The following is the opinion and analysis of the writer:
Matthew Gonzales
Arizona’s families and businesses are facing a pivotal moment in terms of electricity: How much they will pay for it, how it will be delivered and how the state will meet forecasts of electricity demand growth of as much as 60% over the next 30 years?
The decisions made today by Arizona’s regulators will shape that future. As a national consumer advocacy organization, Consumer Energy Alliance pays particular attention to the role regulators play in ensuring affordable, reliable and cleaner energy for families and businesses.
The Arizona Corporation Commission (ACC) plays a pivotal role in ensuring that three-legged stool — affordable, reliable and cleaner — stays upright.
One of the foremost concerns for Arizona residents is the cost of electricity. The ACC has demonstrated its commitment to affordability through various initiatives aimed at stabilizing energy prices by eliminating subsidies and mandates that hurt consumers. They’ve also trimmed the fat from utility rate cases.
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Additionally, by requiring utilities to seek least-cost generation options through all-source Requests for Proposals and encouraging investment in cost-effective technologies, the ACC has helped to keep rates below the national average while positioning the state’s utilities to meet current and future electricity demand growth. That growth is forecast to exceed 30% and by one estimate, 60% over the next 30 years due to population and economic growth alone.
Arizona has witnessed remarkable growth in recent decades, and that momentum shows no signs of slowing. According to the Maricopa Association of Governments, population in the state is projected to grow to 10.8 million residents by 2050. Not only is Arizona becoming more populous, the state is attracting investment from companies across America and the globe that will create well-paying jobs in emerging industries.
In late 2021, Intel broke ground on two new leading-edge chip factories at its Ocotillo campus, investing $20 billion additional dollars in Chandler. Intel’s multi-billion-dollar investment is not a one-off for Arizona; TSMC is planning $65 billion worth of investments in north Phoenix for three new chip fabrication plants. In addition to semiconductors, Arizona has become a hub for the electric and alternative fuel vehicle supply chain with innovative companies like Lucid Motors, Nikola Motors, LG Energy and Kore Power all choosing to manufacture their products in the state.
Whether it’s meeting new residential or economic demand, one thing is certain: as Arizona continues to grow, so too, does the need for reliable, affordable and ever-cleaner electricity. While public utility commissions around the country grapple with how to manage the impending power demand boom associated with advanced manufacturers, data centers, artificial intelligence and transportation electrification, the ACC has approved utility plans to meet the needs of the future with thousands of megawatts of additional wind, solar and natural gas-fired generation; and battery storage.
The diverse mix of resources expected to come online exemplifies Arizona’s embrace of an inclusive energy approach. Some states cannot do the same because they refuse to recognize the enduring role of natural gas in stabilizing the grid, particularly as intermittent renewable sources like solar and wind become more prominent.
Arizona has been practical about the reality of electricity production and avoided the hype. This approach ensures the energy needs of the state are met while paving the way for a cleaner future — one that reduces Arizona’s carbon footprint while also ensuring that the most vulnerable can trust that the air conditioning will run during prolonged heat spells.
This balanced approach is crucial to meeting the state’s needs by ensuring utilities are providing reliable, affordable, and cleaner energy for all residents; all while meeting the critical infrastructure requirements of the businesses that power Arizona’s economy – now and in the future.
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Matthew Gonzales of Cimarron, N.M., is Southwest Executive Director for Consumer Energy Alliance and Vice Chairman for the National Hispanic Energy Council.
