Title
MOU with APS on Climate Action, Renewable Energy and Electric Vehicles (Ordinance S-46863)
Description
Request to authorize the City Manager, or designee, to execute Memorandum of Understanding (MOU) between the City of Phoenix and Arizona Public Service Company (APS) that commits to a five-year collaboration developing joint actions in support of common sustainability goals, with a particular focus on actions related to renewable energy, electric vehicles, tree planting and local air quality. There is no financial commitment associated with this item.
Report
Summary
In January 2020, APS announced a commitment to produce 45 percent of its energy from renewable sources by 2030 as well as a goal of carbon-neutrality by 2050. Given the alignment between the City and APS sustainability goals, the City approached APS seeking its interest in a five-year MOU with a commitment to produce an annual work plan to accelerate action towards our common sustainability goals.
In many other communities, cities with ambitious climate-related goals have bypassed their local utility by enabling community choice aggregation (CCAs) in order to procure the energy needs of their residents direct from the market. In other cases cities have sought to municipalize the utility in their local jurisdiction. It is common for cities and utilities to have a poor working relationship when their goals are not aligned. However, an emerging strategy is to leverage the extensive experience of the utility as an energy provider and establish a formal MOU to request the utility's assistance in achieving ambitious city aspirations and goals. For example, Salt Lake City recently established an MOU with its utility to work together in changing state policy to favor renewable energy. Likewise, Xcel Energy, active in nine U.S. states, has altered its past opposition to renewable energy and is now actively seeking MOUs with municipalities in its service territory to achieve carbon neutrality.
The Xcel Energy MOU was used as the template for the MOU now being proposed by the City of Phoenix and APS.The proposed non-binding MOU, included as Attachment A, is intentionally broad in scope, to include support for social, economic and environmental sustainability goals, and will prioritize actions in vulnerable communities. Potential joint actions may include utility-scale solar projects, community-scale solar in low income communities, electric vehicle (EV) and EV charging programs, new microgrids at City facilities, tree planting projects, and energy storage.
APS has expressed a strong interest in this MOU, and is now also encouraging other cities to establish similar MOUs. The City of Flagstaff, for example, recently signed an MOU modeled after the proposed City of Phoenix MOU, to seek APS support for its climate-related goals.
Contract Term
The MOU will remain in effect for five years from the date of signing, but could be cancelled with 60 days notice by either party.
Financial Impact
There is no financial impact associated with this item.
Department
Responsible Department
This item is submitted by Deputy City Manager Karen Peters and the Office of Sustainability.