Katie Hobbs’ “Energy Promise” to Arizona Ratepayers: Higher Costs, More Subsidies
Last year, Katie Hobbs, by executive order, established a “task force” headed by her Office of “Sustainability” to develop a report on energy affordability and reliability. This month, her task force submitted their plan which would do the opposite of that: make energy more expensive and less reliable. This shouldn’t come as a surprise considering the “task force” called by Hobbs is made up of solar special interests, environmental activists, her own agencies, and utilities that have all committed to going Net Zero anyway.
Instead of reading 81 pages that brings nothing new to the table, the only questions that need to be asked (and answered) about the report are below.
Does it call for new natural gas generation? Not really.
Does it call on utilities to keep our coal plants open? No, they want to shut them down and “repower” them to “clean” energy.
Does it pave the way for new nuclear? Not until the mid-2040s, at the earliest.
What, then, does it advocate doing? Subsize special interests by blanketing state trust land and government buildings with even more solar, wind, and battery storage. The very thing causing utility rates to increase and leading to blackouts.
Ironically, they recognize that the vast majority of new generation being built in the state right now – 82% of it according to the report – is already coming from solar, wind, and battery storage, while conveniently ignoring that at the same time both of the largest investor owned, monopoly utilities – APS and TEP – are currently seeking double digit rate hikes. And these rate hikes aren’t the first. Since Hobbs has taken office, the cost of electricity for residential ratepayers has gone from 12.63 cents per KWh to 16.03 cents. For someone using 1,000KWhs a month, that’s a $34 per month increase, or 27%. Under her plan, that will go far higher.
Blame Trump
Instead of acknowledging this, the report blames President Trump, who has been working to unleash energy across the country, for slashing the trillions in subsidies for solar, wind, and battery storage from the so-called “Inflation Reduction Act” from the Biden Administration. They also blame Secretary Burgum for protecting federal lands from being carpeted with unreliable solar and wind farms. But electricity rates were increasing before Trump took office and Burgum was named Secretary of the Interior, precisely because of what they halted. We have more paper capacity than ever before, but costs are skyrocketing and reliability is declining because most of the new generation is coming from intermittent solar and wind.
It should surprise no one, that even with taxpayer subsidies, the more solar, wind, and battery storage a utility puts on their grid, the higher costs are for ratepayers.
Replace Coal with Solar and Battery Storage
Instead of keeping our remaining coal plants online, as President Trump has called for, the report argues we should instead “repower” them with solar plus battery storage. Not only is it foolish on its face to replace a reliable source of energy with an intermittent source, it costs a lot more too. TEP even admitted so. In deciding to convert one of their existing coal plants to natural gas at a cost of $170 million, they argued that converting it to solar and battery storage would cost 27 times that, or $4.5 Billion.
Competition? Only if Monopoly Utilities Benefit
The only “solution” identified in the report that could actually help bring more capacity on the grid and shield ratepayers from increased costs from the massive energy demands of new large load customers, like data centers, is a “BYOC” or Bring Your Own Capacity approach where these customers self-generate their own power. But even here, the report doesn’t call for opening up the state for data centers to easily build their own power plants. No, for Hobbs it must be done in a way that benefits monopoly utilities. And, it must come with “sustainability” mandates on those data centers, which would cause prices to soar even higher. We ran a bill to streamline the process for data centers to bring their own power, likely to be natural gas, but the very utilities Hobbs is deferential to killed that bill at every step of the process.
The Hobbs Energy Promise? Higher Costs, Subsidized by Taxpayers
This is really just a political report, and if its recommendations were implemented, it would actually only increase the cost of electricity for Arizonans. We have seen the result of spamming the grid with renewables. 20 years after Kris Mayes spearheaded the effort to mandate 15% renewable energy, Arizonans have paid more than $3 billion for it. The Corporation Commission itself found that a renewable mandate would cost ratepayers $6 Billion. Our analysis of APS’ resource plan to go 100% renewable by 2050 found that it would cost ratepayers at least $42.7 billion through 2038, raising residential ratepayers’ bills by $100 a month.
So, what is Hobbs’ actual plan to lower the cost of electricity for Arizonans? Her budget proposal this year included a tax hike to pay for a fund that would subsidize the utility bills of a few ratepayers across the state. In other words, she has done nothing in her 4 years as Governor to actually lower the costs of electricity and seemingly has no problem with our utilities getting their double-digit rate hikes. Instead, she wants to use taxpayer dollars to subsidize those rate hikes. Under her plan, utilities get their rate hikes, and ratepayers pay doubly for it – in higher rates and taxes.
The Real Energy Promise that Delivers Affordability and Reliability to Customers
The path for lower utility bills is not complicated. Stop shutting down coal. Meet new demand with more natural gas. Allow data centers to build their own power, on their own dime. Pave the way for more nuclear power within the next decade. Stop wasting money on unreliable solar, wind, and battery storage. If Hobbs was interested in delivering affordability and reliability to Arizona ratepayers, this is what a real Energy Promise would actually look like.
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