The three Republicans running to become state utility regulators warn that putting Democrats in charge of the regulatory panel would turn Arizona into California.
And they don’t mean that in a good way.
In a debate at KAET-TV on September 30, all three Republicans – Jim O’Connor, Eric Sloan and Lea Marquez Peterson – criticized the self-named “solar team” of Democrats Bill Mundell, Anna Tovar and Shea Stanfield. They said electing the Democrats would mean higher rates as consumers are forced to buy what they contend is more expensive power from renewable resources, just as what has happened in California.
“I am a free-market capitalist,” said O’Connor.
He said that the added costs borne by utilities to purchase power from wind, solar, geothermal and other renewable sources is passed on to consumers, complete with utilities even taking a markup.
“It’s a fantasy to believe that there’s some company with an endless pot of gold that can pick up the check for all this social redistribution,” O’Connor said.
“Any time the commission mandates or subsidizes something, Arizonans end up paying more for something than they should have,” said Sloan. He estimates the current requirement for utilities to purchase more solar power has cost ratepayers $1.2 billion.
Marquez Peterson, the lone incumbent seeking one of the three open seats, said she sees the issue through a different lens.
She said California has vigorously forced utilities to move away from fossil fuels. That, Marquez Peterson said, led to rolling blackouts this summer and utilities in that state trying to buy power from Arizona utilities.
Democrats have their own arguments.
On the financial side, Mundell, who was a commissioner for nearly a decade until 2009 – and a Republican at the time – argued that the mandates that he helped approve at the time actually have resulted in $2 billion in savings for customers. The key, he said, is encouraging things like rooftop solar.
“You don’t have to build big, gigantic new fossil fuel plants, you don’t have to build transmission lines,” Mundell said. And he pointed out that utilities are legally entitled to pass on the cost of new construction to ratepayers.
Tovar said it’s also good for the Arizona economy, making the state the “solar capital” of the nation.
“It will be a win-win situation,” she said. “It will create a new economy with green jobs … that will be creating the thousands of jobs that we desperately need.”
Stanfield took her own swipe at utilities, saying they don’t appear to be interested in providing clean and affordable energy. She said that’s why they need to be “strongly encouraged with mandates and standards and held accountable for steps to get to those mandates.”
Some of the debate about current and potential mandates could end up being academic.
In a recent ruling, the Arizona Supreme Court appears to have narrowed the legal role of the Corporation Commission strictly to setting rates.
That, in turn, could undermine the existing requirement by the commission that utilities generate 15% of their power from renewable sources by 2025. And it also would call into question other proposals – including some by Republicans – to wean utilities in Arizona away from fossil fuels.
Despite the differences over such mandates, five of the candidates say they do believe that climate change is real and that it is caused by human activity. Only O’Connor said he has his doubts.
The other key issue in the race could come down to who voters believe is least likely to be influenced by the utilities they are supposed to be regulating.
Next month’s election comes as the commission is coming off years of low public trust, much of that directly related to the fact that Arizona Public Service, the state’s largest electric utility, funneled millions of dollars into prior campaigns for Republicans in the 2014 and 2016 elections.
APS appears to have stayed out of the 2018 race after their practices were unveiled. And, to date, there is no evidence that they are backing any of the contenders, all of whom are running with public financing.
“The dark money has corrupted the commission,” Mundell said. “It’s led to those non-justified rate increases and the crushing of rooftop solar.”
Sloan countered that it hasn’t just been Republicans who have benefited from outside spending, mentioning the $2.8 million that Chispa Arizona, the political arm of the League of Conservation Voters, put into trying to elect Democrats in 2018.
But Sloan’s own background made him a target.
He ran the Arizona Coalition for Reliable Energy in 2016. That was the fund financed by APS that pushed for election of Republicans.
That $10,000 contract, said Mundell, makes him suspect as someone who could be an independent voice and properly regulate utilities.
Sloan described his activities as simply a “get-out-the-vote” effort. That drew a sharp retort from Tovar.
“It was a get-out-to-vote for three Republicans on the commission,” she said.
Both Mundell and Tovar did not dispute that they took money from an APS political action committee when they were members of the Legislature. But she said that was a different time.
“We didn’t have these issues with APS,” Tovar said.
Mundell also found himself defending his previous time on the commission, acknowledging he probably voted for some rate increases for APS but saying he also voted against others.
Prior cash from Pinnacle West Capital Corp., the parent company of APS, also became an issue during the debate. Marquez Peterson not only got $2,500 for her 2018 congressional race from the company, but also $5,000 from David Hutchens, chief executive of Tucson Electric Power.
She said that is irrelevant to the job she wants to keep after Gov. Doug Ducey appointed her to the commission, replacing Andy Tobin who left to become head of the state Department of Administration.
“It in no way unduly influences me as commissioner,” she said. And Marquez Peterson also said that she was involved since joining the commission in approving a new code of ethics for regulators.
“I think that we’ve turned the tide” on the commission’s reputation. Beyond that, Marquez Peterson said that the individuals who were leading APS at the time are since gone.