Bob Stump: Why is Airbnb funding a group attacking Arizona Republicans?

All you Airbnb fans take heed! The company has decided to inject itself into Arizona politics by funneling dark money against Republicans. In this letter, former Arizona Corporation Commissioner Bob Stump hits back with an email to Arizona legislators.

Bob StumpDear Honorable Member:

It is rare for me to contact you as a private citizen and former colleague. I believe this issue is important enough to merit it.

An extremist far-left organization, Checks and Balances, is active again in Arizona. Yet again, it is attacking elected Republicans.

I fully expect Republican members of the House and Senate to be next.

Airbnb, which has enjoyed a friendly regulatory environment in Arizona thanks to you, is funding Checks and Balances. According to Penn State’s Daily Collegian, “Airbnb representative Nick Papas said Airbnb supports the work CBP does.”

What exactly is this “work”? Smearing, suing or harassing Arizona Republican officeholders such as Arizona Attorney General Mark Brnovich, members of the Arizona Corporation Commission — including four Commission chairs — and yours truly.

Consider the “work” of the group Airbnb supports financially:

In an act of pure malice, Checks and Balances published my mother’s private mobile number on the Internet.

At a cost of hundreds of thousands of taxpayer dollars and staff time, and with the help of Democratic activist Dan Barr, Checks and Balances sued the Arizona Corporation Commission in an attempt to break the chain of custody of my phone and publish private text messages to my family and friends. Despite Checks and Balances’ conspiratorial fantasies, I was vindicated in court: Two judges determined that nothing retrieved from my phone met the definition of a public document.

Undeterred by losing in court every single time, Checks and Balances has taken to the pages of the Arizona Capitol Times to attack Arizona Corporation Commission Chair Tom Forese and Commission legal counsel Tim LaSota, who defended me in court.

Until recently, SolarCity, the nation’s largest solar rooftop leasing company, sponsored Checks and Balances. SolarCity’s aim was to attack and sue sitting regulators nationwide, in an attempt to alter regulatory outcomes and thereby enhance SolarCity’s bottom line.

SolarCity was shamed into withdrawing their support for Checks and Balances.

It is past time for Airbnb to follow SolarCity’s lead and cease funding a mercenary band of character assassins which exists to intimidate citizens at the behest of its corporate sponsors.

Airbnb’s CEO, Brian Chesky, ignored my letter to him, written when I was a sitting member of the Arizona Corporation Commission. Perhaps he will be more responsive to you.

I would suggest you contact Mr. Chesky and his lobbying team and ask why Airbnb is funding an unsavory group that sues and smears Arizona Republicans.

Thank you for your attention to this matter. And thank you for your service to our great state.

Sincerely yours,

Bob Stump

Former member and Health Committee Chair, Arizona House of Representatives (2002-2008)
Former Commissioner and Commission Chair, Arizona Corporation Commission (2008-2017)

Guest Opinion: Demand-based rate strategy makes sense

Media coverage of the electricity rate case filed by UniSource Energy Services (UES) has promoted dire predictions from California-based rooftop solar leasing companies that oppose the proposal. We encourage every utility customer to consider the facts of the UES case.

UES has proposed residential rates that reflect both total energy use and peak energy use, or “demand.” This makes sense because utility costs are driven by the need to satisfy customers’ energy demands during peak periods. Arizona business owners have been paying demand-based rates for years and have found them to be fair, simple and easy to use. They include a basic service fee, a relatively low usage-based charge and a demand charge that’s based on their highest monthly power use.

Critics claim demand rates are “too confusing.” As smart thermostats and app technology grow ever smarter, this claim falls short. Demand rates give consumers a new way to save money by managing their use of electric appliances during peak usage periods. Smart technology can help customers take advantage of demand rates to lower their bills significantly. At the same time, reducing energy usage during peak times helps ensure the stability of the power grid statewide.

Because demand charges would be offset by lower energy use charges, most residential customers would see little impact from the proposed change. In fact, the UES proposal protects customers by reducing the generous subsidies handed to rooftop leasing companies at the expense of the 98 percent of consumers who don’t have solar. That’s why we’re hearing the loud voice of protest from the solar industry’s PR machine. UES’s proposal will create a sustainable free market for clean energy and send the right price signals to encourage future energy innovation. That’s important to every Arizona business. All of us want our state to stay at the forefront of the clean energy movement and to continue to create jobs in that growing sector.

Unfortunately, jobs have become a political pawn for the rooftop leasing companies. In Nevada, these companies fired their own workers and fled the state as punishment after policy changes took the brunt of subsidy payments off the backs of non-solar customers. They’ve threatened the same punitive behavior in our state. This “take our toys and go home” approach will hurt Arizona families and our economy. As reputable case studies and testimony explain in detail, rooftop leasing companies can continue to make ample profit under a demand rate structure should they elect to compromise, rather than litigate and flee to other states where generous profits are still to be had on the backs of non-solar customers.

Using employees’ paychecks as a bargaining chip is wrong. So is intentionally disrupting the businesses of local installers – the very people the California-based national giants once claimed they wanted to help.

Arizona needs an energy policy that encourages a broad array of technologies and the highest degree of freedom and fairness for all power users. The more control consumers have – absent subsidies paid by the vast majority of power users to fund technology for the few – the better off our state will be. To hear the rooftop solar leasing companies tell it, you would think the goal of energy policy should be whatever helps them sell the most systems at the largest profit.

We take a broader view. We sincerely hope the Arizona Corporation Commission will take that broader view as well.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry. Lea Marquez Peterson is the president and CEO of the Tucson Hispanic Chamber of Commerce.

The Economics and Politics of Solar Net Metering

It’s been some time since I’ve written on the topic of solar energy and the utility industry. This area has always interested me given my background in nuclear power, energy services and Arizona politics. In recent years, my curiosity with the off-grid lifestyle and homesteading has also fueled that interest.

Originally, I wrote from the perspective that the big utility monopolies were taking advantage of ratepayers by pushing for changes in net metering that would result in hurting the rooftop solar industry. It was the classic David vs Goliath narrative.

That was incorrect.

What further economic and policy research revealed was that the solar industry was actually being heavily subsidized by ratepayers via cost shifting from solar customers to non-solar customers. In other words, the full and long-term cost of energy was being redistributed from the solar haves to the solar have-nots.

Rooftop solar is still fairly expensive to the average consumer. It can cost tens of thousands of dollars in up front cost to purchase a full system for your home. Cost is one of the main reasons why the vast majority of consumers opt for a lease arrangement

Rooftop solar companies and policy makers figured out early on that they needed to create an incentive for consumers to move toward expensive solar. Thus, net metering was established.

You’ve probably heard about selling your solar energy back to the grid or spinning your meter backwards. This is an arrangement in which a customer who is generating electricity from their solar panels is sending any excess electricity back to the grid for distribution to other energy users. This practice reduces the energy cost to the solar customer by creating a credit. Utility companies have been crediting consumers at a retail rate rather than a wholesale rate. That retail rate is above the true market value of electricity and is actually a cost to utility companies which have to operate and maintain the grid. Those costs are ultimately shifted over to non-solar users who pick up the tab for not having solar.

Here’s a video put out by a electric cooperative that helps explains the cost shifting.

As you can guess, this was driven by policy makers who wanted to create an incentive for consumers to transition to cleaner solar energy generation and away from a dependency of fossil fuels – a laudable goal.

But there’s also a political motive in driving consumers to solar. As part of the leasing arrangement, some rooftop solar companies sell the excess energy back to the utility companies at the higher retail rate and pocket the difference above the wholesale rate and why shouldn’t they?

The rooftop solar industry found a way to “rent seek” and use public policy to protect the practice – even at a cost to the broader energy market

This reminds me of another moment in Arizona history when the Arizona legislature passed a law creating a tax credit for those who purchased or converted their vehicles to run on alternative fuels. Almost overnight, an industry of alt-fuel conversion companies sprung up in Arizona. Thousands sought conversions and these companies benefited from the special law. What was supposed to cost Arizona taxpayers $10 Millions ended up costing $200 Million. It was a major public policy failure that demonstrated the law of unintended consequences at the cost of Arizona taxpayers.

Here in Arizona over the last two years, the rooftop solar industry and utility companies have been engaged in a heated battle over the economics of solar energy and net metering policy. Ultimately, the Arizona Corporation Commission decides on any changes to policy which may include an adjustment in the rate that ratepayers sell back their solar electricity to the grid.

Rooftop solar companies like SolarCity have insisted that any reduction in the net metering rate will take the incentive away from consumers to go solar therefore hurting the Arizona rooftop solar industry. APS argues that non-solar ratepayers are paying the cost to maintain the entire grid while solar-users are being subsidized.

Corporation Commissioners have tried to broker a compromise with industry leaders. Meantime, the politics of this battle continue to play out as challenger candidates threaten to replace current commissioners and special interest groups promise to engage in the 2016 election.

The problem with net metering may all be resolved by this summer as other proposals emerge. One indication of a solution may be seen over the next few weeks as one smaller Arizona utility offers an alternative to how it bills residential ratepayers. That alternative is called “demand charges” and I’ll explain in a later post how it provides a workaround to the problem of net metering.