Posts Tagged ‘Corporation Commission’

15th September
2009
written by Sean Noble

Arizona is a growth state. In fact, historically it’s one of the fastest growing states in the country.  Not that there is much growth at the moment, but as in times past, that will return.

Growth has benefited Arizona in huge ways – low cost of living, lots of job opportunities, good economic growth, etc.  The question is, why does Arizona grow?  Well, it’s a number of factors, but by far the biggest factor is the climate.  Yes, we are on the tail end of a brutal summer, but by October, when snow is falling in the Midwest and Northeast, we’ll all be on the phone with our friends and family bragging about our tans and how we just got out of the pool.

With growth comes the cost of infrastructure – in particular electric infrastructure – power lines, etc.   Under normal circumstances power companies, in this case APS, can plan for future needs and finance construction of infrastructure in a way that allows them deliver reliable electricity without raising rates.

But the Arizona Corporation Commission has imposed a regulation (called a Renewable Energy Standard – RES) on utility companies that 15% of the electricity they produce by the year 2025 must be produced by “renewable” sources – solar, wind, biomass, geothermal, etc.  Inexplicably, hydropower does NOT count as renewable, even though any third grader can explain the hydrological cycle.

Pop quiz: how much of the energy produced in Arizona today is renewable? 10% you say?  Do I hear 5%?  How about 0.1%.  Yep, 1/10th of one-percent.

Back in March I blogged about Commissioner Paul Newman’s letter to Congress stating a goal to push the RES from 15% to 25% and asking for Stimulus funds to be sent directly to the Corporation Commission, bypassing current channels. At the time I figured he was kind of acting as a lone wolf.  But now, I think he may have a cohort on the Commission in Republican Commissioner Kris Mayes.

In a recent article about APS seeking a rate increase to help pay for this additional burden foisted on them by the Corporation Commission was this nugget:

Mayes said that APS might not need the rate hike it is requesting if the policy had been changed yean; ago, because if the state had grown slower, the utilities would not need to build as many power plants and long distance transmission lines to serve the population.

So Mayes thinks that slowing our growth would have made it less likely that APS would need a rate increase?  I tend to think it has more to do with the unattainable mandates the Corporation Commission has put on power companies.

There is no doubt that renewable energy should be a part of the solution in the long term for producing energy, but I think we need to rethink whether it’s a good idea to put huge burdens on utilities to produce power from sources that are inefficient and hugely expensive.