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.
Is the much-hyped “energy transition” starting to crumble at its foundations now? In recent weeks we have seen the following:
Ford Motor Company warns investors its electric vehicle division will lose $4.5 billion in 2023;
Reports that China has commissioned another 50 GW of new coal-fired electricity generation capacity;
The British government led by Prime Minister Rishi Sunak beginning to back away from absurdly aggressive transition timelines amid public outcry over rising energy bills and other deprivations;
The German government continuing to reactivate mothballed coal plants and facilitating new mining for coal;
The Scottish government forced to admit it has facilitated the felling of 16 million trees in this century to make way for new wind farms;
The Japanese government moving to reinvigorate its own coal-fired power sector;
Global demand for crude oil rapidly growing and outpacing supply growth, surprising all the supposed experts;
The U.S. Department of Energy forced to admit its initial estimate of consumer “savings” from converting from gas stoves to more expensive electric models was grossly overstated.
This list could go on and on, but the macro view is clear: Everywhere one looks, the aggressive timelines and heavily subsidized plans for a rapid transition are falling apart. Nowhere is the dynamic becoming clearer than in the wind industry.
In an Aug. 7 report titled “Wind Industry in Crisis as Problems Mount,” the Wall Street Journal catalogues $30 billion in planned investments in new wind projects in the U.S. and elsewhere that have now been delayed due to an expanding variety of factors. “After months of warnings about rising prices and logistical hiccups, developers and would-be buyers of wind power are scrapping contracts, putting off projects and postponing investment decisions,” the story says, emphasizing that the problems are becoming especially severe in the offshore wind business that has been so heavily promoted by the Biden administration.
I wrote a story in July detailing the fact that some of the so-called “Big Oil” companies have recently made big inroads into the offshore wind business, winning bids in the U.S. and Germany for licenses to develop large projects. But the Journal’s story quotes Anders Opedal, CEO of Norwegian oil giant Equinor, saying, “At the moment, we are seeing the industry’s first crisis.”
Along with British oil major BP, Equinor has plans in place to develop three wind farms off the Atlantic coast of New York, but recently warned state officials they would need to renegotiate power prices or the projects would not be able to obtain the needed financing. This demand by the two oil companies echoed a call by traditional wind developer Orsted in June for more subsidies from the U.K. government if its planned projects in the North Sea are to remain viable.
Make no mistake about it: Developing these offshore wind projects doesn’t come cheap. Orsted pulled out of a competitive bidding auction in Germany last month for government licenses to develop 7 GW of new offshore wind capacity when BP and French oil major TotalEnergies ran the final bids up to almost $14 billion.
“Orsted very deliberately chose not to pay record high concession prices for new offshore projects in Germany,” Orsted CEO Mads Nipper said in a post on LinkedIn. Orsted objected to the process that awarded the licenses based on the willingness of developers to pay the government for the right to develop — the same process used in oil and gas leasing all over the world — rather than the government offering more and more subsidies to incentivize development.
Therein lies the central conundrum for this subsidized transition: At some point, wind, like solar, electric vehicles and all the other rent-seeking solutions being promoted in this energy transition will have to become viable without an expectation of permanently rising subsidies, since governments already seeing their credit ratings downgraded due to overwhelming debt won’t be able to just keep printing money forever.
But, at the present moment, the business models in play do not appear to be headed for that outcome. And that’s why this energy transition seems to be falling off the rails.
David Blackmon is a contributor to The Daily Caller News Foundation, an energy writer, and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
The largest wind energy project in the Western Hemisphere is one step closer to generating electricity for 3 million Americans after Pattern Energy received the final approval it needs from Arizona officials for a transmission line that will carry electricity from the New Mexico wind project to Arizona.
The Arizona Corporation Commission (ACC) recently gave its unanimous approval to the Certificate of Environmental Compatibility application for Pattern Energy’s 550-mile SunZia Transmission project. The transmission line will be the conduit for Pattern Energy’s own 3,500MW SunZia Wind facility being constructed across three central New Mexico counties.
The ACC certificate represents the completion of the Arizona permitting process for the ±525 kV high-voltage direct current (HVDC) transmission line that will enter Arizona from the east, running along the southern end of Graham and Greenlee counties before veering southwest through northern Cochise County.
The line will then head northwest through the far northeast corner of Pima County before heading on to Pinal County where the project ends. There are plans for a third party transmission line to then carry the electricity to the Palo Verde Hub.
Pattern Energy continues to work with the Bureau of Land Management (BLM) as well as local jurisdictions and stakeholders to finalize the remaining approvals needed to allow construction on the projects to begin on schedule in mid-2023. A Record of Decision from BLM is anticipated in April 2023, the key approval required prior to construction.
Those approvals will bring badly needed temporary and permanent jobs to Arizona, particularly in Cochise County and Pinal County. There will also be associated revenues such as for materials, equipment, fuel, and temporary housing.
“This project is of great economic benefit with more than 2,000 construction jobs and up to 150 permanent jobs, which for our rural communities is a lifeline,” said Mignonne Hollis, Executive Director of the Cochise County-based Arizona Regional Economic Development Foundation. “It’s vital for our county, which continues to see a decline in population, to have stable jobs come into our region.”
The SunZia wind and transmission project was first proposed in 2006 and received its first granted accepted rating from the Western Electricity Coordinating Council in 2011. Its first of many federal approvals came in 2015.
Since then, dozens of environmental and sustainability reviews have been conducted for the joint project, which will have a footprint in 13 counties between the two states.
Company officials say the combined SunZia Wind project and Transmission project comprise the largest renewable energy infrastructure project in U.S. history with a total privately-funded investment of more than $8 billion.
“The unanimous decision by the ACC to grant a Certificate of Environmental Compatibility for the SunZia Transmission line represents a major milestone towards the completion of this project,” said Mike Garland, CEO of Pattern Energy which owns the SunZia project. “Once complete these projects will combine to increase the reliability of the western grid, create good jobs, and bring millions of dollars in economic benefits to Arizona and New Mexico.”
The operational portfolio of California-based Pattern Energy includes 35 renewable energy facilities that use proven, best-in-class technology with an operating capacity of nearly 6,000 MW in the United States, Canada, Japan, and Mexico.
Terri Jo Neff is a reporter for AZ Free News. Follow her latest on Twitter, or send her news tips here.
