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Stults: Utilities may give Arizona customers reasons to sweat


Sweltering heat waves and unreliable energy access during wildfires are giving Arizonans a lot to worry about when it comes to their power supply. But a plan being considered by the state legislature should give Arizonans even more reason to sweat when it comes to their ability to reliably and affordably keep cool. 

A pair of bills being considered right now by Arizona’s legislature, House Bill 2101 and Senate Bill 1631, are bad energy policy masquerading as a promise to improve reliability. Arizona utility companies claim the bills would improve the state’s electricity resilience, but the proposals include exactly zero tangible reliability improvements to the state’s electricity system.

Instead, the bills are a thinly veiled attempt at solidifying the state’s existing utility monopoly structure, for no one’s benefit but that of the utilities. They are simply trying to eliminate competition by preventing clean energy companies from giving customers more choice or allowing market forces to pressure utilities into providing more competitive clean energy services. In other words, the seven utilities behind the measure are looking to restrict Arizonans’ power to choose how and where they get their electricity.

Several other policies bundled into HB2101 and SB1631 also make these bills bad energy policy for Arizona, particularly when it comes to expanding customers’ access to resilience-boosting technologies. For example, sections of the bill could negatively impact Arizona utilities’ use of demand-side management programs, which are critical for conserving energy and relieving strain on the grid.

DSM offerings provide a reliable way for utilities to manage high electricity use at critical times, like when air conditioning use is high during heat waves across the state.

Moreover, these programs save utilities and their customers money long-term by avoiding the need to build additional, expensive power plants to meet growing energy demand.

If these legislative proposals were really about improving reliability, avoiding blackouts, and protecting residents, they would be creating programs that curb demand at critical times and looking for ways to add a diversity of innovative, advanced technologies onto the grid.

The utilities’ proposal would also take away some of the public’s ability to hold them accountable. For instance, it would shield utilities from having to go through a fair and transparent review process of actions that are not directly related to “ratemaking” or “rate design.”

Controversial decisions — like Salt River Project’s half-billion-dollar investment in natural gas plant expansion at the Coolidge Generating Station and other projects like it — would be exempt from future scrutiny or review. 

Moreover, the bill strikes text the state uses to define the roles of certain technologies within the electricity system, then hands the pen to utilities to rewrite them to their own liking. These include critical electricity-generating and managing technologies, like solar, battery storage and DSM programs, that improve reliability and lower costs for customers. 

With longer, hotter summers on Arizona’s horizon, Arizona needs to embrace new, competitive energy solutions to keep people safe and comfortable all year long.

But these solutions are absent from these bills. HB2101 and SB1631 aren’t about reliability; they are an attempt by Arizona’s existing utilities to pull the plug on competition from clean energy before it even gets a chance.

Editor’s note: Shelby Stults is a policy principal at Advanced Energy Economy, where she leads legislative and regulatory engagement in Arizona and works with key decision-makers to encourage strong energy policy.