PHOENIX - On Thursday, July 1, 2021, Arizona Corporation Commission (“ACC”) Chairwoman Lea Márquez Peterson filed a letter expressing concerns that entities engaged in the manufacture and production of solar panels in the United States may have been benefitting from the use of forced labor in China. (Letter)

 Chairwoman Márquez Peterson has asked utilities regulated by the Commission to give the Commission and the general public assurances that no solar panels utilized in the production of electricity in Arizona have had any ties to forced labor in China and that no entities that have been engaged in the development of renewable energy projects or policies in Arizona have taken advantage of the abuse of ethnic and religious minorities in China. 

 Chairwoman Márquez Peterson believes decisive action by the Commission is needed on this matter and has called on her fellow commissioners to consider the steps they should take from here in order to protect the public’s interest, going forward. 

 Background: On June 13, 2021, the Group of Seven (“G7”) met in Carbis Bay, England, and denounced the use of forced labor in the global supply chain for solar energy. (G7 Summit Communication). 

 On the same day, the White House expanded on the G7’s statement and emphasized that the issue was specific to forced labor in China. (White House Statement)

 On June 24, 2021, the White House issued an announcement listing several actions the United States was taking against Chinese entities that were found to be engaged in or facilitating the use of forced labor in the global supply chain for solar energy. (List of Actions)

 Actions by the U.S. against China included bans on imports of solar panels from specific entities in China and bans on silicon products made with forced labor in China that are used in the production of solar panels globally. 

 Issue: The U.S.’s actions against China could reveal inconvenient truths about how the cost of solar has been able to drop so dramatically over the last several years or how certain solar energy advocates may have  intentionally or unintentionally benefitted from the use of forced labor as a way to keep the costs of production low. 

 The bans on imports from China could also make it challenging for utility regulators in states such as Arizona to continue promoting solar if the true costs of procuring panels is revealed to be substantially higher than the regulators had previously imagined. 

 These issues pose a particularly unique challenge to Arizona because, according to the Solar Energy Industries Association, Arizona ranks third in the nation for installed solar capacity at over 5,000 MW of installed solar capacity to-date. (SEIA.org) And, according to the U.S. Energy Information Administration, “plentiful sunshine gives the entire state some of the nation's greatest solar energy resources.” (EIA.gov)

 Chairwoman Márquez Peterson’s Letter: After reviewing the announcement from the White House, Chairwoman Márquez Peterson filed a letter with Arizona’s largest regulated electric utilities, Arizona public Service Company (“APS”) and Tucson Electric Power (“TEP”), expressing concerns with the revelations and disappointment that entities engaged in production of solar panels may have been using forced labor to gain an unfair advantage in the U.S. energy market. 

 “As a mother and citizen of Arizona, preserving human life and dignity are paramount to my values,” Chairwoman Márquez Peterson said. “As a regulator, using forced labor to gain an unfair advantage in the marketplace by producing cheap solar panels is unacceptable and incompatible with our constitutional duties.”

 “As we continue to promote the use of clean energy resources in Arizona, we must ensure that no solar panel in Arizona has any ties to forced labor in China,” said Márquez Peterson. 

 Action Items: Chairwoman Márquez Peterson asked APS and TEP to disclose whether their respective solar energy resources can be traced back to the companies listed on the White House’s ban and, if so, to disclose the extent of those ties. 

 Chairwoman Márquez Peterson also asked APS and TEP to explain how they will eliminate those ties, going forward, and ensure that no future renewable energy resources in Arizona can be tied in any way to forced labor, domestic or abroad. 

 Based on the responses from the utilities, Chairwoman Márquez Peterson may place an item on a future open meeting to discuss any issues and consider options and potential next steps that the Commission can take. 

 Links: 

 A link to Chairwoman Márquez Peterson’s letter can be found here: Link. 

 A link to the White House’s list of actions taken against China can be found here: Link.