Local opinion: Arizona Corporation Commission elections are critical to electricity cost

As summer temperatures continue to reach all-time highs in Tucson, energy costs have followed the same trend and increased substantially in the past decade. In a city where not having electricity is a serious threat to one’s life, Tucson’s residents can either make economic sacrifices to pay their electric bills or brave the intense heat and the risks that come with it. Yet Tucson Electric Power (TEP) has asked the Arizona Corporation Commission (ACC) to approve a 14% rate increase. If history is a guide, this latest request will be slightly reduced and approved. Requested rate increases of ~8% in 2019 and ~12% in 2022 were slightly reduced and approved. Your electricity bill will go up just as it did in 2020 and 2023, partially because the cost of electricity is reliant on an outdated system that has been captured by for-profit companies.

Until recently, electricity flowed one way — from a power plant to a customer. Building that power plant, buying fuel, installing wires and poles, and hiring maintenance staff was and is expensive. To pay those costs, Tucson and Phoenix turned to for-profit private companies: Phoenix to Arizona Public Service (APS), currently owned by Pinnacle West Capital Corporation, and Tucson to TEP, currently owned by Canadian holding company, Fortis Energy. Both are guaranteed a 9.5% return on investments in generation, transmission and distribution of electricity. The Arizona Corporation Commission oversees rate increases to keep those private for-profit companies financially healthy and consumer costs affordable.

But the ground has shifted. Electricity no longer flows one way. It can flow from you to them if you have rooftop solar panels. A distant million-dollar powerplant can be replaced by a nearby solar farm. Excess electricity can be stored in utility-scale batteries for dispatch at night. These changes have made renewable energy the cheapest, most reliable, safest and cleanest way to produce electricity. Why then are we still using coal or gas? Because the higher cost of coal and gas plants generates more profit.

Whether a private utility company spends $100 million on a solar farm or $200 million for a gas turbine power plant, it will get 9.5% on its investment. Greater spending results in greater returns, and these are for-profit companies. Your customers must have electricity, and you can get approval to raise their rates to pay you back that $200 million dollars plus 9.5% on your investment. All you have to do is convince the ACC that you made a “prudent” decision based on the company’s financial health.

Consequently, both Fortis Energy and Pinnacle West Capital want the ACC staffed by supportive commissioners. The ACC election is down ballot, the names are largely unknown, and their decisions don't make front page news, allowing private companies to put their thumb on the scale.

In 2014, Pinnacle West Capital spent $3.8 million in dark money to support the election of ACC candidates favorable to them. In 2016's election, they reported spending of $4.1 million. In 2018, they spent $40 million to defeat Proposition 127, which would have accelerated the use of renewable energy. TEP’s owner Fortis Energy frequently charges its employees with submitting self-congratulatory articles supporting a business-as-usual narrative of electricity produced by fossil fuels. Only an informed electorate can change this by voting for ACC members who are not in the pocket of private companies. Down-ballot elections are very important. In November, we will elect two people, either Republicans or Democrats, to the Arizona Corporation Commission.

The three Republicans running in the primary are incumbents, Kevin Thompson and Nick Myers and ex-legislator Ralph Heap. Incumbent Republicans have been friendly to Pinnacle West and Fortis Energy. Ex-legislator Ralph Heap co-sponsored legislation to restrict the use of less expensive renewable energy.

They will be opposed by Democrats Jonathon Hill and Clara Pratt, who will leverage engineering and scientific expertise to protect us from unnecessary and excessive rate hikes. If we want cheaper electricity, cleaner air, cleaner water, better health and a better future, our choice should be clear.