Additional reasons for a good decision regarding electrical deregulation
Published: September 30, 2013 at 8:26 am
The Corporation Commission recently closed the docket considering electric deregulation in Arizona. The conclusion was good for Arizona for a number of reasons.
The rise of Phoenix over the past 100 years is directly linked to strategic decisions and investments in the key resources of water and power. Without these essential resources, Phoenix could not have become one of the nation’s leading metropolitan areas of innovation and growth.
Our early civic leaders put into place the methodologies for the reliable delivery of water and power to our region, for our current use as well as our future needs. Our water delivery system uses a great deal of electricity to transport water and pressurize our waterlines. When it comes to electricity, these leaders created a program that focused on four essential elements:
1. Production (power plants).
2. Distribution (power lines).
3. Maintenance (to ensure reliability).
4. Expansion (investment for future growth).
The comprehensive management of these four elements has created our stable and dependable electric supply. Each of these four elements is dependent on one another and in essence is an electrical ecosystem. Recognizing the significant amount of capital associated with this electrical ecosystem and the need for long-term strategic planning, our civic leaders granted SRP, APS and TEP geographical service areas of responsibility.
To provide proper checks and balances, these public utilities are regulated by the Arizona Corporation Commission or their elected boards. This regulation provides stability in electricity pricing, avoiding the need to purchase electricity in an open market with unregulated price fluctuations.
During hot summer days, Phoenix is one of the world’s most intense users of electricity. The ability to deliver electricity for this peak load has demonstrated the stewardship provided by our public utilities. To reliably supply power for the extreme peak loads requires a robust electrical system that is designed with redundancies and extra capacity to buffer unexpected events.
Our public utilities make the chaotic seem calm. Even with the intensity of our electrical system, Phoenix residents enjoy some of the lowest power rates in the country, thanks to the investment in a broad spectrum of power generation facilities that include natural gas, nuclear, coal, solar, wind and other renewable resources. From most consumers’ perspective, our locally controlled public utilities are considered valued partners in the community that have continuously fulfilled their mission. Our electrical ecosystem works!
The wisdom of our early civic leaders has prevailed due to provisions within our state’s Constitution. The benefits of having a comprehensive, sustainable, robust, and holistic electrical ecosystem have survived for now. It is in our state’s best interest that it continues to survive.
This issue will soon resurface, most likely as a ballot box issue framed with sound bites regarding competition and free markets. There are good reasons why our early civic leaders choose the structure of our current system. Please invest some time today to share with the corporation commissioners where you stand on this important issue so that our public utilities can focus their energy on more productive matters and continue to invest in the future electrical needs of our state.
— Patrick Adler lives in Phoenix.