November 18, 2004
Page 3