by Corinne Murdock | Feb 7, 2024 | News
By Corinne Murdock |
A coalition of grassroots advocacy groups is asking the Arizona Corporation Commission (ACC) to reject Environmental, Social, and Governance (ESG) efforts by energy companies, citing the impact to consumer well-being.
In a letter sent last week, representatives of Heritage Action for America, EZAZ, and Heartland Impact, led by the Arizona Free Enterprise Club (AFEC), expressed concern for the impact on utility rates and energy reliability that ESG implementation poses under plans submitted by APS, TEP, and UNS. The grassroots claimed that the three companies have deprioritized cost and efficiency in pursuit of voluntary climate goals.
“The Commission has a constitutional obligation to ensure just and reasonable rates and a statutory duty to ensure adequate provision of service,” stated the organizations. “That means ensuring reliable, affordable, and plentiful energy in the state, which should be the mission of this Commission. But these ideological environmental commitments do the opposite, and for that reason, they should be rejected.”
The grassroots leaders also expressed concern with the relationship between ESG and a greater political agenda to achieve “net zero” carbon emissions by 2050. In order to achieve net zero, companies would have to drastically reduce, if not eliminate totally, usage of coal, gas, and oil in exchange for renewable energies such as solar and wind.
In their letter, the organizations pointed out the intermittency — and therefore unreliability — of renewable energies. They referenced the power failures and high rates experienced by states and countries further along in their net zero journey, citing specifically California, Texas, and Germany.
The grassroots leaders maintained that ACC has the authority to prevent energy companies from quitting traditional energies and using ratepayer funds to subsidize renewables.
Utility companies previously rejected an increased reliance on renewable energies as recently as 2018, the letter noted, over concerns that such a move would greatly increase costs for ratepayers. They also cited 2021 ACC cost analysis, which found in part that a total transition to renewables could incur a $6 billion cost to ratepayers, averaging hundreds of dollars more a month, by 2050.
Last year, AFEC issued an analysis comparing the energy mandates of the 10 states with the highest electricity rates and 10 states with the lowest electricity rates. Per that report, nine of the 10 states with the highest rates had some form of mandates requiring renewable energy usage, while seven of the 10 states with the lowest rates had no mandates at all.
The report estimated that states with renewable energy mandates paid, on average, close to double what their peers in mandate-free states paid.
In a press release, AFEC President Scot Mussi blamed leftist politicians for the ESG push.
“Liberal activists and politicians in Arizona are seeking to harm our energy future, freedoms, and choices by forcing their radical and failed ESG policies on consumers,” said Mussi.
As AZ Free News reported last November, the executives overseeing those three companies have financial incentives to meet ESG criteria.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
by AZ Free Enterprise Club | Dec 22, 2023 | Opinion
By the Arizona Free Enterprise Club |
If someone wants to own an electric vehicle (EV), it is perfectly within their right to do so. That’s what it means to have freedom. But EV owners should be the ones to bear the burden of any costs associated with the necessary infrastructure improvements. And they should absolutely be responsible for paying for any excessive demand placed on the grid.
But that’s not the way the left sees it.
As part of its Green New Deal dream, the left has been pushing an agenda that significantly increases the amount of EVs on the road despite slowing demand from consumers and companies like Ford losing billions on them just this year. And Arizona utilities have fallen right in line, planning for 1 million EVs by 2030 while APS alone plans to have a 100% “carbon free” vehicle fleet as part of its commitment to go “Net Zero” by 2050.
So, how exactly was APS planning to do this?
>>> CONTINUE READING >>>
by AZ Free Enterprise Club | Dec 9, 2023 | Opinion
By the Arizona Free Enterprise Club |
A History of Harmful Mandates
Arizonans have faced repeated attempts over the last six years by various interest groups to impose costly Green New Deal energy mandates on utility ratepayers. In 2018, liberal billionaire Tom Steyer bankrolled a statewide ballot measure to require utilities to obtain 50% of their energy from renewable sources by 2030. Voters realized the danger of this California-style energy plan and rejected it by a 2 to 1 margin.
Immediately after the Steyer initiative failed at the ballot, the Arizona Corporation Commission began considering their own green energy mandate to completely ban fossil fuel generation in Arizona by 2050. The Commission’s plan was even more radical than the energy initiative, and this time the mandate was being pushed by our regulated utilities, not far left radicals. This caught most observers by surprise—the utilities were among the opponents of the Steyer initiative, and now they were cheerleading energy mandates.
Why the change of heart by our monopoly utility providers? The reason is simple—they knew that if the Commission adopted official policy requiring Green New Deal mandates, they would be guaranteed full cost recovery from their captive ratepayers. After fierce opposition from ratepayers and organizations like the Free Enterprise Club, this proposed mandate was rejected by the Commission in early 2022.
Unfortunately, this victory for ratepayers was short lived. Almost immediately after the Commission voted to reject costly energy mandates, the utilities announced that they would be implementing their clean energy agenda anyway, irrespective of what their captive ratepayers thought about it. This didn’t come as a total surprise, considering these utilities have gone all-in on Environmental, Social, and Governance (ESG) and the accompanying “Net Zero” commitments to ban fossil fuels in their SEC filings to shareholders, which our organization began advocating against at the Commission earlier this year.
We told the Commission that if the utilities are allowed to operate under ESG, every downstream policy decision would be shaped by it—ultimately resulting in massive ESG rate hikes for Arizona ratepayers. Based on the energy resource plans submitted by the utilities last month, it appears our predictions have been proven correct…
>>> CONTINUE READING >>>
by Daniel Stefanski | Nov 6, 2023 | News
By Daniel Stefanski |
A coalition of Arizona’s Corporation Commissioners have reached out to the state’s governor over concerns of rising prices for a subset of constituents.
Last month, four state commissioners wrote a letter to Governor Katie Hobbs to ask her to address the overwhelming price increases for electricity customers of the San Carlos Irrigation Project (SCIP). The signatories to the letter were Kevin Thompson, Lea Marquez Peterson, Nick Myers, and Jim O’Connor – all Republicans. Commissioner Anna Tovar, the lone Democrat on the panel, did not add her name to the letter.
The commissioners asserted that the change in costs was “purportedly related to the U.S. Department of Interior Bureau of Indian Affairs’ application of new purchased Power Cost Adjustment agreements which soared to $0.056 per kilowatt hour,” adding that “neither the Arizona Corporation Commission nor the State of Arizona has any regulatory authority over SCIP.” These added costs – on top of the customers’ electric power rates – has more than doubled the payments for many within this jurisdiction.
The lack of state jurisdiction in this matter means that the federal government would need to come to the table to resolve the crisis at hand – something that the commissioners asked Hobbs to facilitate. According to the commissioners, former Congressman Jim Kolbe had attempted to take care of this issue in the early nineties, when he introduced the San Carlos Indian Irrigation Project Divestiture Act to “complete divestiture and free SCIP customers from federal authorities.” Though this legislation passed the U.S. House and Senate and was signed into law by then-President George H.W. Bush, the policies apparently “never manifested into reality,” leading to this current unraveling of financial security and stability for these ratepayers.
In an exclusive statement to AZ Free News, Commissioner Kevin Thompson, who led the letter to the governor, said, “SCIP ratepayers are facing a terrible situation that is going to require officials at every level of government to work together like adults and find a solution for Arizonans that have been abandoned by the federal government.”
Thompson added, “Access to affordable electricity in a state like Arizona is a matter of life or death for too many and shouldn’t be a partisan issue. While the Commission has no authority over SCIP, I feel it is important to urge our leaders to explore meaningful solutions and act. These four Commissioners are willing to do whatever we can in our individual capacities to encourage our delegation and state government to put aside partisanship and get the federal government out of the business that private enterprise should be providing.”
The commissioners, in their communication to Hobbs, shared several potential solutions to the matter, which include exploring “divestiture of SCIP with the end goal of transferring generation, transmission, and customer responsibility to regulated Arizona utilities,” requesting “federal funds to provide necessary maintenance and improvements to the SCIP grid,” and researching “financial protections that can be provided to SCIP customers to increase the safety net and protect vulnerable ratepayers.”
They ended their letter with a plea for the governor and her team to do everything in their delegated authority to assist the afflicted Arizonans, saying, “It should be acknowledged that we recognize the vast majority of potential long-term solutions are outside of your control and authority as governor. However, like us, we know you are looking for meaningful solutions, and we would appreciate your willingness to advocate for Arizona ratepayers.”
This situation affecting SCIP customers has also attracted the attention of Senate Pro Tempore T.J. Shope, who issued a press release on October 23 to announce his “extreme frustration” with Hobbs’ “lack of care, concern, and action with skyrocketing power bills detrimentally impacting residents living in the SCIP.” Shope was less diplomatic in his statement than the commissioners were in their letter, writing that “Governor Hobbs is displaying she’s nothing more than an accomplice in Biden’s scheme to impose a radical energy agenda with attainable environmental goals, all for political gain, by ignoring the financial pain our citizens are experiencing.”
Before Shope went public with his comments about Hobbs’ handling of this situation, he led an October 3 letter to the governor, along with Senate Majority Whip Sine Kerr, House Majority Whip Teresa Martinez, and House Energy Committee Chair Gail Griffin, asking the state’s chief executive to “find a way to provide relief for the negatively impacted residents of the SCIP and push back against the Biden-Harris Administration on behalf of the ratepaying citizens of our state held hostage to the federal government.” The legislators’ letter echoed some of the sentiments from the commissioners’ letter, including the fact that “the legislature and Corporation Commission do not have the authority to remedy this crisis for residents because SCIP is a rare utility wholly managed by the federal government.”
As of October 23, Shope and his signatories had not heard back from the Governor’s Office about their letter. This lack of response by Hobbs led the Senator to believe that she was complicit “with Biden’s radical environmental agenda jeopardizing the financial security of Arizonans.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Corinne Murdock | Oct 20, 2023 | News
By Corinne Murdock |
The Arizona Corporation Commission (ACC) is refusing to ban the implementation of Environmental, Social, and Governance (ESG) policies in monopoly utilities operating in the state, claiming that they lack the authority to do so.
The ACC issued its declaration in response to several letters petitioning a prohibition against ESG implementation by utilities under its purview. Two of those letters came from the Arizona Free Enterprise Club (AFEC), and one came from former ACC commissioner Justin Olson.
In AFEC’s first letter, issued in late August, AFEC President Scot Mussi made the case that ESG goals and initiatives would result in unreliable services and increased costs for ratepayers. The Arizona Constitution requires the ACC to ensure utilities have “just and reasonable rates” as well as practices that result in the “convenience, comfort, and safety, and the preservation of the health” of users.
“The truth is that a forced ‘transition’ to these resources, as required by ESG, would cost ratepayers $6 billion,” stated Mussi. “This fact alone should require the Commission to prohibit it, as this body is constitutionally obligated to ensure just and reasonable rates.”
In 2021, the ACC rejected a proposed mandate for utilities to generate their resources entirely from renewables such as wind and solar following an independent study estimating the cost to ratepayers at $6 billion. Even without the ACC mandate, the state’s utilities have committed to realizing Net Zero by 2050: a goal to eliminate all carbon emissions by 2050 by transitioning entirely to renewables.
In addition to the Environmental aspect of ESG, Mussi contended that the Social and Governance policies enacted by the monopoly utilities would impact the affordability and reliability of their services. Specifically, Mussi expressed concerns with the unforetold consequences of utilities’ deprioritization of merit and cost in decision-making and prioritization of diversity, equity, and inclusion (DEI) in contracts, corporate structure, board leadership, and hiring.
“Just as corporations have a fiduciary duty to their investors and stakeholders, so too do utilities have a duty to ratepayers to provide cost effective and reliable energy. That is the lens through which RFPs should be evaluated, not ideological commitments such as DEI,” stated Mussi. “[T]his potentially unconstitutional discrimination in the workforce could subject them to litigation, the costs for which utilities will try to recover from ratepayers in subsequent rate cases.”
With no response given to the first letter, AFEC issued a follow-up letter earlier this month. Mussi reiterated that utility resource portfolios based primarily on ESG goals rather than affordability and reliability triggered ACC’s regulatory authority. Mussi claimed that ESG bans wouldn’t impair utilities’ ability to obtain investments, arguing that lenders prefer the reliability of grids based on gas and oil rather than renewables. He cited famed venture capitalist Kevin O’Leary, best known for his role on the “Shark Tank” reality show.
“The Commission should not allow foreign banks and investors to hold Arizona’s ratepayers hostage, undermining our energy independence which threatens our state’s security,” said Mussi. “[W]ell-known investors are willing to spend $14 billion to open a new oil refinery, despite the growing ‘green’ political agenda […] because ultimately it makes good policy sense and it makes good financial sense.”
Former commissioner Olson’s letter echoed those sentiments, and noted that the ACC had set a regulatory precedent by prohibiting COVID-19 vaccine mandates for utility employees.
“The Commission’s constitutional obligation is to protect ratepayers by ensuring just and reasonable rates, but the adoption of ESG is incompatible with this requirement,” said Olson. “If the Commission does not proactively prohibit the utilities from pursuing these initiatives, utilities will continue to come back to recover the costs associated with them. It will impact resource planning, every future rate case, and the reliability of our power grid.”
Yet, in the ACC response letter issued Tuesday, Commissioner Nick Myers said that the ACC couldn’t regulate the internal affairs of parent companies from which the public service corporations receive their ESG goals and initiatives. Myers agreed that clean energy mandates resulting in higher rates and unreliability of services were problematic.
“Generally, the Commission has the authority to control rates but not the authority to control the utility itself, particularly its internal affairs,” said Myers. “This is especially the case when regulated utilities implement goals and initiatives handed down from parent companies, which are not public service corporations and which the Commission does not regulate. That being said, I agree that clean energy mandates or self-imposed clean energy goals that unreasonably drive up rates for customers or jeopardize reliability are problematic.”
Myers noted in his letter that the ACC could only address ESG policy impact on rates and reliability through the Integrated Resource Plan (IRP) process. The IRP process allows parties to intervene and introduce evidence proposing the implementation or discontinuation of utility programs, especially those impacting rates and reliability. Myers encouraged AFEC to intervene in future rate cases by engaging in the IRP process.
“The IRP process and rate cases are therefore the best venues to address utility goals and initiatives that may be driving up costs for ratepayers and jeopardizing safe and reliable service,” said Myers.
Myers declined to address the social and governance issues presented by AFEC, declaring that these were outside of ACC purview.
AFEC President Scott Mussi replied to Myers in a response letter on Thursday. He noted that AFEC has been involved in the IRP process, which he contended was “controlled by the utilities” and lacking the ability to counter ESG impact.
“[U]nless ESG is prohibited by the Commission upstream, every downstream policy and ratemaking decision at the Commission will be shaped by it,” said Mussi. “The failure with [Myers’] approach is that it guarantees that all future resource plans will be ESG resource plans and all future rate hikes will be ESG rate hikes.”
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
