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Utility regulators must have wisdom of Solomon, spirit of Edison


The Arizona Energy Policy Group was founded last year in order to provide perspective to regulators and policymakers regarding Arizona’s energy challenges and opportunities, and to aid in the development of innovative and prudent energy solutions for Arizona. AEPG’s members include investor-owned and public power utilities that serve millions of state residents. Our mission involves educating the public and regulators about the lifeblood of Arizona’s economy – the provision of safe, affordable and reliable energy.

Bob Stump

Bob Stump

Electricity is among the most political of commodities, and everyone has her favored form of power, with a constellation of advocates to promote it. Too often, wishful thinking masquerades as fact and political sloganeering substitutes for intellectually rigorous policy analysis. Utility regulators have a challenging set of responsibilities as they sift among the claims of these competing interests. They must balance the goals of system reliability, public safety and environmental stewardship while guiding utilities to design energy portfolios that make efficient use of existing infrastructure and which keep costs as low as possible for consumers.

The Arizona Corporation Commission’s mission as a rate-making body involves striking a balance between interests – to seek what commissioners call “the public interest.” That is, the interests of investor-owned utilities must be balanced with the interests of ratepayers, which are all of us. In other words, if a utility is financially unhealthy, each of us will be put at risk. Yet if we don’t receive a fair deal on our bills, our personal financial future will suffer. As I noted on the statewide campaign trail for the Corporation Commission in 2007, the commission is critical to the future of Arizona because its decisions keep our lights on, our water flowing, and – by ensuring rates are just and reasonable – our bank accounts healthy.

Commissioners need the wisdom of a Solomon and the innovative spirit of a Thomas Edison. New technologies are potentially empowering yet also disruptive, and regulators face the task of encouraging and incentivizing them while also ensuring that the provision of utility service remains reliable, safe and affordable.

Today, old rate structures and aging infrastructure must keep up with technologies that are mercurial and decentralized. Regulatory models must support seamless grid upgrades and smooth integration of new technologies without impairing reliability. The utility, which has a century-old compact with consumers, subject to review and scrutiny by regulators, remains an anchor in an increasingly dispersed system. Reliable utility-supplied power is, for the time being, what makes “choice” – such as “solar choice” – possible. Distributed generators and third-party providers who lack formal regulatory oversight, yet who succeed or fail based in part on commission decisions, should strengthen their own consumer compacts and continue to pursue robust consumer protections for Arizonans.

I am confident the commission will be mindful of the motto of Arizona’s Great Seal, which reads, “God enriches.” The seal memorializes Arizona’s reservoirs and dams; the harnessing of its mighty natural resources; its irrigated fields of citrus and cotton; and its cattle, mines, and mills. The commission will remain at the center of our great state’s mission to be responsible stewards of the “enriching” resources that enable Arizona to thrive.

To this end, AEPG will continue to intervene in rate cases and other policy proceedings at the Arizona Corporation Commission and strive to provide impartial and fact-based policy analyses for Arizona’s decisionmakers. We appreciate the privilege of helping forge Arizona’s energy future.

Bob Stump is the executive director of the Arizona Energy Policy Group. He is the former chairman of the Arizona Corporation Commission and served four terms in the Arizona House of Representatives.

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