Energy executives overseeing Arizona’s utility companies stand to gain financially for adherence to Environmental, Social, and Governance (ESG) criteria — namely, whether they stay on track to eliminate carbon emissions by 2050.
According to Arizona Public Service’s (APS) holding company Pinnacle West (PNW) Securities and Exchange Commission (SEC) report last year, they link 20 percent of compensation based on Clean Energy Commitment performance — specifically, the total number of “clean megawatts installed” over a period of three years.
Altogether, PNW’s seven executives made about $21.5 million last year.
PNW’s Clean Energy Commitment is to achieve a resource mix of 65 percent clean energy (45 percent of that coming from renewable energy) by 2030, end APS coal-fired generation by 2031, and ultimately transition completely to carbon-free electricity and eradicate all carbon emissions by 2050.
PNW’s progress on its Clean Energy Commitment has earned it a top-100 ranking with Energy Intelligence since 2019. In 2005, the company had achieved 24 percent clean energy; since 2019, they have maintained 50 percent clean energy. The company projects that they will reach 65 percent clean energy by 2030.
As part of their commitment, APS plans to add at least 2,500 megawatts of clean energy technologies such as solar and storage by 2025. In their 2022 SEC report, PNW projected the addition of 210 megawatts of utility-scale solar energy, 238 megawatts of wind energy, and 341 megawatts of energy storage. They also reported that APS had 2,400 megawatts of renewable capacity at present and over one million solar panels across their 10 grid-scale solar plants.
PNW reports that APS has been integrating ESG practices for nearly 30 years, but have undertaken extra steps in recent years to prioritize it. Their entire board “dedicates a significant amount of time to ESG matters,” and the company formed a Sustainability department to integrate ESG into everyday APS work and an ESG Executive Council to guide the company’s ESG pathway. That latter entity, the council, measures and reports on Clean Energy Commitment actions.
The company also tasked multiple committees to advance ESG: “Environmental” is handled by the Nuclear and Operating Committee, “Social” is handled by both Corporate Governance and Public Responsibility as well as Human Resources Committees, and “Governance” is handled by the Corporate Governance and Public Responsibility Committee.
The Corporate Governance and Public Responsibility Committee also reviews ESG trends that may impact the company. Earlier this year, PNW amended the committee’s charter to include oversight of climate change-related issues and strategies for response.
As for the Tucson Electric Power (TEP) and UNS Energy Corporation (UNS), their owner, Fortis, offers an ESG-related financial incentive of 10 percent for its executives. Fortis executives made over $4.5 million last year.
The ESG incentive is part of Fortis’ “sustainability and people performance,” factored for the first time last year. It carries a 40 percent performance pay incentive; in addition to ESG leadership, it includes the weighting factors of safety (10 percent); diversity, equity, and inclusion (DEI) (10 percent); and reliability (10 percent).
This year, Fortis raised the ESG incentive to 15 percent, and added climate and emissions priorities as well as a DEI objective.
Similar to PNW, Fortis has a 2050 net-zero carbon emissions goal, which includes a 50 percent reduction in greenhouse gas emissions by 2030 and a 75 percent reduction by 2035. They established a Governance and Sustainability Committee to oversee their emissions reduction goals.
Fortis has planned additions of 3,500 megawatts of wind, solar, and storage energy expansions through 2035. In doing so, Fortis projected by 2032 that TEP will achieve a coal-free generation mix and eliminate the use of surface water-generated power and groundwater use by 70 percent. Additionally, TEP is scheduled to have more than 40 percent of its power derived from wind, solar, and battery storage by 2030, and then over 60 percent by 2033.
Last year, Fortis amended its $1.3 billion revolving credit facility to become a sustainability-linked loan; meaning, its pricing adjustments are now linked to goals related to carbon emissions and board diversity.
Both APS and TEP are part of the California Independent System Operator (ISO) Western Energy Imbalance Market (WEIM), established in 2014. The WEIM allows participants to buy and sell renewable energy power based on need, and offers visibility of neighboring grids. If one utility has excess hydroelectric, solar, or wind power, the ISO will deliver that energy where needed elsewhere.
APS entered the WEIM in 2016, and TEP entered in 2022. Also members are the Salt River Project (SRP), joined in 2020, and the Western Area Power Administration (WAPA) Desert Southwest Region, joined in 2023.
As reported earlier this month, the world’s largest globalist investors are now backing the ESG push across Arizona’s utility companies.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
Two of the largest private equity firms in the U.S. and the world, Vista Equity Partners and Blackstone, respectively, are now backing the adoption of Environmental, Social, and Governance (ESG) measures in Arizona’s utility companies.
The two globalist ESG-focused companies acquired Energy Exemplar on Halloween. Energy Exemplar owns Aurora Software Consulting Services, used by Arizona’s utilities to provide all modeling and analysis for the resource plans submitted to Arizona Corporation Commission (ACC).
The resource plans submitted by Arizona Public Services (APS), Tucson Electric Power (TEP), and UniSource Energy Services (UNS) Electric largely align with the energy transition directives set forth by Net Zero by 2050.
“Consistent with these overall trends in the energy market. APS has committed to being 100% clean and carbon free by 2050,” stated the APS resource plan.
“[Our resource plan] outlines the sources we anticipate using to satisfy customers’ need for reliable, affordable energy over the next 15 years while working toward a new, long-term objective of net zero direct greenhouse gas emissions by 2050,” stated TEP.
“[Our company has a] long-term transition to zero carbon emissions by 2050,” stated UNS Electric.
The International Energy Agency (IEA) — of which the U.S. is a member — came up with Net Zero by 2050, the roadmap to globalize the energy sector by total decarbonization, or achieving net zero carbon emissions, by 2050. Blackstone and Vista Equity Partners are among the biggest financial backers of the effort.
Specifically, Net Zero by 2050 aims to eliminate all emissions-producing energy sources (namely fossil fuels) by replacing them with less reliable renewable energy sources like solar and wind, bioenergies like biomethane, or hydrogen and hydrogen-based fuels; instituting greater energy efficiency measures, such as reducing appliance energy consumption and reducing heating and cooling temperature consumption; and electrifying all fossil fuels-based products, such as cars, buses, trucks, heat pumps, and furnaces for steel production.
The campaign also aims to institute behavioral changes among the world’s populace, such as replacing driving with walking, cycling, or public transit, and in some cases foregoing flights entirely.
By 2030, the campaign proposes to introduce eco-driving and motorway speed limits of 60 miles an hour, phasing out gas cars in large cities (dubbed “ICE” cars, which stands for “internal combustion engine”), reducing “excessive” hot water temperatures, reducing the average weight of a passenger car by 10 percent, limiting the average space heating temperature to about 68 degrees and average space cooling temperature to 77 degrees.
By 2050, the campaign proposes to replace regional flights with high-speed rail, preventing business and long-haul leisure air travel from exceeding 2019 levels, improving fertilizer use efficiency by 10 percent, and reducing the use of “energy-intensive” materials per unit floor area by 30 percent.
The Biden administration is fully on board with Net Zero by 2050; the State Department issued its own roadmap on the matter in November 2021.
Blackstone, which manages about $1 trillion in assets, has committed to supporting the globalist goal of net zero by 2050. Per its 2022 climate-related financial disclosures report last year, the company estimated that it would take $115 trillion to reach net zero by 2050. The company invested about $100 billion toward that goal last year, and launched a dedicated credit platform for their ESG goals.
In 2021, Vista Equity Partners was among the first American private equity firms to join the Net Zero Asset Managers (NZAM) initiative. They pledged to reduce their $100 billion in portfolio companies’ emissions by 50 percent by 2030 and emit net zero greenhouse gas emission across their portfolio by 2050.
NZAM, launched in December 2020, is a formal partner of the United Nations Framework Convention on Climate Change’s Race to Zero Campaign. NZAM is regarded as the world’s largest climate finance alliance, with over 300 companies maintaining about $64 trillion in assets as of September. Blackstone is not part of NZAM.
As reported last month, ACC responded to controversy over utilities’ implementation of ESG policies with the claim that it lacked the authority to ban them from doing so.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
Radical Leftists and solar panel companies are freaking out over the upcoming Arizona Corporation Commission meeting on Wednesday, October 11 at 10:00am! But, based on the available public comments, they are the only ones who have contacted the Corporation Commission to express their desired actions regarding what’s on the agenda.
Currently, Arizona regulations force utility companies in the state to buy the extra solar power each solar customer puts into the grid. The Arizona Corporation Commission sets the rates that utility companies pay those customers.
On Wednesday, the Corporation Commission could vote to change the amount utility companies pay to match the break-even cost of the companies. This would reduce the vast majority of Arizonans’ energy bills.
In 2007, the Corporation Commission implemented a policy that required utility companies to pay retail price of solar power to their customers who put solar power back into the grid.
Those customers are still getting that rate today, even though the price of solar power has decreased tremendously over time. The customers are locked into that amazing deal for 20 years from the date of installation.
The 2007 policy ended in 2016 when the Corporation Commission decided utility companies should pay wholesale pricing to customers. However, there was a “great negotiation” between those who wanted the policy to remain in place—the Radical Left & solar power companies—and the Corporation Commission. The new policy implemented allowed for a maximum of only a 10% reduction in the price utility companies pay these customers every year. Since 2016, customers are locked into the rate they are paid for 10 years from the date of installation. Oh, and yes, those customers who installed solar panels between 2007-2016 are still locked in to get paid retail pricing for 20 years from the date of installation.
Because the maximum reduction of the rate utility companies pay to solar power customers who give to the grid is only 10% per year, there is still a huge discrepancy between the true wholesale solar power price and the rate utility companies are forced to pay these customers.
APS calculates their “Avoided Cost” at almost $0.05. This means APS would nearly break even on paying five cents per kWh to solar panel customers giving power to the grid. However, APS is forced to pay nearly $0.09 per kWh. For ten years, APS has to pay this rate to every solar panel customer who gives power to the grid, even though solar power is more than likely going to continue to fall.
The Arizona Corporation Commission sets the maximum profit rate of utility companies. APS’ is set at 8.7%. Being forced to pay customers more for their energy than the break-even cost causes utility companies to charge customers who do not have solar and are not giving to the grid a higher price for energy to meet profits.
If APS is allowed to truly match wholesale pricing for all solar panel customers giving to the grid and pay each one of them just under five cents per kWh, APS would be forced to cut the cost of energy for all of their customers, use the extra funds left over to reinvest, and/or expand its energy providing capabilities.
That’s why, if you really believe in clean energy or just want cheaper utility bills, it’s important to make your voice heard by speaking up, giving public comments, or submitting written public comments.
Right now, the only folks who have been doing so are those who own solar panels and don’t want their pay to decrease or solar panel companies who may face tougher economic hardship. But all customers deserve a say in our state’s energy prices both now—and in the future.
Jeff Caldwell currently helps with operations at EZAZ.org. He is also a Precinct Captain, State Committeeman, and Precinct Committeeman in Legislative District 2. Jeff is a huge baseball fan who enjoys camping and exploring new, tasty restaurants! You can follow him on X here.
