Like many Arizonans, this Arizona Corporation Commission is tightening utility spending. Like a family cutting extra expenses to prioritize necessities, commissioners are tasked with regularly assessing unnecessary costs that impact ratepayer bills and cutting the fluff. Whether it’s eliminating outdated mandates, reducing surcharges, or prioritizing policies that keep the lights on and electricity affordable, this commission has consistently acted.

You may have heard that the commission recently voted to repeal both the Renewable Energy Standards and Tariffs (REST) and the Demand Side Management/Energy Efficiency (DSM/EE) mandates, which were established over 15 years ago. Unsurprisingly, there’s been a lot of doom and gloom from some.

REST and DSM/EE set baseline standards and deadlines for major regulated utilities to deploy renewable sources and promote energy efficiency, which have been exceeded. They have also cost Arizona ratepayers over $3.6 billion in extra fees since their implementation. It turns out you’ve been helping pay for your neighbors’ “free” shade trees, thermostats, light bulbs, EV garage chargers, and rebates for weatherization and solar water heaters. One utility collects $10 million in annual fees alone to provide incentives to homebuilders to install energy efficient appliances in new homes.

But that’s just the tip of the iceberg. We recently learned that REST mandates pushed APS into a 30-year contract requiring them to pay over-market prices for the solar energy generated at the Solana plant in Casa Grande. APS continues to pay about $0.15 per kWh for this energy, with more than a decade remaining in the contract. That same equivalent energy can be procured today for between $0.025 and $0.030 per kWh. With a facility that produces more than 700,000 MWh of electricity each year, that’s hundreds of millions in unnecessary additional customer costs each year. 

Fortunately, this commission makes decisions based on affordability and reliability. It’s not surprising that many of the groups fighting the REST and DSM/EE mandate repeal also pushed the 50% renewable mandate. That’s important because the late August dust storm had a huge impact on solar production in our state. APS lost about 50% of its utility solar fleet, and SRP lost 45% of its fleet between the hours of 3 p.m. and 5 pm. Roughly 1,600 MWs dropped offline in the dead of summer because of dust. That’s one nuclear reactor at Palo Verde, or approximately enough electricity to power 350,000 homes. 

Thankfully, our utilities were able to quickly pivot and dispatch natural gas generators to make up for the electricity loss. But imagine if 50% of our power was dependent upon renewables. We could have faced real possibilities of rolling brownouts or even catastrophic grid failure due to a dust storm. 

Unsurprisingly, the usual hyperbole about Arizona turning its back on renewables has resurfaced, seemingly implying renewables can’t survive without subsidies and the forceful hand of government. Nevermind that large scale private equity funded renewable projects that sell power to our utilities are often the cheapest form of new generation. Thankfully, this commission requires utilities to issue all source RFPs when they procure new generation so customers pay the lowest rate available and aren’t stuck with inflated costs.

The commission must now conduct the required public hearings and follow the rulemaking process. But if history has taught us anything, the rhetoric will ramp up. The attorney general is already threatening to sue. That’s not surprising, as she played a pivotal role in originally forcing these costly mandates onto utilities and ratepayers. But that’s not going to deter our resolve to do what’s right for ratepayers and our grid. 

Critics view repealing the mandates as a backslide — a threat to an industry apparently dependent on subsidies. If you believe their hyperbole, renewables will seemingly come to a screeching halt in Arizona. But I see it as removing perverse financial incentives for utilities, taking the government’s hand off the scale, enabling all generation technologies to stand on their own., and pragmatically pursuing projects that prioritize affordability and grid reliability. 

The initial policy objectives were achieved. It’s time to eliminate cost shifts from ratepayer bills and focus on necessary expenses that will actually keep the lights on and reduce bills. 

Kevin Thompson is chairman of the Arizona Corporation Commission.