Remarkably, right now the Arizona Legislature is considering nonsensical legislation that will lead to higher utility bills for the state’s residents.
Identical measures in the House and Senate, HB2248 and SB1175, are targeting new bipartisan clean energy rules currently under consideration by the Arizona Corporation Commission – rules that will save ratepayers money, while simultaneously boosting Arizona’s economy at a time when we need it most.
If enacted, this legislation will strip the Corporation Commission of its rulemaking authority and ensure that the state’s ratepayers— lawmakers’ constituents and voters — ultimately pay much more for electricity than folks in neighboring states.
The lawmakers who introduced these bills appear blind to an important reality – that the new commission rules reflect current energy market trends and will ensure that Arizonans benefit from the cheapest sources of electricity.
In blocking these new rules, the Legislature would also cause Arizona to fall further behind neighboring states in the race to attract new businesses. This is because many companies have established their own clean energy or carbon reduction goals, and they are only willing to expand or relocate their business in places where they can easily meet those goals.
More American companies than ever are seeking renewable energy options to power their businesses and meet their customers’ calls for cost-effective, clean power. These companies understand that today’s transition from fossil fuels to clean sources, like solar and wind, is not just good for our lungs and the environment, but for their bottom lines.
That is why 25 major businesses and trade organizations, including companies like Ball Corp, Google and Salesforce, have signed a letter in support of the Corporation Commission’s energy rules.
Furthermore, all one has to do is read the language of these bills to realize that they are based on a complete misunderstanding of the current energy market, one that also ignores the realities that will shape the market going forward.
The chief concern expressed in the bills’ “findings” is that certain fuels will be restricted in ways that “will result in higher electricity prices, harm economic growth, reduce grid reliability and damage Arizona’s energy independence.”
Which fuels is this legislation actually concerned about?
Coal is Arizona’s most expensive source of electricity by far, costing ratepayers as much as $80 per megawatt hour (MWh). Natural gas generation is roughly half that, while utility-scale solar generation with storage now costs around $25 per MWh.
In fact, the exorbitant cost of maintaining old coal plants like Four Corners and San Juan has prompted plans by two of the state’s biggest utilities, Arizona Public Service and Tucson Electric Power, to eliminate the use of coal generation by 2031 and 2032, respectively.
Phasing out the use of coal will lower electricity prices for Arizonans.
Both utilities envision an electric portfolio comprised primarily of Palo Verde nuclear and solar-plus-storage. Not only do those sources offer ratepayers the cheapest electricity generation, they also lead from the standpoint of homegrown reliability and energy independence.
These market trends are what prompted the Republican-led Corporation Commission to spend the past two years working with stakeholders to modernize the state’s energy rules. Such modernization is essential, not only to protect ratepayers, but also to ensure that Arizona can compete with its neighboring states in attracting business.
Finally, by stripping the Corporation Commission of its rulemaking authority, these bills would replace informed technical rulemaking with legislative dysfunction and gridlock — virtually guaranteeing that Arizona energy policy stays moored to past market conditions rather than taking advantage of current and future ones.
If passed, these bills will forever hamper Arizona’s ability to play to its own strengths (low-cost solar and nuclear) in shaping its energy future, and in doing so, will be a disaster for the financial health and energy security of every Arizonan.
David Jenkins is president of Conservatives for Responsible Stewardship, a national nonprofit organization with more than 800 members in Arizona.