by Dr. Thomas Patterson | Oct 27, 2023 | Opinion
By Dr. Thomas Patterson |
Arizona State University President Michael Crow believes we are in such danger that we should amend the U.S. Constitution to empower the government to deal more expansively with climate change. Dr. Crow’s view that constitutional protections of our liberties should be eliminated when they become inconvenient wouldn’t square with the founders’, but his estimate of the dangers and required remedies for our changing climate are quite mainstream.
“Net-zero by 2050” has become an article of faith among our corporate and academic elites, no longer requiring proof or intellectual defense. The notion that we must eliminate all carbon emissions by mid-century if we want to save the planet is the organizing principle for environmental, social, and corporate governance (ESG) investing. In 2022, it was mentioned more than 6,000 times in filings with the Securities and Exchange Commission (SEC).
The SEC has helpfully proposed climate disclosure rules to help investors “evaluate the progress in meeting net-zero emissions and assessing any associated risk.” Skeptics are sidelined as “climate deniers.”
But mounting scientific evidence suggests that net-zero is wildly impractical and probably not even achievable. In September, the Electric Power Research Institute, the research arm of the U.S. electric power industry (which would seem to be naturally inclined to support proposals which increase reliance on electricity), released a sober report on the practicality of net-zero.
Their study concluded that “clean electricity plus direct electrification and efficiency…are not sufficient by themselves to achieve net-zero economy-wide emissions.” Translation: it can’t be done. No amount of wind turbines, solar panels, battery power, fossil fuel, or other available technologies will achieve net-zero by 2050.
Furthermore, even “deep carbonization”– drastic reductions in atmospheric carbon levels – is an impossible dream. With natural gas and nuclear generation forced to the sidelines, that would require options like carbon removal technologies, which would cost a quadrillion (million billion) dollars, which would…well, you get the picture.
Finally, the report concludes that living in a net-zero world may not be all that great. Supply chains operating only on electricity and the reliability and resiliency of a net-zero electricity grid could be highly problematic.
The response to this nonpartisan and obviously consequential report was silence. There has been essentially no media coverage. No climate activists rushed to dispute the methodology nor challenge the conclusions.
This is a significant tell. You could assume if the eco-activists were genuinely concerned about our climate future, they would have some interest in responding to this major challenge to their assumptions. But they ignored it to cling to their groupthink.
Yet other indications that the transition to renewable fuels is already off the tracks keep coming. The government-certified North American Electric Reliability Corp recently issued its 2022 Long-Term Reliability Assessment. NERC concluded that fossil fuel plants were being removed from the grid too quickly to meet electricity demand, putting us at risk for energy shortages and even blackouts during extreme weather.
But wait, there’s more. PJM Interconnection, a large grid operator in the Northeast, recently released projections indicating it will soon lose 40,000 MW, 21% of its generation capacity. The looming plant closures are mostly “policy driven” by onerous EPA regulations and mandatory ESG commitments.
Renewables, although lavishly subsidized to replace the lost electricity, consistently underperform and will be able to produce, at most, half of the electricity lost. Meanwhile the government is perversely mandating electric vehicles, appliances, and whatever.
Finally, the repeated assertions of settled science were unsettled by 1,609 scientists and professors worldwide signing a “No Climate Emergency” declaration. The document was issued by Climate Intelligence or Clintel, a nonpartisan self-funded, independent organization of scholars whose only agenda is “to generate knowledge and understanding of the causes and effects of climate change and climate policy.”
They point out that there is no basis for claiming an upcoming existential crisis. Carbon dioxide is not primarily a pollutant but a necessary basis for life. Moreover, there is no statistical evidence that global warming is intensifying natural disasters. Panic is dangerous, with the potential to plunge us into perpetual poverty.
They charge that climate science has degenerated into a discussion based on beliefs, not on “self-critical science.” Historians of the future, reflecting on our era of hyper-politicized science, will undoubtedly agree.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
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.
