Rudderless leadership on energy hurts Arizona ratepayers

Guest Opinion//May 14, 2021

Rudderless leadership on energy hurts Arizona ratepayers

Guest Opinion//May 14, 2021

Solar panels and wind turbine against blue sky

A few weeks ago, I wrote an op-ed for the Capitol Times praising Arizona Corporation Commission Chairwoman Lea Márquez Peterson for her prior support of common-sense clean energy rules that would reduce electricity rates and attract more business to the state. She voted in favor of these rules last fall.

However, when those same rules were up for a final vote last week at the commission’s May 5 meeting, Márquez Peterson preformed one of the most stunning and inexplicable flip-flops imaginable.

She voted in favor of Commissioner Justin Olson’s amendment to dramatically weaken the rule she had staunchly defended in the weeks leading up to the vote. In fact, Márquez Peterson had rejected Olson’s very same motion back in November.

The four years of analysis, debate, and stakeholder involvement she often touted no longer mattered. Her claims that the new rules would be “an economic development driver for the state” no longer mattered. Strong support for the rules by Arizona Public Service, Tucson Electric Power, and Southwest Gas no longer mattered.

Her stated excuse for this acrobatic reversal was that she “could not in good conscience support a rule in which we did not know the financial impact to the ratepayer.”

The problem with that argument is that we do know what the financial impact to the ratepayer would have been: cheaper electricity!

David Jenkins
David Jenkins

There is no mystery here. Due to aging coal and gas generating plants becoming more costly to maintain and operate, electricity from those sources costs between $45 and $80 per megawatt hour (MWh). New solar plants generated electricity paired with storage for night generation is selling for between $14 and $25 per MWh—and that price is locked in for the next 20 years!

One does not exactly need to be a math whiz to figure this out.

The proposed Energy Rules would have moved Arizona to 100 percent clean energy by 2050. Clean energy being primarily solar and nuclear, two sources that play to Arizona’s strengths.

The only conceivable wild card regarding price would be if utilities were forced to retire existing coal or gas plants early. But that is not the case. Remember, we are talking about 2050. By that time, every existing coal or gas plant will already be well beyond its projected life.

That is why it was so easy for APS and TEP to support the proposed Energy Rules.

The low cost of solar and storage has dramatically transformed the energy market in the Southwestern U.S. over the past several years. That is why in 2019 the Nevada legislature unanimously passed a renewable energy standard of 50% by 2030. Every single Republican voted for it!

Why? Because they did the math and realized that overreliance on aging power plants and out-of-state natural gas was hurting ratepayers.

In fact, all of Arizona’s neighboring states have moved to take advantage of low cost solar for their ratepayers. In addition to Nevada’s 50% renewable standard, New Mexico and California both have a 100% clean by 2045 standard, and numerous localities in southern Utah have enacted 100 percent clean by 2030.

By weakening and thus sinking the rules, Márquez Peterson has ensured that Arizona, with its old and paltry 15% by 2025 standard, will fall far behind those neighboring states in attracting businesses that have set their own internal clean energy goals.

She has also ensured that Arizona families and businesses will see higher utility bills because the state will not be taking full advantage of its massive solar potential and the resulting savings in electricity costs.

The last commission meeting was a troubling example of failed leadership. Márquez Peterson now has a choice. She can double down on her mistake at the expense of Arizona’s future, or she show real leadership by putting the original Rules up for reconsideration in the next few weeks—and take the do over.

David Jenkins is president of Conservatives for Responsible Stewardship (CRS), a national nonprofit organization with more than 800 members in Arizona.