House Bill 2679 is being sold as a financing mechanism that is a win-win for utilities and their ratepayers. And yet, there is overwhelming opposition to the bill from both sides of the aisle. The Arizona Corporation Commission (a 5-0 Republican body), the Arizona attorney general, and former Republican legislator and chair of the Arizona Corporation Commission, Bob Burns, have all sent letters to the Legislature highlighting serious concerns with the bill.

Yet the bill has received bipartisan support, even from legislators who are typically very concerned about writing a blank check to monopoly utilities.  Arizona Public Service (APS) has been playing both sides. They have led Democrats to believe this bill is actually about tribal sovereignty even though nothing in the bill applies to tribes at all. The bill applies to public power entities, public service corporations and municipal utilities. How could the bill be about tribal sovereignty? 

In 2021, the Public Service Company of New Mexico (PNM) attempted to “sell” their share of Four Corners power plant to the Navajo Transitional Energy Company (NTEC) for $1. In addition, the utility was going to pay NTEC an additional $75 million to take the plant off its hands. Even with paying NTEC to take the plant off its hands, the utility still argued to New Mexico regulators that offloading the plant would save its ratepayers $30 million to 300 million dollars; that’s how uneconomic the plant is. 

The elephant in the room is that APS wants to do the same. They want to offload their share of this wildly uneconomic plant and then securitize the loss from that “sale” on the backs of ratepayers. Ironically, this arrangement has Democrats in the curious position of supporting a bill that will almost certainly keep uneconomic coal plants online even longer; plants that use more water than their alternatives and emit significant amounts of air pollution. Governor Hobbs has said she is “analyzing how various proposals may deliver on lowering energy bills while advancing a clean energy economy in Arizona.” Unfortunately, that is the opposite of what HB2679 does.

APS simultaneously has convinced Republican lawmakers that the bill is good because it does the very thing Democrats would normally oppose. But it does that by subsidizing the “sale” of uneconomic power plants, resulting in a massive cost shift from NTEC on to the backs of ratepayers. We would all be paying for APS to pay NTEC to take Four Corners off its hands. As someone who spends a very significant amount of time at the Arizona Corporation Commission, I was under the impression that subsidies were antithetical to Republican principles.

Securitization can be an important tool in the toolbox when it comes to innovation in the electric grid. However, this bill is not that. This bill will keep coal online longer on the backs of Arizona ratepayers via a huge subsidy to the Navajo Transitional Energy Company. Lawmakers should vote no on HB2679 or the bill should be amended to remove the option to sell AND securitize an asset. The bill, as drafted, solely benefits the APS parent company’s shareholders.

Autumn Johnson is a public interest policy advocate and CEO of Tierra Strategy.