The future of a surcharge on state customers’ electricity bills could hinge on the outcome of the Republican primary battle for the Arizona Corporation Commission.
Half the eight contenders for the three open seats on the commission want to scrap the “renewable energy standard” that state utility regulators approved three years ago. The rule mandates that 15 percent of all electricity sold in Arizona by 2025 come from renewable sources like wind, solar and geothermal instead of the current heavy reliance on coal, nuclear and natural gas.
The possibility of a rollback has alarmed Republican incumbent Kris Mayes, who is not up for re-election this year. She has been a prime proponent of not just renewable energy, but solar in particular.
“It boggles the mind,” she said, calling the idea of rescinding the requirement “a ridiculous notion.”
But the political reality could put her and Gary Pierce, the other incumbent also not on the ballot this year, in the minority on the five-member panel.
Former state Rep. John Allen, R-Scottsdale, one of the GOP contenders, said he is no fan of the mandate.
“I think that it’s ahead of its time,” he said, saying Arizona regulators decided to enact the rules ahead of most other states “so we can have the bragging rights.”
Buckeye resident Keith Swapp, another candidate, said there is nothing wrong with suggesting that utilities look at alternatives and even in encouraging their customers to use more of it.
But he said that should be strictly voluntary rather than “pulling money out of the taxpayers’ pockets.”
That’s a view shared by Rick Fowlkes of Mesa and Joseph Hobbs of Avondale, who are running together as a ticket for the three open seats.
There also are four Democrats vying for the three open seats. But the outcome of that race may have little bearing on the issue.
All the commissioners, including the two not up this year and the three not running for re-election, have been Republicans since Renz Jennings left after the 1998 election. And Democrats have not had a majority on the panel in more than a decade.
Surcharge in question
Central to the fight is the question of cost: Electricity from renewable sources generally costs more than nuclear and coal, which are the cheapest and, for the moment, largest sources of power for Arizona.
To account for that, the commission is allowing utilities to tack additional charges onto customers’ bills.
Tucson Electric Power, for example, can add up to $2 a month onto what their residential customers pay. That brings bills to $39 a month for small and medium-size businesses, and up to $500 for the largest industrial users.
For Arizona Public Service, residential bills can contain an extra $1.85 a month. Businesses can be charged an additional $68.78 a month, with that figure increasing to $206.33 for the largest customers.
Fowlkes, who ran for the commission before as a Libertarian, said renewable energy might be an answer in the future to help utility companies meet demand and hold down costs.
“But in the short run, it costs more to generate power this way than the conventional means of generating power,” he said. And Fowlkes said the mandate “is just another example of government telling business how to operate.”
But outright repeal of the mandate does not have support from three current legislators, who also are running as a ticket. One of them, Rep. Bob Stump, R-Peoria, said he wants it to remain in place, at least for the time being.
“We are open to looking at that should the economy go south” and the costs to consumers grows too large, he said. But he called it “shortsighted” for any candidate to say up front that the mandate should be repealed outright.
Plans in place
Rep. Bob Robson, R-Chandler, part of that same ticket, said that, if nothing else, the mandate serves as a goal.
“Goals have to be flexible, as well,” he said. “But if they didn’t put the goal in place, would we have a $1 billion investment that’s currently being made?”
That refers to plans by APS to buy power produced by a Spanish company that announced earlier this year that it would build a solar thermal plant near Gila Bend that could generate enough power to serve 70,000 households.
Rep. Marian McClure, R-Tucson, the third member of the ticket, said she might not have supported the renewable-energy mandate at the time it was first approved. But McClure said now that it is in place, she doubts she would vote to change it.
Also running as a Republican, but not part of any ticket, is former state lawmaker Barry Wong, who served on the commission for six months to fill a vacancy. He said he supports renewable energy.
Mayes acknowledged the current cost differentials, especially for solar. But she said these could soon disappear as coal in particular becomes more expensive.
She pointed out that Congress is discussing “cap and trade” regulations designed to limit the greenhouse gases that coal-fired plants produce. There also is some discussion of a “carbon tax,” which would make coal-generated power more costly.
Once renewables cost no more than traditional sources, Mayes said, the need for the surcharge on utility customers disappears.
But Robson has another idea altering the mandate: He wants to see the definition of what constitutes renewable energy expanded to include nuclear.
If nothing else, he said, there has to be recognition that there is a role for nuclear power. The only question, he said, is whether plants will be built in Arizona, under the purview of the Corporation Commission and federal authorities, or potentially just across the border by a private company in Mexico.
The Democratic contenders include Sandra Kennedy, a former state lawmaker from Phoenix who has made an unsuccessful bid for the commission before; Paul Newman, another former legislator and Bisbee resident who now is a Cochise County supervisor; Phoenix resident Sam George, who describes himself as active in Democratic causes; and Kara Kelty, a member of the Flagstaff City Council.
by Howard Fischer
Capitol Media Services
12 June 2008