by Daniel Stefanski | Apr 22, 2023 | News
By Daniel Stefanski |
Tucson voters will be receiving their ballots in the coming days for an upcoming special election, and the single proposition for their consideration is drawing passionate arguments from both supporters and opponents.
Proposition 412 would grant “a franchise to Tucson Electric Power (TEP) Company for the purpose of providing electric transmission and distribution services within the City of Tucson for which the City of Tucson will receive a franchise fee and other consideration.” The “other consideration” comes, in part, in the form of a “Community Resilience Fee” that will fund Tucson’s Climate Action and Adaption Plan, which is an effort to achieve “carbon neutrality for City operations by 2030.” If Tucson voters were to approve the proposition, the agreement would continue until June 1, 2048. (The current agreement ends April 2026.)
Tucson’s Democrat Mayor, Regina Romero, has endorsed Proposition 412, stating, “Please join me in voting YES on Prop 412. Tucson Electric Power is a valued partner in our community’s efforts to fight climate change, and Prop 412 will provide critical support for the City of Tucson’s Climate Action and Adaptation Plan. Prop 412 extends TEP’s service agreement for another 25 years with citizen oversight and opportunities to revise. Cleaner, greener and more resilient power for Tucson is important to all of us. Prop 412 is a smart investment in creating resiliency for Tucson.”
Joining Mayor Romero in support of Proposition 412 are Senator Rosanna Gabaldón and Representatives Andres Cano, Stephanie Stahl Hamilton, Consuelo Hernandez, and Chris Mathis – among others.
One of the main issues causing contention over this proposal is the insertion of a community resilience fee of 0.75% of all applicable revenues of TEP – in addition to the 2.25% Franchise Fee. This new fee would be collected and disbursed for “funding costs associated with the underground installation of new TEP Facilities or conversion to underground of existing TEP facilities currently installed overhead; and projects that support the City’s implementation of the City’s approved Climate Action and Adaption Plan.” Surprisingly, the fee has picked up opposition from both sides of the political aisle.
Steve Kozachik, a Democrat Tucson Councilman, recently wrote an opinion piece for the Arizona Daily Star, arguing that “we can do better than Prop 412.” He states that “TEP is not coming out of pocket with a single penny to support renewables in Prop 412. You are, in the form of a 0.75% resiliency fee. Let’s be clear. They’re collecting those new dollars from customers, not dipping into their own revenues in support of investing more heavily in climate mitigation and decarbonizing efforts.”
Councilman Kozachik argued that “for the first 10 years the new fee is being collected, 90% of it is earmarked for undergrounding utilities….And yet our climate reality demands much more than the aesthetic of undergrounding new utility lines. A financial commitment from TEP to partner in that larger renewable energy conversation is what’s lacking in the extension of their franchise agreement.” Kozachik suggested that it may not be such a bad thing for this extension to fall short of voter approval in the upcoming election as “it can be placed back on the ballot in either August or November.” He writes that “either date would give the city and the community time to meet and identify ways the utility can demonstrate a larger commitment to addressing extreme heat and how we safely provide electricity using renewable energy sources.”
On the other end of the political spectrum, the Pima County Republican Party urged voters to reject Proposition 412, stating, “There will be a special election May 16, 2023, where the voters will decide if they want to raise their Tucson Electric Power rates to remove some poles and somehow reduce climate change by throwing money at Tucson’s Climate Action Plan.”
Kevin Thompson, a Republican member of the Arizona Corporation Commission, weighed in on the community resilience fee, telling AZ Free News: “Franchise Fees are a routine component of a utility providing service to a municipality, but what isn’t typical is the coupling of a taxpayer supported slush fund to prop up pet projects for the city in the name of fighting climate change.”
The community resilience charge isn’t the only fee that TEP is attempting to pass along to its Southern Arizona consumers. Earlier last year, TEP submitted an application to the Arizona Corporation Commission (ACC), proposing a rate increase of 11.8% to take effect no later than September 1, 2023. TEP informed the Commission that “the new rates are intended to result in an increase in retail revenues of approximately $136 million.” According to reports, TEP customers’ bills would increase more than $14 each month should the ACC sign off on the request.
The rate increase before the ACC has earned fierce opposition from the Sierra Club, which recently took a position against TEP’s attempted action. In a March 29th release, the Sierra Club warned “the rate hike would be catastrophic for low-income families who are already hard struck by inflation, and would hurt disadvantaged and frontline communities that often bear a disproportionate air pollution burden.”
Commissioner Thompson is closely watching as both the Special Election and ACC”s decision play out before him. When asked by AZ Free News for his thoughts on these unfolding issues affecting southern Arizona, he said, “Utilities should be approaching state regulators, not courting local governments, when promoting initiatives that may have an impact on the overall reliability and integrity of our power grid.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Corinne Murdock | Jan 26, 2022 | Education, News
By Corinne Murdock |
The Arizona Corporation Commission (ACC) struck down rule changes advancing renewable energy usage that would’ve increased the cost to taxpayers. The energy mandates would have required energy utilities to rely more on renewable energies following a certain timeline, which would have increased the revenue requirements of Arizona Public Service Company (APS) by nearly $4 billion and Tucson Electric Power (TEP) by nearly $1.13 billion — costs which taxpayers would’ve borne, as high as 43 to 58 percent more monthly.
These were energy mandates similar to those rejected by voters in the failed Proposition 127 of 2018, which would have required electric utility companies to acquire a certain percentage of their electricity from renewable resources each year, from 12 percent in 2020 to 50 percent in 2030. About 68 percent of voters rejected Proposition 127.
Chairwoman Lea Márquez Peterson joined commissioners Jim O’Connor and Justin Olson in their “no” votes against the rule changes. Commissioners Anna Tovar and Sandra Kennedy voted for the rules.
https://www.facebook.com/CorpCommAZ/videos/461238372124019/
APS, TEP, and the Grand Canyon State Electric Cooperative Association (GCSECA) all expressed support for the rule changes.
O’Connor said that the utilities are “serious and sincere” with their clean energy efforts. He said that the utilities don’t need rules from the state, especially since they will pose risks to ratepayers.
“The proposed energy rules represent a multi-year, good-faith effort by a great many. During this long process and after years of opposition, our state’s major electric utilities have embraced clean energy and our proposed rules. I was surprised and I made it the focus of my efforts to understand that turnaround,” said O’Connor. “I have concluded its best for the utilities to remain in charge of their resource plans just as they have in the past and it is better for the commission to continue to rely on its prudent standard for holding utilities accountable for the resource decisions and their costs.”
Tovar said the commissioners should be ashamed that they wasted years of staff and commission work from “getting in the way of what is right.” Tovar called out two of the commissioners, O’Connor and Peterson, for “flip-flopping” on their stance concerning the rules. She lamented that commissioners weren’t willing to compromise, like she claimed she had, for the greater good: economic growth, health, and environmentalism through these rule changes. Tovar added that the rule changes had diverse, bipartisan support statewide.
“What this tells me is that these rules are failing because of politics. And basing our votes on politics is a dangerous game, and it is a dangerous game to play with something so important to Airzona’s future. Ensuring clean energy in Arizona is our future, and it’s one of the top priorities I had even before running for this commission. When I took office, I wanted to change the rules. Make them more aggressive. Get us to a clean future, sooner. But I looked at the fads and I knew there was much work to be done on them,” said Tovar. “Let me be clear: this isn’t the Green New Deal. This is Arizona’s clean energy package and [I am] very proud of the work that has been accomplished thus far.”
Olson expressed confidence that renewable energy was still attainable without costing customers more. He also mentioned how he attempted to compromise by introducing amendments that would help reduce the cost to taxpayers with passage of the energy rules. Olson indicated that Tovar’s characterization of commissioners switching votes was unfair because their change reflected new information that came to light.
“We as a commission should have a very clear policy that tells our utilities that they should invest in the technologies that are the most cost-effective method of meeting the energy demands of our customers. And what we have before us in these energy rules is not that,” said Olson. “That is the appropriate demand. That is what the constitution requires of us to expect of our utilities, and that is what we should continue to pursue. That does not prohibit us and our utilities from increasing the amount of renewable energy resources that our utilities use to provide the energy for their customers. In fact, it creates a win-win scenario where our utilities will be investing in the renewable energy projects that are the most cost-effective. We can benefit rate bearers and adopt these technologies at the same time. That’s the approach we should take.”
Kennedy said that clean energy was cost-effective with modern technology. She asserted that it wasn’t possible to determine future outcomes based on present actions.
Márquez Peterson said she supported clean energy by 2050, but an equal priority for her was affordability for consumers. Márquez Peterson expressed confidence that utilities had turned a corner and were willing to adopt clean energy of their own volition.
“It took years to get actual cost data that consumers have been asking for,” said Márquez Peterson. “I believe utilities should be justly and reasonably rewarded when they make prudent and proactive investments in the next generation of clean and renewable energy resources, so long as they don’t jeopardize the safety and reliability of the grid or the affordability of rates.”
In a statement to AZ Free News, Justin Olson asserted that the commission’s vote respected the will of voters.
“First of all this is a tremendous victory for ratepayers. I fought to enact policies to make rates as affordable as possible. Many times I was a lone voice crying at the wilderness — I was the only vote against these mandates,” said Olson. “This was the commission telling the utilities that they must invest in technologies that are the most cost-effective method of generating energy.”
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
