The Arizona Senate and House of Representatives have struck a victory for affordable, reliable and cleaner energy by sending House Bill 2679 to Gov. Katie Hobbs’ desk for her signature.

HB2679 is commonsense legislation that will enable the use of utility securitization in Arizona. The tool, which is authorized for use in 33 other states across the country, allows electricity providers to refinance assets like aging power plants and infrastructure damaged by natural disasters in order to save customers money on their utility bills. This is similar to when you refinance your mortgage at a lower interest rate to save money every month.

During consideration of the bill, opponents went to great lengths to mischaracterize this legislation, claiming that the proposal would allow utilities to circumvent regulators and be a “blank check for utilities”. These detractors either do not understand what is actually in the bill or are purposefully making specious claims. In reality, HB2679 was crafted with strong safeguards and oversight to guarantee that ratepayers benefit from any future securitization transaction executed in Arizona.

First, HB2679 does not bypass the normal ratemaking process for utilities. On the contrary, the bill requires electric companies like Arizona Public Service and Tucson Electric Power to apply to the Arizona Corporation Commission for review and approval before they can ever proceed with a securitization transaction. Utilities cannot securitize costs without  the commission’s approval, which under HB2679 would have to result from a formal hearing process.

Second, as part of the commission’s requirements before it can approve a securitization transaction, they must find that the transaction is just, reasonable and in the public interest. Most importantly, that will require the commission to determine that a securitization transaction will save customers more than traditional utility company financing. In other words, the only way for a securitization transaction to ever be approved is if the Commission finds that the transaction will actually reduce customer utility bills.

Lastly, the legislation does not give utilities a blank check. On the contrary, the bill requires utilities to completely give up their profit on any costs they securitize. This means that the only motivation for utilities to utilize the tool is to save customers money when unique circumstances arise. 

During her time in office, Hobbs has been laser-focused on delivering relief to Arizona families struggling with challenges related to higher costs of living. By signing HB2679 into law, she will ensure Arizona’s utilities have an important financial tool at their disposal that will enable them to keep costs as low as possible for their customers. We applaud Republicans and Democrats for coming together on this important legislation and look forward to HB2679’s enactment into law.

Matthew Gonzales is the Southwest Regional Director for Consumer Energy Alliance.