Draft Ken Bennett for Arizona Corporation Commission Kicks Off

(Mesa, AZ) – Alan Heywood announced that he is heading up an effort to draft current Secretary of State Ken Bennett to run for the office of Arizona Corporation Commissioner.  Heywood stated: “Ken Bennett is one of the most effective leaders in the history of Arizona.  He had a stellar career in the legislature and was an excellent Senate President.  Bennett also answered the call from Governor Brewer to fill the vacancy as Secretary of State when she was appointed Governor.  Bennett then ran for a second term as Secretary of State, and was elected by an overwhelming number of Arizona voters.”  Heywood went on to say, “Ken has been considering a run for Governor and there is no question that he would make a fine Governor.  However, the Corporation Commission is critically important to the people of Arizona. Commissioners set the price we pay for gas, water, and electricity, and they determine what forms of energy generation will be used.”

“There are many significant decisions that must be made over the next several years concerning energy policy in Arizona. We must elect highly qualified individuals that have extraordinary abilities to make decisions on very difficult and complex energy issues.  Ken Bennett is one of the few in our state that has the background, experience, knowledge and ability to serve in this capacity.  It is hard to imagine that there is a more important office to the people of Arizona during the next several years than that of Corporation Commissioner.”

A webpage has been set up where individuals and/or organizations can register their support to draft Ken Bennett to run for the Arizona Corporation Commission.  It is critical that we let Ken know that he has strong and deep support for his candidacy for this important office.  It is vital that supporters sign up as soon as possible.

Go to: DraftKenBennettForACC.com and tell Secretary Ken Bennett that we need and support him in a run for the Arizona Corporation Commission.

Draft Ken Bennett

 

AZ Electric Utility Rates: Regulated Monopoly or Free-Market Competition?

gavel1-300x223In May, 2013, the Arizona Corporation Commission (ACC) opened a docket to gather information on how Arizona might allow competition among electric companies. On September 11, they shut down the docket with a 4-1 vote, citing “legal issues” that were apparently just too much trouble to tackle. Maybe the ACC will tell us more about that later(?).

So until & unless a new docket on the subject is opened, it’s over.  Of course, Arizona residents do still have a choice: either sign up with the one company legally allowed to provide electric service in your area or go without electricity altogether.

APS and SRP are regulated monopolies. The ACC sets the rate of return that they are allowed to earn on their capital investment in generating stations, transmission lines, and so on*. Their day-to-day operating expenses, depreciation expenses, taxes, etc. are fully covered, dollar-for-dollar, by their customers (you and me). That’s the law.

power-transmissionIs that so bad? Yes, it can be. This is the classic problem of regulated monopolies. While their rate of return is firmly capped by ACC, what are the incentives these monopolies have to hold down their capital expenditures on which they earn that guaranteed return? And what are their incentives to minimize expenses such as payroll? Technically, there aren’t any, other than their own good will and the ACC looking over their shoulder.

So can’t the ACC guarantee that the monopolies are run efficiently?  Oh, would that it were!  No, ACC politicians can’t hope to micromanage a monopoly for efficiency.  On the other hand, if there were competition, the utility would have to run itself efficiently or lose customers to a more efficient competitor that could charge lower prices.

Even when the monopolies are run by people of good will and good intentions**, they can easily slip into inefficient behaviors when there is no overriding free-market, profit-motivated, competitive incentive to stay efficient and keep prices down.

Bell_System_1939I’ve been through deregulation before. From 1969 to 1984, I worked at Bell Laboratories, the research arm of the biggest regulated monopoly ever — the old Bell System (“Ma Bell”).  We even had our own tightly coupled manufacturing arm called Western Electric.  The old Bell System was heavily regulated at the federal, state, and (in some states like Texas) local level.

In the old Bell System our advertising proudly claimed that we provided the world’s best telephone service at the world’s lowest prices. And we really did. But the DOJ Antitrust Division broke up AT&T anyway in 1984, opening the long-distance and equipment manufacturing businesses to competition. It was traumatic for us.  It was complicated.  But the job got done, and today’s telecom industry is much more competitive, innovative, entrepreneurial, and a lot cheaper than it would be if we still had one grand national monopoly.

powerlinesWouldn’t it be nice if the same thing happened with electric power in Arizona?  It could — but not until the ACC opens another docket and attacks those “legal issues” anew.

————————————————————

*Correction: As shown on the ACC website, ACC regulates rates for APS, but on SRP, ACC is only involved when SRP wants to build large power plants (100 Megawatts) or very high voltage transmission lines (115 kVolts.)  ACC also regulates Tucson Electric Power (TEP).

** Regarding good intentions:  A look at the SRP and APS websites will show that these utilities are indeed responsible corporate citizens, offering ratepayers tips, a choice of rate plans, rebates, and other assistance to help customers lower their electric bills. Both utilities and their employees are involved in conservation, and I know first-hand of their contributions to public education in Arizona. But business is business, and there’s nothing like the pressure of competition and the incentive of higher profits to drive a company to run the most efficient operation and offer the lowest prices possible.

MBQF Launches Public Opinion Survey Service – Electric Deregulation Top Issue for Maiden Release

MBQF

Public Policy and Public Education Objective of Service

(Scottsdale, AZ) — MBQF Consulting founder and CEO Mike Noble today announced his objective to provide a quarterly service to inform and enlighten Arizonans on the public policy issues being debated in Arizona and around the Nation. Noble, who is not representing or retained by either side of Arizona’s Electric Deregulation debate being considered by the Arizona Corporation Commission, indicated that future topics would concern issues being considered by the Arizona legislature, the Congress of the United States, as well as multiple ballot initiatives.

“Arizona voters are some of the most engaged in the nation,” Noble said. “By helping identify voters public policy attitudes to decision makers and key stakeholders, we are ensuring their concerns are more clearly understood. It helps enhance the quality of discourse in our state and brings more people to the table.”

MBQF surveyed 516 high efficacy Arizona voters between August 5th and 7th, 2013. Voters were given a summary explanation of the deregulation issue, and then asked whether they supported, opposed or were undecided about electric deregulation. Issue explanations were randomized to present the question in a different order to each half of respondents.

Among Arizona high efficacy voters, 32% of respondents say they support deregulation, 41% say they oppose it, and 27% remain undecided. Republicans are split nearly evenly, with 35% supporting deregulation to 38% who oppose it, and 27% still undecided. Just 26% of Democrats support deregulation, while 45% oppose and 28% remain undecided.   Independent voters showed 34% support, 42% oppose and 24% remain undecided.

“A lesson we take from this is that no side in this debate has really gained any huge dominance over the other,” said Noble. “As is so frequently the case, influence rests with the undecided voters, and that puts all the more pressure on the companies and the stakeholders in this debate to develop new and more convincing arguments to reach Arizona citizens.”

For more information about this survey, or a summary of topline data and wording, please contact Mike Noble at the number above. Included in this survey were 516 autodial responses with rotating samples to ensure issue fairness. The Margin of Error for this survey is +/-4.3% at the 95% confidence level.

EPA overreach at Navajo Generating Station yields bad energy policy for Arizona

By Douglas Little, Phoenix Conservative Examiner

In one of the most egregious abuses of it regulatory power, the EPA is forcing the Navajo Generating Station (NGS) located near Page, AZ to make unnecessary and costly modifications to the generation facilities that would have no measurable effect on emissions in the region.

Using the Clean Air Act as its regulatory authority, the EPA claims that emissions from NGS are contributing to haze in the Grand Canyon area and in February of this year, proposed a regional haze restriction that would require NGS expenditures of $1.1 billion on additional emission reduction controls. This claim also ignores the fact that prevailing winds in the region result in plant emissions being blown away from the Grand Canyon, not towards it.

At the same time the EPA issued their ruling, a U.S. Department of Energy study concluded there would be no visibility improvement at the Grand Canyon after the controls were added. Why would the EPA pursue such a expensive and punitive rule when it would have no perceptible effect on haze at the Grand Canyon?

Opponents of the EPA action are reporting that the EPA doesn’t care about haze at all. They say what the EPA really wants is to provide a precedent for shutting down coal-fired electric generating plants. The Obama administration has a stated objective to reduce carbon emissions and last year attempted to implement a “cap and trade” approach to regulating fossil fuels. Republicans in the US Congress voted down the enabling legislation, with some calling it a “war on coal”.

Why is the EPA going after NGS and why is NGS so critical to Arizona?

The Navajo Generating Station was constructed at a cost of $650 million beginning in 1970 and ending in 1976 when the last of the three generating units was completed. The project was sited in its current location based on readily available coal fuel, a reliable source of water for cooling and the proximity of the city of Page which could provide for many of the project’s infrastructure needs, including an available skilled labor pool. The plant is located approximately 100 miles northeast of the Grand Canyon.

The primary purpose of the NGS was to provide power to support the Central Arizona Project (CAP) which is responsible for supplying Arizona’s share of Colorado River water to central and southern Arizona. To get water from the far northwest corner of Arizona to the rest of the state, CAP built a network of pumps, pipelines and and surface canals over 336 miles in length to transport Arizona’s annual allocation of 1.5 million acre-feet of water to Maricopa, Pima and Pinal counties. The pumps must raise the water over 3000 feet to allow it to flow into central Arizona. The majority of the power generated by NGS powers the CAP pumps.

NGS has a long history of taking a proactive approach to emissions reduction. In 1999, NGS completed a $420 million retrofit that reduced sulfur dioxide emissions from the plant by 90%. In additional overhauls conducted between 2003 and 2005, electrostatic precipitators were overhauled for reliability and performance gains. In 2007, the Salt River Project, the plant operator, conducted studies on how to reduce nitrogen oxide emissions to reduce haze in the region and voluntarily installed emission reduction equipment on each of their three plants between 2009 and 2011.

Apparently, the best efforts of NGS were not good enough. The EPA rule proposed in February is one of the most stringent regional haze rules in the entire nation. It imposes a standard that is more rigorous that the standards for a brand new coal plant. At the 1600 megawatt Prairie State Energy Campus which first came online in 2012, the permitted level of NO emissions are 0.07 parts per million (ppm) while the standard for NGS, a 37 year old plant, is 0.055 ppm.

In an attempt to find a reasonable middle ground, a working group consisting of the EPA, U.S. Department of the Interior, the Salt River Project, the Central Arizona Water Conservation District, the Environmental Defense Fund, the Gila River Indian Community, the Navajo Nation and the Western Resource Advocates began negotiations to find a “Reasonable Progress Alternative” to the BART rule issued by the EPA in February.

These negotiations were closed-door sessions and while the working group included non-stakeholder environmental activists like the Environmental Defense Fund, they did not solicit or accept input from important stakeholders like the Arizona Corporation Commission, which is the primary regulatory body for energy and water resources in the state. Arizona’s Attorney General was also excluded from legal review and comment on the proposed agreement.

Under the proposed settlement, visibility standards and haze causing nitrogen oxide standards are not even addressed. However, in one section of the proposed agreement, the Department of the Interior makes commitments to reduce or offset carbon dioxide emissions by 3% per year “in furtherance of the President’s 2013 Climate Action Plan”. It further states that “This commitment is intended to accomplish two aims: reduce carbon dioxide emissions and demonstrate the workability of a credit-based system to achieve carbon dioxide emission reductions” (emphasis added).

This action by the Department of the Interior and the EPA essentially unilaterally implements “cap and trade” at NGS even though they do not have Congressional authority to do so.

The working group proposal also calls for the early shutdown of one generation unit in 2020 or the equivalent reduction of output equal to the closure of one unit from 2020 to 2030. There is no consideration in the plan for any increased cost in replacement power or an increase in water rates due to those increased power costs.

While clearly not a great deal for SRP, the Navajo and CAP, why are they supporting it? The original rule issued by the EPA would have imposed the most stringent nitrogen oxide standards in the country and would require retrofits to the generating plants at a cost of over a billion dollars. Had that rule been implemented, the economic viability of the entire plant was in jeopardy. The Arizona stakeholders felt that the EPA was holding the plant hostage under its rule-making authority. They felt that the working group agreement was probably the best deal they could get under the circumstances, enabling them to keep the plant going at least until 2035.

Unfortunately, the working group agreement has some fairly large holes in it. Many of the commitments made by the Department of the Interior may require Congressional action to implement. In the current belt-tightening by the federal government, Congress may not be willing to fund the $100 million in commitments made by the Department of the Interior. Furthermore, the agreement anticipates a dramatic increase in water rates, but make no provision for it. In addition, it does not address the loss of jobs, economic benefit and tribal revenues that will result from the terms of the agreement.

A critical reading of the proposed working group agreement seems to indicate that these regulations are not about reducing regional haze. There is no meaningful reduction of nitrogen oxide in the proposed agreement. Instead, there is a focus on carbon dioxide emission reduction. Carbon dioxide is an odorless, colorless gas and has no impact on visible haze.

In addition, the agreement is an apparent attempt to unilaterally implement a “cap and trade” system for regulating carbon emissions for which the Department of the Interior and the EPA have no statutory or regulatory authority.

Finally, it appears to be a blatant EPA attack on coal-fired generating plants with the full support and encouragement of environmental activists.

Is the EPA doing all of this for a reduction in haze that the federal government’s own study said would be imperceptible to the human eye? More likely, the haze standard simply gives the EPA the opening they need to accomplish their real objectives of shutting another coal plant and promoting Obama’s energy agenda.

EPA overreach? Good energy policy? The right choice for Arizona? You decide.

The public comment period on the proposed agreement will close on October 4th, 2013.

You can go here to comment: http://www.regulations.gov/#!documentDetail;D=EPA-R09-OAR-2013-0009-0111

A Natural (Gas) Recovery

Reposted from Western Free Press

By Greg Conterio

The economy is bad.  Let’s be honest—despite the spin, with the media trying to convince us all that less than 2% annual GDP growth is a good-thing, and 7% unemployment represents “light at the end of the tunnel,” the economy is still bad.  I hear from my clients across a variety of industries, and they agree—it’s bleak.  Everyone is hurting.  The talk is whether this really is the “new normal.”  For the first time in my adult life, I hear people talking of an actual recovery in terms of “if” not “when.”

natural_gasWell, I’m not ready to give up so easily.  This may be the longest, worst, most depressed economic period since the 1930’s (…which was the last time we had a Progressive in office, but I digress…) but I don’t think this is the new normal. Not by a long-shot.

Suppose I were to tell you we might be sitting on the cusp of an economic surge of unprecedented proportion.  A surge modestly projected to increase annual GDP by half a trillion dollars or more in the next seven years.  Do you think that might create a few jobs?  Bump-up our standard of living a little bit?  Perhaps even pay-down some of our astronomical national debt, provided we can get those clowns in Washington to work within a rational spending allowance?  Of course, much is dependent upon those same clowns, and our ability to convince them who they really work for, but I’ll get back to that.

McKinsey & Company released a report this month titled Game Changers: Five opportunities for U.S. Growth and renewal.  You can download the complete report; it is well worth reading if you are interested in the potential future of our economy.

While other writers have ably dealt with the complete McKinsey report, such as the Wall Street JournalBusiness Insider, and Counsel on Foreign Relations, I would like to focus on the one sector from the report with the most potential impact, the one that I also see as something of a linchpin to unlocking the other sectors—that of course being the energy sector, with special focus on the emerging shale oil and natural gas opportunities.

Beginning in about 2005-2007, U.S. shale gas production began to climb dramatically as a result of technical advances in hydraulic fracturing and horizontal drilling.  Since 2007, annual gas production has grown by 50% per year, and with large new fields discovered recently in the Bakken, Marcellus, Utica and Morrison formations, the U.S. has more than 317 trillion (with a “T”) cubic feet of proved natural gas reserves.

While there have been equally encouraging discoveries in oil reserves, shale gas is particularly exciting and has huge economic potential to affect a number of different sectors.

Energy independence

The boom in natural gas production has forced prices down domestically, from $13/MMBtu (one million Btu, or British Thermal Units) to about $4/MMBtu, or about a 60% decrease.  This is already creating a drive to convert from oil to natural gas for industrial and residential andcommercial transportation energy needs.  Moving from oil to natural gas cannot happen overnight, and with the current administration’s hostility to both oil and coal, prices and domestic development of those resources can be expected to remain deliberately inflated for the foreseeable future.  But as natural gas development gains momentum, the prospect of exporting LNG or liquid natural gas creates the possibility of neutralizing the cost of continued oil imports.

Cross-sector economic growth

Becoming an exporter of LNG means renovating part of our transport industry, specifically converting under-utilized oil import terminals into export terminals for LNG.  According to the McKinsey report, the U.S. Department of Energy has already approved two such conversions, and is reviewing applications for 20 more.  This of course represents a “stimulus” and job creation for several years’ worth of construction, engineering, and infrastructure projects, and represents just one of the ancillary effects of the boom in natural gas.  Dramatically increased energy costs over the past several years have been a significant contributor to rising costs of goods and services across the board, whether it be transportation, electricity, heating, or nearly anything you care to name.  The cost and relative abundance of energy is one of the keys to unlocking economic growth in all sectors, which is why McKinsey’s report shows the potential impact of energy, and particularly shale gas, as far outstripping the other game-changing sectors.  It is the one sector that impacts ALL others.  Put another way, it is the one game-changing sector that can significantly hamstring all the others if it were taken out of the picture.

A cynic may point out that the only reason natural gas is booming right now it that the current administration didn’t anticipate the industry’s sudden rise, and thus did not react quickly enough to dampen it with regulation the way it has done with coal and oil.  I would argue however that trying to do so now would cause such economic harm, as well as cost so many jobs, that even this administration could not withstand the resulting outcry.  The genie is already out of the bottle, so to speak.  But as the McKinsey report points out, it remains keenly in the best interest of the gas industry to continue to develop safe, clean, and responsible methods of recovery.  Certain political cohorts—and we all know who they are!—have already demonstrated their willingness to go to completely dishonest lengths to vilify techniques like hydraulic fracturing, so it’s easy to imagine what they would do if they didn’t have to make things up.  Still, without interference from the government, or hysterical propaganda from the environmental movement, natural gas is a good reason to believe in a brighter economic future.

BREAKING: Environmentalists Holding Secret Meetings with SRP – Deal Imminent

We have learned Salt River Project has reached a backroom deal with radical enviros for a partial early shut down of the Navajo Station Generating Station to address so-called visibility issues at the Grand Canyon. The deal will cost a lot of jobs.

The secret deal was cut by what they call a Technical Working Group that apparently has been meeting for several months with EPA’s blessing. The Sierra Club did not like the discussion and they publicly stomped out of the room, but the even more radical Environmental Defense Fund stayed in. Seems they are hell bent on force-feeding a job killing deal to Arizona even though a Department of Energy study says there won’t be any visibility benefit at the Grand Canyon from more regulations. That’s because Canyon visibility is impacted by smog and car emissions coming from, you guessed it: California.

Just you wait. SRP will try to sell it to Arizona as the only compromise they can get. They will say that the well-funded extremists who are trying to shut them down have forced their hand.

It’s not true.

The truth is we need to stand up and tell Obama and the radical environmentalists to follow the law and make sure that the plant’s future is talked about in the light of day. We can’t ignore that NGS was a very public deal brokered by Congress decades ago to provide power for Central Arizona Project which pumps water across the state. Last we checked water is still essential to the state’s survival. And with this new “deal” water prices could triple, hurting our economy and families.

Most outrageous, is that some think appeasing the liberal activist agenda is more important than taking care of Arizona’s future.

Shame on SRP for caving in to these radicals, Arizona deserves better.

Submitted by an anonymous conservative activist.

Maricopa GOP Chair Rallies LD Censures

To all Arizona County and LD Republican Committee Chairmen -
Below is the front page article of the July 15 Arizona Capitol Times. I want to express my appreciation to those courageous and principled County and LD Republican Committees who have already conducted votes of “censure” and/or “no confidence.”
Jan Brewer, the legislators and their crony capitalist friends that support ObamaCare and Medicaid expansion have betrayed Americans, Arizona Republicans and the Republican Party Platform.  Their lack of ethics, integrity and egregious acts are motivated by only two things – greed and the lust for power – at the expense of hard working tax paying Americans.
The law was expected to cost $898 billion over the first decade when the bill was first passed, but this year the Congressional Budget Office revised that estimate to $1.85 trillion.  Money that will have to be borrowed from the Chinese or printed in the backroom of the Federal Reserve.  Latest polls indicate a majority of Americans are opposed to ObamaCare and Medicaid expansion with an overwhelming majority of Republicans in opposition.
During the past six months, we did everything we could to make a solid argument against ObamaCare and Medicaid expansion, we tried to reason with these people and even tried to make them see the light.  Unfortunately, our lobbying efforts fell on deaf ears and without success.
During one of Ronald Reagan’s difficult political battles he said,
               ”When you can’t make them see the light, make them feel the heat.”
I’m asking all the County and LD Republican Committees to make these people feel the heat by passing public censures for their actions.  They are elitists who think what they have done should be forgiven. They are mistaken.  We are not going to be able to defeat all of them, but we can defeat a majority of them in the 2014 Primary Election.
You can go to “MCRC Briefs” and get examples of public censures that have already been passed.  http://briefs.maricopagop.org/  Just type “censure” in the search field on the left.
Warmest regards,
 A. J. LaFaro
Chairman, Maricopa County Republican Committee
P.S.  Please encourage all of your PCs to keep up their daily efforts in getting petition signatures for www.urapc.org  Getting ObamaCare and Medicaid expansion on the November 2014 ballot will be historic for Arizona’s grassroots conservatives.

Arizona: a Champion in Education Choice, should also be a Champion in Energy Choice

Ask any conservative if they support school choice and the answer is most likely a resounding, “Yes!” School choice empowers parents, families, communities and it reasserts parental control and autonomy back into the issue of education.

While some parents choose to send their child to public school, others may choose private schools, charter schools or even home school their children themselves. Choice in education makes sense and it should make the same sense when it comes to energy choice.

Here in Arizona, conservative lawmakers have pushed and enacted legislation promoting and protecting choice in education while reducing or offsetting the cost to parents who opt out of the public education system. These creative ways to reduce the burden of public education have been in the form of donations that reduce a family’s or business tax liability. It has led to Arizona becoming one of the most prolific school choice states in the country.

Now imagine if the powerful teachers unions were able to capture control of the Arizona Legislature and Executive and began to repeal every law protecting your choice in education. Gone would be scholarship tax credits for families and business. Imagine if the public education monopoly were to control Arizona’s education system to the point where it was almost impossible for charter, private and even homeschooling families to exercise their choice in education. That’s what is about to happen right here in Arizona’s energy market.

It’s about to become very difficult for anyone using residential rooftop solar to continue using this technology to generate their own power – if APS has their way.

In recent years, improvements in technology have allowed energy consumers to afford residential-based power generation technology such as wind and solar units. Consumers have had the choice to generate their own electricity for their own personal needs and even supply excess power back to the main grid. It’s energy choice in action.

Unfortunately, big utility companies like APS see your choice as a threat to their bottom line and have started pressuring rule makers at the Arizona Corporation Commission to change the rules. Specifically, APS would like to see the ACC eliminate the policy net metering which allows energy consumers to provide any excess electricity back to the main power grid and thus reduce their overall energy consumption and cost. APS would essentially regain its monopoly power by erecting a barrier to entry to your ability to supply the grid. Overall, our main grid would lose out by not having thousands of consumers contributing clean power back to the grid.

I started out this editorial by describing how choice in education benefits everyone in Arizona by improving options and reducing the cost and burden on families and corporations. In several ways, energy choice is very much like school choice because everyone benefits, especially here in sun-rich Arizona.

When big utility companies like APS make an effort to take our choice and incentives away in order to protect their bottom line, let’s remind our elected officials whose best interest they’re supposed to serve. Siding with APS on the issue of energy choice would be akin to siding with teachers unions on education choice. Energy choice is as important as choice in education is and Arizona can demonstrate leadership in this arena. After all, that’s what Republican values are all about.

Shane Wikfors is the creator and editor of Sonoran Alliance and a longtime Arizona conservative Republican activist. He is also owner of Red Mountain Consulting & Development and has been an advocate of non-subsidized, consumer-based, taxpayer-friendly energy diversity and sustainability.

APS’ First Solar, Erecting a Barrier to Solar Energy Choice in Arizona

APS knows that Arizonans love solar, but it doesn’t want its customers to have the choice to produce their own electricity and lower their electricity bills.

That’s why APS has chosen First Solar – the one solar company that could never give consumers choice — as its wolf in sheep’s clothing, deploying the company to make APS’s monopoly arguments for them.

Let’s take a look at where First Solar is coming from when it attacks rooftop solar. Unlike rooftop solar companies, which provide solar electricity to individual homeowners, First Solar does utility-scale projects for utilities like APS, whose former CEO William J. Post sits on First Solar’s board of directors.

In its 2012 Annual Report, First Solar lays out in black and white that the success of rooftop solar could compromise First Solar’s ability to execute on their own long term strategic plans:

“We face numerous difficulties…including the following…Difficulty in competing against competitors who may gain in profitability and financial strength over time by successfully participating in the global rooftop PV solar market…”(p. 19). 

And that rooftop PV solar market is driven by consumer demand. The more homeowners are empowered to go solar, the stiffer the competition First Solar and APS face.

First Solar may face another difficulty: it has set aside a whopping $271.2 million to cover the costs of replacing defective modules it made in 2008 and 2009, according to public filings. But APS doesn’t need to be concerned about First Solar’s technology failing because the utility can just pass that cost on to the ratepayers as well. In fact, the more money ratepayers spend to build and fix APS infrastructure, the more money APS makes since it earns a guaranteed rate of return on all its expenditures—whether they promote what consumers want, or not. It’s good to be a monopoly.

It’s no surprise that First Solar CEO Jim Hughes, a 10-year veteran of Enron who led the infamous company’s global assets division during the height of the its accounting scandal but who reportedly escaped as an “unindicted co-conspirator”, opines that net energy metering, the policy that gives customers fair credit for the solar electricity they provide to the grid, and ultimately, to their nearest neighbors, is unfair.

Neither APS nor First Solar want Arizonans to be able to build their own solar projects, because if customers don’t have any choice among competitive solar companies, it makes it easier for utilities to build solar farms and pass on the entire expense to ratepayers. It’s not difficult to imagine APS putting heavy pressure on First Solar to step up to the mic. But that’s just another reason not to believe either of them.

Arizona’s APS could take a lesson from Hawaii’s HECO

I couldn’t help but notice a recent article in the HonoluluStar Advertiser recognizing shifting plates in the energy marketplace, in particular, how the Hawaiian Electric Co. is addressing technological and the consumer-based changes in energy production. How the politics of what’s happening in a blue state like Hawaii relates to the politics in a red state like Arizona is anyone’s guess but some marketplace factors are universal regardless of the political climate.

Here are a few observations on the potentially tectonic plate-shifting changes taking place in the Hawaiian Islands. Keep in mind, Hawaii is unique in that it is isolated from the broader US electric grid and therefore all electrical production, transmission and distribution is self-contained. (It’s not as if they can tap into the grid of adjacent states.)

First, Hawaiian Electric Co. (HECO) presumed it would remain the sole producer of electric power on the Islands. HECO has underestimated customer demand for newer self-sustainable technologies and lessening reliance on its big utility production. During a recent announcement by the Hawaiian Public Utilities Commission (PUC) it chastised the utility monopoly for failing to prepare for renewable energy changes. “Most startling was the assertion that “HECO companies lack a strategic and sustainable business model to address technological changes and increasing customer expectations,’” noted the Star Advertiser.

Here in Arizona, APS seems to be experiencing the same identity crisis as HECO as energy consumers take self-sustainable energy matters into their own hands through independent solar energy production. Realizing the diversification of energy production into the hands of consumers can’t help but force a paradigm shift of APS’ big monopoly mindset away from sole producer to more of an energy distributor.

As the Star Advertiser describes HECO: “Going forward, the hope is for a collaborative, open discussion on how to make the “decoupling tariff” program less onerous for consumers, and on how the utility should transition to become primarily an energy distributor rather than a producer.” The decoupling tariff relates to fees and rates consumers pay as Hawaii transitions to renewable energy technologies – technologies that consumers themselves are pursuing independent of HECO.

Finally, much like our own Arizona Corporation Commission, the Hawaiian PUC is standing up for customers by insisting that utilities and utility shareholders should have to earn profits through a sound performance and an emphasis on customer service. As Commissioner Michael Champley stated in the PUC statement, “Attractive financial returns are not a utility entitlement. Instead, excellent utility performance with affordable rates and superior customer service should drive utility financial performance.” It would behoove APS’ corporate leadership to take this same advice when approaching the Arizona Corporation Commission over rate and policy changes.

Like Hawaii, Arizona’s energy marketplace is also changing to one that is driven by innovative consumer choices, independent production and self-sustainable technology. It’s time big utility monopolies like APS realize the ground is shifting and they are no longer the only major player in Arizona’s changing energy market.

What’s Good for APS Is Not Necessarily Good for Arizona (or Solar)

The typewriter, the phone book and the payphone had their day, and the businesses that relied on them either got busy changing or got busy dying.

Despite claims made by Arizona Public Service, the utility thus far has not been open to options on net metering. APS has been trying to kill rooftop solar in Arizona, or at least change the rules to have this effect.

photo by Gage Skidmore

photo by Gage Skidmore

Rather than innovate or find ways to profit from solar power, APS decries the solar industry and opines that its revenue is heading downward. That’s not the solar industry’s problem. That’s not the ratepayers’ problem. That’s a problem for APS shareholders, and that must not be our state’s concern.

Instead of trying to fix the problem, APS is trying to fix the game. It’s looking to rig the system so the utility doesn’t have to pay fair market value for the excess electricity that rooftop solar customers send back to the grid. That’s the essence of “net metering.”

The bottom line is that this will impact APS’ bottom line. And what APS is saying is that it doesn’t want to make less money.

Rather than try to outlaw smartphones, Bill Gates developed the Windows phone. Phone companies provide cable TV service. Cable TV companies provide internet service. Internet-based companies are carrying television programs and movies. In the private sector, you either innovate or evaporate.

APS executives should have embraced net metering and seen the potential for profits. Now that they have missed the boat, they want to sink it. They have been around for so long and are so set in their ways that they don’t understand that what’s good for APS isn’t necessarily good for Arizona.

APS enjoys a healthy profit margin. Its profits have increased by more than 50 percent since 2008. Its long-term financial forecasts cite solar energy as competition that could impact profits. But instead of trying to figure out a long-term solution, APS is trying to convince the Arizona Corporation Commission to change the rules so its shareholders will continue to see generous dividends. That’s not capitalism; that’s cronyism, and I firmly believe those serving on the ACC will side with energy choice and ratepayers and stand against a utility that would rather change the rules than change its ways.

Indeed, APS’ efforts to crash the future of solar power in this state are the very reason I applauded the ACC for taking the first steps toward more utility competition in this state.

***

Former U.S. Rep. Barry Goldwater Jr. is chairman of the group Tell Utilities Solar Won’t Be Killed. He can be reached at dontkillsolar@gmail.com.

Key Sun City Group Opposes APS Solar Kill Efforts

Tell Utilities Solar Won't Be Killed

The Recreation Centers of Sun City Have Written The Arizona Corporation Commission Supporting Net Metering

(SUN CITY, Ariz.) There’s a reason they call it “Sun City.”  The Recreation Centers of Sun City have written to the Arizona Corporation Commission  expressing opposition to any plans to alter net metering, pointing out that the Centers utilize solar energy and net metering as do many of the residents of Sun City, who live on fixed incomes.

The letter read in part:

The Recreation Centers of Sun City, Inc. (RCSC) would like to express our concerns over the recent discussions regarding changing the policies surrounding net metering.  RCSC has fourteen solar projects that will be completed and online in the very near future and many of our residents in Sun City have invested in rooftop solar, because of the net metering policies that the Commission adopted.  Net metering allows RCSC and our residents the choice of solar, while also providing those on a fixed income the ability to manage their energy costs and needs.

TUSK (Tell Utilities Solar won’t be Killed) is  grateful  that entities such as RCSC embrace solar energy and net metering, which requires  Arizona Public Service (APS) to pay fair market value for any excess electricity rooftop solar customers send back to the grid. APS is seeking to kill solar energy in Arizona by attempting to end net metering as we know it. The net metering policy in place in Arizona is being used in 43 states.

TUSK Chairman Barry Goldwater Jr. said, “They say with age comes a little wisdom. That’s evident by the support expressed by our friends in Sun City. They are among the many seniors Valley wide who save money with solar.”

To learn more about T.U.S.K. visit www.dontkillsolar.com

T.U.S.K. believes that rooftop solar is similar to a charter school—it provides a competitive alternative to the monopoly. Monopoly utilities aren’t known for reducing costs or for driving business innovation, but the Arizona solar industry is. Solar companies have a track record of aggressive cost reduction in Arizona. The more people use rooftop solar, the less power they need to buy from the utilities. Energy independence for Arizonans means smaller profits for the utilities, so APS is doing everything it can to stop the spread of independent solar.

Bipartisan AZ Lawmakers Submit Letter to EPA Regarding Proposed Rule for Navajo Generating Station

Bipartisan Group of Lawmakers Submit Comments to U.S. Environmental Protection Agency Regarding Proposed Rule for Navajo Generating Station
Letter Urges EPA to Convene Public Hearings Throughout Arizona Given Dramatic Adverse Impacts of the Proposed Rule

 

STATE CAPITOL, PHOENIX (May 28, 2013) – Today, a bipartisan majority of the Arizona House of Representatives will file the attached letter with U.S. Environmental Protection Agency (EPA) Regional Administrator Jared Blumenfeld. The document urges the agency to conduct broad public hearings throughout the Phoenix metropolitan area and rural areas during the EPA’s public comment period for its proposed regional haze rule for the Navajo Generating Station (NGS) in Page, Ariz..

21 Republicans and Sixteen Democrat Members of the Arizona House of Representatives signed the letter signaling a strong, bi-partisan opposition to the proposed rule. The sweeping nature of the EPA’s proposed rule, the legislators argue, would have significant adverse impacts on Arizona families, tribes, businesses, agricultural interests and other key industries in the state through increased energy and water rates. There also is enormous risk to the Arizona’s economy as thousands of jobs and billions of dollars in lost economic activity will impact the state every year. Public hearings are needed throughout the entire state to ensure a transparent process that reflects broad stakeholder engagement and input on the rule.

“The Navajo Generating Station provides affordable energy and water to Arizona. It’s disconcerting that its operation might be undermined—or worse, shut down altogether,” said House Speaker Andy Tobin. “If implemented, EPA’s rule would drive up water rates, jeopardize jobs, and severely damage Arizona’s economy.”

The EPA’s proposed rule rejects the detailed Best Available Retrofit Technology (BART) proposal submitted by NGS’s operator, Salt River Project, and would instead impose the installation of additional technology controls that could cost as much as $1.1 billion. Incredibly, the rule would yield no perceptible visibility improvement at the Grand Canyon, according to the government’s own study. The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) concluded “the body of research to date…is inconclusive as to whether [installing additional controls] would lead to any perceptible improvement in visibility.”

NGS provides energy to the Central Arizona Project (CAP), which makes renewable, affordable water available to 80 percent of Arizona’s residents—45 percent in Phoenix alone. If NGS shuts down, or has to install these costly controls, it would result in a potential doubling or tripling of water rates throughout the state. Likewise, 3,400 skilled jobs and an estimated $20 billion in economic activity over the next three decades could be in jeopardy if NGS is forced to shut down due to the rule.

“The EPA must convene multiple public hearings in geographically diverse areas of the state so the agency can begin to understand firsthand how its proposed rule will harm the livelihood of Arizona families, businesses, and communities,” said House Minority Leader Chad Campbell. “All of us have a stake in this debate, and my colleagues from both sides of the aisle urge EPA to expand its study of the issue and ensure Arizonans’ voices are heard.”

The full letter is attached.  Signers of the letter include: 

Republicans
Andy Tobin, Speaker of the House
David Gowan, Majority Leader
Rick Gray, Majority Whip
J.D. Mesnard, Speaker Pro Tempore
Brenda Barton, LD 6
Paul Boyer, LD 20
Heather Carter, LD 15
Doug Coleman, LD 16
Jeff Dial, LD 18
Karen Fann, LD 1
Doris Goodale, LD 5
Debbie Lesko, LD 21
David Livingston, LD 22
Kate Brophy McGee, LD 28
Justin Pierce, LD 25
Ethan Orr, LD 9
T.J. Shope, LD 8
Steve Smith, LD 11
Bob Robson, LD 18
Bob Thorpe, LD 6
Kelly Townsend, LD 16

Democrats
Chad Campbell, Minority Leader
Bruce Wheeler, Minority Whip
Albert “Ahbihay” Hale, LD 7
Lela Alston, LD 24
Mark Cardenas, LD 19
Andrea Dalessandro, LD 2
Juan Carlos Escamilla, LD 4
Rosanna Gabaldon, LD 2
Lydia Hernandez, LD 29
Jonathan Larkin, LD 30
Stefanie Mach, LD 10
Juan Mendez, LD 26
Martin Quezada, LD 29
Andrew Sherwood, LD 26
Victoria Steele, LD 9
Macario Saldate, IV, LD 3

###

TUSK Launches New Ad Against 800 Lb Utility Monopoly

TUSK (Tell Utilities Solar Won’t Be Killed) released a new ad Thursday against the APS monopoly by placing ads across the banner of the Drudge Report - one of the internet’s most visited political news sites.

Here’s a screenshot of the ad across Drudge:

TuskDrudge

In the latest ad, TUSK portrays APS as the “800 Lb. utility gorilla” beating up on independent solar businesses in Arizona. Former congressman, Barry Goldwater, Jr. then explains why conservative Republicans should be leading the charge for energy choice in Arizona.

Here is a copy of the ad:

YouTube Preview Image

The message: Don’t let APS monopolize Solar Energy in Arizona. To learn more about TUSK visit www.DontKillSolar.com.

APS Stock Price, Profits Should Be Secondary to Arizona Solar Energy Consumer Choice

During their last earnings call, as reported in the Arizona Republic, Arizona Public Service (APS) CEO Don Brandt was asked about the financial impact rooftop solar could have on APS if solar’s popularity continued to soar.

RooftopSolarJust like the public education monopoly, the APS utility monopoly is concerned that more energy efficiency and choice, specifically more rooftop solar, is starting to eat into its profits and revenue growth.  APS clearly disclosed this to its investors when it revealed that between now and 2015, it expects its electricity sales to grow by less than 1% even though its customer base will grow 2% annually. The reason? APS customers are investing in more energy efficiency with rooftop solar being the primary technology of choice.

Frankly, how APS addresses this with investors is no concern of mine. And neither should it concern the Arizona Corporation Commission.  A more innovative future with more energy choices for Arizona consumers should not and must not be dictated by the utility’s bottom line. By that same logic, we would have harnessed the Internet because of the challenge it posed to newspapers and many other technologies.

I would think by now that any astute energy consumer would recognize that APS’s sudden concern about the proliferation of rooftop solar in Arizona has nothing to do with empathy for Arizona ratepayers.  It has everything to do with curbing a disruptive technology growing quickly in their existing marketplace. As one pollster has opined, allowing APS to do this would be “political malpractice.”

But there appears to be a far greater threat to APS’ stock price (PNW) on the horizon and that, fortunately for consumers, is a healthy competitive change.  Because of their blatantly naked attempts to kill independent solar in Arizona, along with other reasons, the Arizona Corporation Commission is rightfully looking at opening up more utility competition in Arizona.  In fact, they took the first step down this path last week. Kudos to Chairman Bob Stump and Commissioners Gary Pierce, Brenda Burns, Susan Bitter Smith and Bob Burns for their actions. Clearly, APS’ effort to thwart more solar choice in Arizona is exactly why we need more competition in Arizona.

Choice and competition – these are concepts all conservatives can rally behind.  And it is one all Wall Street stock investors will surely be watching.  The bottom line for consumers is we simply cannot have a better energy future in Arizona if the primary focus is on APS profits rather than innovation and competition that always best serves the marketplace.

APS Wrong. Solar Saves Ratepayers, New Study Shows

Tell Utilities Solar Won't Be Killed

Rooftop Solar Generates $34 Million A Year for APS. APS’ Customers – Not Shareholders – Should Reap This Benefit

(SCOTTSDALE, Ariz.) A new study shows that rooftop solar and net metering generate a windfall for Arizona Public Service (APS). Rooftop solar generation provides APS with $34 million in benefits each year.

TUSK (Tell Utilities Solar won’t be Killed) is calling on APS to give back the windfall it has made from rooftop solar energy.  $34 million a year should be returned to APS customers in the form of lower rates, not put into the pockets of a giant monopoly and its shareholders.

TUSK Chairman Barry Goldwater Jr. said, “In free enterprise, those who make the investment should reap the rewards. APS has not invested in private rooftop solar. Rather, the utility has been trying to kill the industry to limit competition. And for that, they deserve no reward.”

Net metering allows people who invest in rooftop solar to receive fair credit for the power they send back to the grid. It is a simple policy – used in 43 states today – that works very much like rollover minutes on a cell phone bill.  Solar is far and away the most popular source of energy in the eyes of Arizonans, but to APS, rooftop solar has become a competitive threat to its monopoly.  By working to get the Corporation Commission to change net metering rules, APS is attempting to kill the thriving independent rooftop solar market in Arizona in order to protect its monopoly interests and overwhelming profits.

Rooftop solar is a free market enterprise built by the private investments of homeowners and businesses that install solar panels on their roofs. School districts have also invested in rooftop solar.  Through these investments, schools are saving taxpayers millions of dollars while home and business owners are saving money on their electricity bills.

The study showing that solar provides a $34 million benefit to non-solar customers was commissioned by the Solar Energy Industries Association (SEIA) and authored by Crossborder Energy. Using APS and energy market data, the study found that in addition to providing benefits to solar adopters, like control and savings, rooftop solar provides benefits all APS customers.  For each dollar of cost, rooftop solar generates $1.54 in benefits to all APS customers.

There are several ways that rooftop solar benefits all APS customers.  First, rooftop solar enables APS to spend less money on purchasing power and building expensive conventional power plants. Second, APS can also avoid or delay investments in transmission and distribution infrastructure, because electricity is being generated at the same place it is consumed.  In addition, rooftop solar saves APS money on ancillary service costs, capacity reserve costs, avoided renewables costs, and by providing environmental benefits, like lower air pollution emissions and less water use.  To learn more about the study and see the full results, click here.

To learn more about T.U.S.K. visit www.dontkillsolar.com

T.U.S.K. believes that rooftop solar is similar to a charter school—it provides a competitive alternative to the monopoly. Monopoly utilities aren’t known for reducing costs or for driving business innovation, but the Arizona solar industry is. Solar companies have a track record of aggressive cost reduction in Arizona. The more people use rooftop solar, the less power they need to buy from the utilities. Energy independence for Arizonans means smaller profits for the utilities, so APS is doing everything it can to stop the spread of independent solar.

New Study: Distributed Solar Energy Provides $34 Million in Benefits to Arizona Ratepayers

More information on the debate taking place to eliminate net metering and energy choice in Arizona. This is reposted from The Solar Energy Industry Association:

WASHINGTON, DC – A study released today shows that distributed solar generation (DG) and net energy metering will provide Arizona Public Service (APS) customers with $34 million in annual benefits.

The study was commissioned by the Solar Energy Industries Association (SEIA) and was authored by Tom Beach of Crossborder Energy. Using data from APS’ 2012 Integrated Resource Plan and other APS data, the study examines the costs incurred and the benefits generated by distributed solar over the useful life of a distributed solar system — 20 years. This is consistent with how APS approaches long-term resource planning.

The study found that for each dollar of cost, DG provides $1.54 worth of benefits to APS customers. The net benefits for APS customers will amount to $34 million per year beginning in 2015. Benefits include savings on expensive and polluting conventional power and power plants; reduced investments in transmission and distribution infrastructure; reduced electricity lost during transportation over power lines, as distributed solar power is generated and consumer locally; and savings on the cost of meeting renewable energy requirements.

“This study clearly shows that solar offers concrete net benefits to all APS ratepayers, regardless of whether or not they have installed solar” said Carrie Cullen Hitt, senior vice president of state affairs at the Solar Energy Industries Association (SEIA). “It’s essential that we keep smart policies like net metering in place so that Arizona can continue to benefit from its abundant solar resources.”

Net metering is a popular consumer policy in place in 43 states that empowers homes, businesses, schools, and public agencies to install solar while helping the economy and other ratepayers. As a result of thousands of Arizonans’ choice to adopt rooftop solar, a competitive solar energy industry employs 9,800 Arizonans today.  Arizona boasts the most solar per capita of any state in the nation with 1,097 megawatts (MW) of solar capacity. Beyond making a smart energy choice, this study shows that these customers’ investments provide financial benefits to all APS customers. Overall, Arizona ranks 2nd in the country for most installed solar, with enough capacity to power 139,000 homes. In 2012 alone, $590 million was invested in Arizona to install solar on homes and businesses.

“Arizona has become a national leader in the use of distributed solar energy.  This is due to net metering and other policies put into place by the Arizona Corporation Commission and Legislature. In order to maintain this leadership role, it is imperative that these consumer-friendly policies remain in place,” says Michael Neary, former executive director of AriSEIA, the Arizona SEIA chapter.

The full Crossborder Energy Study is available here.

About Crossborder Energy:
Crossborder Energy has deep analytical experience in the energy field, and has participated actively in many of the major energy policy debates over the last 30 years, including the addition of new natural gas pipeline capacity to serve California and the restructuring of the state’s gas and electric industries. Crossborder Energy provides expert testimony, strategic advice, market intelligence, and economic consulting services on market and regulatory issues in the natural gas and electric industries in California, the western U.S., Canada, and Baja California, Mexico.

About SEIA®:

Established in 1974, the Solar Energy Industries Association® is the national trade association of the U.S. solar energy industry. Through advocacy and education, SEIA and its 1,000 member companies are building a strong solar industry to power America. As the voice of the industry, SEIA works to make solar a mainstream and significant energy source by expanding markets, removing market barriers, strengthening the industry and educating the public on the benefits of solar energy. www.seia.org

Background Materials:
The Costs and Benefits of Solar Distributed Generation for Arizona Public Service, May 10, 2013: http://www.seia.org/research-resources/benefits-costs-solar-distributed-…
U.S. Solar Market Insight: 2012 Year in Reviewwww.seia.org/smi
- The Solar Foundation’s State Solar Jobs Map: www.solarstates.org