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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
decommissioning; solar energy; standards; fund
Purpose
Prescribes requirements for solar energy power plants relating to financial assurance, liability insurance, the transfer or sale of a solar energy power plant or special use permit, the curing of damage if part of a solar energy power plant is damaged and the decommissioning and site restoration plan for a solar energy power plant. Establishes the Solar Energy Power Plant Site Remediation Fund (Fund).
Background
The Arizona Power Authority (APA) was formed in 1944 as a result of the federal Boulder Canyon Project Act of 1928 that allocated a portion of power produced from the Hoover Dam. Power from the Hoover Dam first became available in 1936, and at that time, Arizona had not developed an infrastructure and methodology to receive and distribute allocated power. Subsequently, the Legislature established the APA, charging the APA with the responsibility of acquiring and marketing Arizona's share of Hoover Dam power (APA).
The APA must encourage activities deemed by it to be feasible for the production or storage of electric power or energy from solar energy, nuclear energy or geothermal energy, and may bargain for, take and receive such energy or the electrical power generated therefrom in its own name on behalf of Arizona. The APA may acquire by lease, purchase or any other means, real property owned by the state or federal government and may dispose of such property by sale, lease or other means to persons engaged in projects deemed by the authority to be feasible for the production or storage of electric power or energy from solar, nuclear or geothermal energy, including projects for research and development in such fields. For the purpose of making such power available to marketing areas of Arizona, the APA may acquire or construct and operate electric transmission systems, standby or auxiliary plants and facilities and generate, store, produce, sell at wholesale, transmit and deliver such electric power to qualified purchasers, and if conducive to efficiency and convenience, may enter into agreements for interconnection or pooling with projects, plants, systems or facilities of other distributors of electric power (A.R.S. §§ 30-121 and 30-123).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Decommissioning and Site Restoration for Solar Energy Power Plants
1. Allows a city, town or county to adopt decommissioning standards for a solar energy power plant that is located in the city, town or county.
2. Requires an applicant for a solar energy power plant to comply with the requirements or procedures for a solar energy power plant that are adopted by the city, town or county in which the solar energy power plant is to be located.
3. Specifies that the outlined requirements relating to solar energy power plants do not apply to:
a) a solar energy power plant if the city, town or county in which the solar energy power plant is located has adopted a local decommissioning and site restoration standard or has approved a decommissioning plan for a facility before the commencement of the solar energy power plant's operation; and
b) a distributed energy generation system or a solar energy power plant that before the general effective date:
i. was constructed or installed or in operation;
ii. has submitted or received a permit from a city, town or county; or
iii. has advanced to the facilities study stage of an interconnection process.
4. Requires a solar energy power plant owner or operator to provide a city, town or county where the solar energy power plant is located with a decommissioning and site restoration plan.
5. Requires the decommissioning and site restoration plan to state how the solar energy power plant will be decommissioned and how the site will be repowered or restored and to include:
a) an estimate of the cost of decommissioning the solar energy power plant and repowering or restoring the site, net of salvage value;
b) the financial resources that the solar energy power plant will use to accomplish decommissioning and restoration; and
c) a timeline for the decommissioning and site restoration or repowering.
6. Requires an individual who is qualified to estimate decommissioning and site restoration or repowering costs and salvage value for the solar energy power plant to make the estimate.
7. Stipulates that an individual is qualified to conduct the prescribed estimate if the individual:
a) is registered professional engineer who is independent from the solar energy power plant owner and the city, town or county; or
b) as agreed to by the solar energy power plant owner and the city, town or county, has other experience in decommissioning solar energy power plants of the type in question and that experience is suitable to the solar energy power plant owner and the city, town or county.
8. Requires a solar energy power plant owner or operator to remove a solar energy power plant and restore a solar energy power plant site unless the landowner or a city, town or county determines that an outlined requirement relating to restoration is not necessary.
9. Allows a solar energy power plant owner to petition a permitting county to amend a decommissioning plan.
10. Requires a county to allow a solar energy power plant owner to amend a decommissioning plan as necessary to account for:
a) advancements in available technology;
b) advancements in decommissioning, salvaging or repowering processes or procedures; or
c) the best interest of the city, town or county, the landowner or the solar energy power plant owner.
11. Requires the removal of a solar energy power plant to:
a) include all above ground components, including solar arrays, transformers, above ground collection cables and poles and fencing; and
b) comply with the following:
i. foundations and buried project components, other than buried collection lines, must be removed to a depth of at least 36 inches or as prescribed by the city, town or county or as negotiated with the landowner;
ii. buried collection lines must be removed to a depth of 36 inches; and
iii. removal activities must be completed in accordance with the timeline in the decommissioning plan.
12. Allows collection lines below a depth of 36 inches to remain in place.
13. Requires the restoration of each site to include:
a) minimizing ground disturbance and using commercially reasonable efforts to restore the site to its original ground contours, if possible, or coordinating with the landowner to restore the site;
b) reasonably restoring and reestablishing disturbed on-site soils and vegetation by using native seed mix and proper soil nutrients, including fertilizer and lime, if necessary, to provide and sustain growth or in coordination with the landowner to allow desired vegetation to be planted or returning the on-site soils and vegetation to their original conditions;
c) after the decommissioning of the site is complete:
i. restoring paved roads that existed before the project was constructed to the original condition of the paced roads; and
ii. leaving roads or other improvements in place with the landowner's consent;
d) allowing access roads, fencing, associated drainage improvements and any other residual minor improvements to remain with the landowner's written consent; and
e) removing and remediating any hazardous materials and waste.
14. Requires the city, town or county, after providing reasonable notice to the property owner and project owner, to enter the site to effect or complete decommissioning pursuant to the decommissioning plan.
15. Specifies that after the solar energy power plant owner or operator completes the decommissioning of a solar energy power plant and restoration of the solar energy power plant site:
a) the solar energy power plant owner or operator must notify the city, town or county within 30 days after the date on which the owner or operator completes decommissioning and restoration; and
b) the city, town or county must certify to the solar energy power plant owner or operator that decommissioning and restoration is complete within 30 days after the date on which the city, town or county receives notice from the solar energy power plant owner or operator.
16. Specifies that after the city, town or county certifies that decommissioning and restoration is complete:
a) the solar energy power plant owner or operator is released from any prescribed obligation relating to solar energy power plants; and
b) the city, town or county must return or release any remaining statutorily prescribed financial assurance requirement.
Transfer or Sale of Solar Energy Power Plants
17. Prohibits the transfer of a solar energy power plant or special use permit or the sale of the entity owning the solar energy power plant from occurring without written acceptance by the transferee of the transferor's outlined obligations.
18. Specifies that a transfer or sale does not eliminate the liability or responsibility of an applicant or of any other party for acts or omissions occurring before the transfer or sale.
19. Allows the city, town or county, for a transfer of unit ownership, to assess the amount of any outlined financial assurance.
Curing of Damaged or Deficient Solar Energy Power Plants
20. Requires a solar energy power plant owner or operator, if a part of the solar energy power plant is damaged or if the solar energy power plant violates a permit condition imposed by a city, town or county, to cure any damage or deficiency within 90 days after written notice from the city, town or county.
21. Requires a solar energy power plant owner or operator, if it is not reasonably possible for the solar energy power plant owner or operator to cure the damage or deficiency within 90 days after receiving the written notice, to provide the city, town or county with a plan to cure the damage or deficiency as soon as reasonably possible.
22. Requires an applicant or its successors or assigns, without any further action by the city, town or county and if a solar energy power plant remains nonfunctional or inoperative for a continuous period of at least one year, to remove the system and restore the site at its own expense.
23. Requires a solar energy power plant owner or operator, if it is not reasonably possible for the solar energy power plant owner or operator to repower or restore the solar energy power plant to be functional or operational within one year, to provide the city, town or county with a plan to restore the solar energy power plant to be functional or operational as soon as reasonably possible.
Financial Assurance
24. Requires a solar energy power plant owner or operator, in accordance with the following schedule, to maintain financial assurance, including in the form of a bond, parent guarantee or irrevocable letter of credit, in an amount equal to the cost to decommission the solar energy power plant and restore the solar energy power plant site, net salvage value:
a) an initial posting by the current owner or operator on or before 10 years after the commercial operation date of the solar energy power plant and not more than 35 percent of the entire decommissioning cost;
b) intermediary posting occurring not less frequently than one posting every five years after the date of the initial posting; and
c) a final posting on or before 25 years after the commercial operation date of the solar energy power plant, such that the total amount posted is equal to the entire decommissioning cost calculated.
25. Requires the solar energy power plant owner or operator to update the cost estimate every five years to ensure an accurate estimation of costs associated with decommissioning, equipment value and site restoration, adjusted for inflation.
26. Specifies that a solar energy power plant owner or operator is not required to provide duplicative financial assurance for decommissioning and site restoration.
27. Deems that an owner or operator, if the owner or operator has provided financial assurance for decommissioning and site restoration pursuant to a lease agreement with a landowner or in agreement with another state or federal agency or a city, town or county, is exempt from the prescribed financial assurance requirements to the extent that the assurance covers estimated costs that are calculated.
28. Requires a city, town or county to deposit any monies that are collected from a solar energy power plant in the Fund.
29. Allows a city, town or county to use the monies deposited in the Fund for the costs associated with decommissioning and remediation of a solar energy power plant site.
30. Requires a solar energy power plant owner, if the solar energy power plant owner sells the solar energy power plant to a public service corporation, utility or another solar energy power plant owner, to provide a notice of the sale to the city, town or county.
31. Requires a city, town or county, within 15 days after receiving the outlined notice, to waive the prescribed requirements relating to financial assurance and return or release any financial assurance provided to the city, town or county to the solar energy power plant owner.
32. Requires the successor owner or operator, after a transfer of ownership and as a condition of the transfer to post financial assurance that is in an amount and form at least equal to the financial assurance currently held by the city, town or county from the previous owner.
33. Prohibits the city, town or county from releasing or returning the previous owner's financial assurance until the successor owner has fully replaced the assurance value.
34. Requires the successor owner, on completion of the outlined replacement, to assume the decommissioning schedule of the transferor.
Liability Insurance
35. Requires a solar energy power plant owner or operator to maintain an insurance policy that includes coverage, with a limit of $1,000,000 per occurrence and $2,000,000 in the aggregate, of any reasonable liability of the city, town or county where the solar energy power plant is located related to the construction and operation of the solar energy power plant.
36. Requires a solar energy power plant owner or operator to immediately provide written notice of any change in the outlined insurance policy to the city, town or county where the solar energy power plant is located.
Fund
37. Establishes the Fund consisting of monies collected from outlined financial assurance.
38. Requires the Executive Director of the APA to administer the Fund.
39. Specifies that Fund monies are continuously appropriated and are exempt from lapsing.
Miscellaneous
40. Becomes effective on the general effective date.
House Action
NREW 2/12/26 DPA 6-4-0-0
3rd Read 3/10/26 51-4-4-0-1
Prepared by Senate Research
March 20, 2026
SB/hk