Local Opinion: What comes after Prop. 412

The rejection of Proposition 412 provides Tucson with the opportunity to try an approach to generating and distributing power not tied to 100 year-old technology. The invention of the solar cell has eliminated the necessity for electricity to be generated and transmitted from far distant locations.

However, instead of being in the vanguard of the transition to renewable energy, TEP has been dragging its feet, offering cost and reliability as excuses. The climate and health costs of burning fossil fuels, called “externalities” by economists, are now obvious. We just have not had to pay them on our power bills. But with TEP’s foot-dragging, we are now talking real money.

Instead of investing in energy storage, from 2018 to 2020 TEP invested $355 million in the purchase of new natural gas generators. Both TEP and the Arizona Corporation Commission (ACC) should have known natural gas prices were artificially low. Fracked oil fields are characterized by a rapid decline in output after a few years’ operation. Their initial abundance was achieved by a stampede of fracking companies drilling with borrowed money who later went bankrupt.

In a 2016-2017 solicitation, Colorado’s Xcel energy received a bid to furnish solar WITH storage for 3 cents a kilowatt-hour. TEP’s customers are now paying 2 cents a kilowatt-hour just for increased fuel costs.

The state’s utilities are said to love solar — if they own it. That doesn’t appear to be true for storage. According to the National Renewable Energy Laboratory (NREL), had TEP purchased batteries at conservatively estimated 2020 market prices instead of gas generators, it could have acquired 205 megawatts of storage.

The Internet provides the electric utility industry with a model for reliability. Geographically dispersed servers pass information packets from and to users in their immediate proximity. But they can also relay packets originating on other servers if normal routing becomes congested or unavailable. This is the concept underlying microgrids, except what is being passed is power not packets.

Microgrids require both distributed generation and storage (DGAS) of power. If power is generated on your rooftop or close to where you live and stored in utility-scale batteries it doesn’t have to go very far. The obstacles to DGAS are institutional not physical. Critics of solar energy complain about the large land surface area required to generate power. But it is hard to take them seriously when one sees the rooftops and parking lots that remain uncovered.

It is difficult to understand how renewable energy generated by their customers at no cost to TEP can drive up costs for customers who don’t have solar. Electric utilities say the problem is surging energy production, beyond what the grid can absorb during peak production hours. The obvious solution would be to add more storage. Utilities can add storage less expensively than their customers (NREL) — and use it much more efficiently.

Instead, TEP opted to buy the gas generators, many of which sit idle for good parts of the year. The ACC uses return on equity as a major criteria in determining profits to which utilities are entitled. TEP is requesting 9.25% this year. A better guide for determining their profits would be how much they save their customers, not how much they spend to produce power.

We need a central authority to manage the grid, whether it is a private utility or the city. But we don’t need it to OWN the grid. Cost, sustainability, and reliability should determine how the city’s power is generated and distributed, not the profits and salaries of TEP’s stockholders and management. TEP’s customers may soon even be able to economically store their own power in the batteries of vehicle-to-home and vehicle-to-grid capable EV’s now coming on the market.