On a 4-1 vote the Arizona Corporation Commission (ACC) last Tuesday approved nearly $21 million for six Arizona Public Service Co. (APS) non-residential demand-side management (DSM) programs mandated in the utility’s latest rate decision. Regulators said the funding includes financial incentives and assistance to customers in order to encourage energy-efficient building design and retrofit, covering industrial, commercial, small business, and school facilities.

Separately, residential programs by APS are under review by the ACC staff and will be brought to the commissioners for approval in the future, an ACC spokesperson said.

The four supporting commissioners, including ACC Chairman Jeff Hatch-Miller, praised the program and said its approval was one of the most crucial actions they can take as regulators. In contrast, lone dissenter Commissioner Mike Gleason stressed the decision was only an “interim” one, which he felt was important because he is skeptical about the utility’s ability “to execute these plans, and the societal benefits are questionable.”

In evaluating the merits of the six APS programs, the ACC said it looked at a “cost-benefit analysis that seeks to estimate the net societal benefits of such programs,” weighing the incremental benefits to society against the incremental cost of having the program in place. Societal costs are those affecting both customers and the utility, and the benefits include deferred generation capacity costs and avoided energy costs, along with various environmental and water-saving side benefits.

The six ACC approved programs, with budgeted funds are:

“This is the most ambitious program to reduce the energy burden in Arizona history, and perhaps the best program in the country,” said ACC Commissioner Marc Spitzer, a former chairman of the regulatory panel.

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