Arizona residents are in danger of losing major consumer protections. Right now, the Arizona Legislature is considering not one but two bills that would give monopoly utilities of all varieties — water, electric, gas, telecommunication, and more — a blank check to develop without regard to what local residents prefer.
These bills must not pass. Local governments must retain authority to determine which utility service is right for their citizens. We elect our local governments; we do not elect monopoly utility service providers.
House Bill 2686, which is on Gov. Doug Ducey’s desk, and Senate Bill 1222 have been fast-tracked in the Legislature and legislators have had little time to consider the unintended consequences for those who are affected: All of us.
What the bill purports to do is restrict local governments from denying services of utilities. The bill comes before the Legislature courtesy of Southwest Gas, the Nevada gas utility that serves wide swathes of Arizona.
The gas utility is trying to solve a problem that does not exist in Arizona. They are trying to prevent cities from changing city building codes to allow for more efficient energy standards. The gas utility obviously doesn’t like this, of course, because it may come at the expense of natural gas.
This push for natural gas bans are happening in California cities, not Arizona cities. In my opinion, this is a case of Southwest Gas pressing the panic button based on California ideas. The bill is not needed here, as no one is doing this here. The problem is entirely a red herring. These proposals are actually just a giveaway that ensures future expansion of Southwest Gas facilities and revenues, to which cities and counties cannot say no.
Communities need a right to determine how they want to proceed with their energy programs. What we do not need is special interest legislation for monopoly self-interests.
This power move would severely hinder cities’ ability to adopt building codes that save energy and water, which benefits the future of all Arizona residents. It would take away cities’ and counties’ ability to select utility services that are best for constituents and communities.
Rather than warding against California-type legislation, we are in the process of adopting California-style one-size-fits-all mandates. Proponents of this bill have used scare tactics to enlist the support of the AZ Restaurant Association. But is there an effort afoot to ban restaurants from using natural gas? Not to my knowledge.
The Legislature is moving so fast that many municipalities are not even aware of it. Also, legislators have not even had the chance to explore unintended consequences. For example, we don’t know how this bill will impact agricultural communities that use irrigation services, or whether or not customers that are fed up with utilities like Johnson Utilities will be forced to take
their service, regardless of the utility’s performance. Here’s another: Would Arizona companies retain the right to go through a direct supplier for a service? We do not know.
A key, broad but vague provision of these identical bills states. “A MUNICIPALITY MAY NOT IMPOSE A FINE, PENALTY OR OTHER REQUIREMENT THAT HAS THE EFFECT OF RESTRICTING A UTILITY PROVIDER’S AUTHORITY TO OPERATE OR SERVE CUSTOMERS.” What does this mean, and what are the possible consequences?
We should not lock in a regime of subservience to monopoly utilities like Southwest Gas. Gas may very well be the new coal. As technologies advance, other alternatives might be better for ratepayers. We should not mandate forever that communities must use existing utilities.
Finally, it has come to light that Southwest Gas has been a major contributor to the same Arizona legislators sponsoring this bill. My suggestion would be that legislators listen to those of us who contribute with our votes rather than monopoly utilities that cut checks for large political donations.
A foundational principle of Arizona governments is home rule. Communities must have a right to determine how they want to proceed with the services utilities provide, whether that service is gas, electricity, Internet, water, telephone, or anything else. Just because one utility is afraid of what’s happening in California doesn’t mean Arizonans need to give our rights away. Let the cities and counties decide what’s best for them. It’s just that simple.
Tod Dickey is President of VMI Holdings, a family-owned Arizona business started in 1964.