The Corporation Commission’s Decision to Roll Back EV Subsidies Is a Big Win for Ratepayers

The Corporation Commission’s Decision to Roll Back EV Subsidies Is a Big Win for Ratepayers

If someone wants to own an electric vehicle (EV), it is perfectly within their right to do so. That’s what it means to have freedom. But EV owners should be the ones to bear the burden of any costs associated with the necessary infrastructure improvements. And they should absolutely be responsible for paying for any excessive demand placed on the grid.

But that’s not the way the left sees it.

As part of its Green New Deal dream, the left has been pushing an agenda that significantly increases the amount of EVs on the road despite slowing demand from consumers and companies like Ford losing billions on them just this year. And Arizona utilities have fallen right in line, planning for 1 million EVs by 2030 while APS alone plans to have a 100% “carbon free” vehicle fleet as part of its commitment to go “Net Zero” by 2050.

So, how exactly was APS planning to do this? According to the Transportation Electrification Plan it submitted to the Arizona Corporation Commission, APS wants to force all ratepayers—including non-EV owners—to subsidize the costs associated with such an absurd goal. In the plan itself, APS asked for a budget of $5 million for its “Take Charge AZ” initiative that funds new EV chargers for private businesses along with an additional $4 million in subsidies for EV owners on the backs of other ratepayers.

This is not only unreasonable, but it’s unjust.

EVs are already highly subsidized. A recent study from the Texas Public Policy Foundation (TPPF) conservatively estimates that EVs receive nearly $50,000 in subsidies over 10 years from direct tax credits from federal and state governments, avoided gas taxes, and regulatory mandates. This unfairly socializes the costs of the demand EVs place on the grid to all ratepayers. On top of that, TPPF estimates that the costs associated with upgrading the grid to serve the EV electricity demand add up to $11,883 per EV over 10 years! And once again, this cost is incurred by all ratepayers. The last thing EV owners should be getting is more ratepayer subsidies!

That’s why the Arizona Free Enterprise Club helped lead the charge to ask the Arizona Corporation Commission to oppose these unfair EV subsidies with around 340 comments submitted against APS’s plan. And Commissioners Kevin Thompson and Jim O’Connor heard us loud and clear. Thompson authored an amendment that rejected APS’s request to use up to $5 million in ratepayer funds to develop and install EV charging infrastructure as part of its “Take Charge AZ” program. And O’Connor amended the plan to ensure that any EV rebates offered by APS are done so at the expense of shareholders not ratepayers.

This is a big win for ratepayers, the overwhelming majority of whom do not own an EV or use EV charging stations and therefore shouldn’t be faced with such a financial burden. But while it is an important win, it once again highlights the need to rid ourselves of radical ESG commitments entirely. This program would have cost ratepayers $5 million, but their ESG Net Zero commitments would cost ratepayers $6 billion. Now, it’s time for the Corporation Commission to finish the job by putting an end to radical ESG plans for Arizona’s utilities once and for all.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

Join our FREE Grassroots Action List to stay up to date on the latest battles against big government and how YOU can help influence crucial bills at the Arizona State Legislature.

Corporation Commission Should Reject Utility-Proposed ESG Net Zero Resource Plans

Corporation Commission Should Reject Utility-Proposed ESG Net Zero Resource Plans

A History of Harmful Mandates

Arizonans have faced repeated attempts over the last six years by various interest groups to impose costly Green New Deal energy mandates on utility ratepayers. In 2018, liberal billionaire Tom Steyer bankrolled a statewide ballot measure to require utilities to obtain 50% of their energy from renewable sources by 2030. Voters realized the danger of this California-style energy plan and rejected it by a 2 to 1 margin.

Immediately after the Steyer initiative failed at the ballot, the Arizona Corporation Commission began considering their own green energy mandate to completely ban fossil fuel generation in Arizona by 2050. The Commission’s plan was even more radical than the energy initiative, and this time the mandate was being pushed by our regulated utilities, not far left radicals. This caught most observers by surprise—the utilities were among the opponents of the Steyer initiative, and now they were cheerleading energy mandates.

Why the change of heart by our monopoly utility providers? The reason is simple—they knew that if the Commission adopted official policy requiring Green New Deal mandates, they would be guaranteed full cost recovery from their captive ratepayers. After fierce opposition from ratepayers and organizations like the Free Enterprise Club, this proposed mandate was rejected by the Commission in early 2022.

Unfortunately, this victory for ratepayers was short lived. Almost immediately after the Commission voted to reject costly energy mandates, the utilities announced that they would be implementing their clean energy agenda anyway, irrespective of what their captive ratepayers thought about it. This didn’t come as a total surprise, considering these utilities have gone all-in on Environmental, Social, and Governance (ESG) and the accompanying “Net Zero” commitments to ban fossil fuels in their SEC filings to shareholders, which our organization began advocating against at the Commission earlier this year.

We told the Commission that if the utilities are allowed to operate under ESG, every downstream policy decision would be shaped by it—ultimately resulting in massive ESG rate hikes for Arizona ratepayers. Based on the energy resource plans submitted by the utilities last month, it appears our predictions have been proven correct.

ESG Resource Plans

Every three years, the major monopoly utilities (APS, TEP, and UNS) are required to submit an Integrated Resource Plan (resource plan) to the Commission. These resource plans must project the expected load (demand from customers) over the next fifteen years and then outline how the utility plans to meet it – whether that is with coal, nuclear, natural gas, solar, wind, or other sources.

Unsurprisingly, the submitted plans are ESG plans through and through with radical Net Zero commitments that completely retire coal generation, add very little new natural gas, and instead rely almost entirely on unreliable and costly solar, wind, and battery storage. In TEP’s submitted plan, they begin by outlining their commitment to going Net Zero by 2050 and outline a plan for a ratepayer-funded “Net Zero Hero” campaign to push Arizonans to use less energy. The APS plan is the same, because they both begin with the same primary goal: going “green.”

Renewable Mandates Cost Ratepayers Billions

One problem (among many) is that, if approved by the Commission, these plans will cost Arizona ratepayers billions. The Commission knows this. The 2006 15% renewable mandate has cost ratepayers over $1 billion to date and their own 2021 study estimated going Net Zero by 2050 would cost ratepayers $6 billion. The utilities know this too. In 2018, they submitted ballot arguments opposing Prop 127 arguing that going renewable would cost the average ratepayer $1,250 annually.

Even more recently, the Club published a paper authored by economist Stephen Moore, finding that ratepayers in states with “renewable” energy mandates (like the goals our utilities have voluntarily committed themselves to) paid 44% more for electricity last year than those who live in states without any mandates. Further, going “Net Zero” by 2050 would increase utility costs by 78% – nearly doubling utility bills for Arizonans.

It’s clear that climate commitments cost billions, and that’s why the federal government, on behalf of the green energy lobby, is pouring trillions of dollars in tax credits to subsidize it – on their own they cannot compete. Even with those subsidies, going “green” will increase costs of electricity and result in blackouts.

The Plans are Irredeemably Wedded to ESG

Why would the utilities choose this path? Simple: in order to maintain a good ESG score with international banks and investors who have no interest in the reliability of Arizona’s grid, they have to. In fact, even the modeling software they use to craft their plans is now owned by Blackstone and Vista Equity Partners, two of the largest private equity firms who are at the tip of the spear pushing ESG. Even worse, the parent companies of our utilities have tied executive compensation to meeting “renewable” energy goals. In other words, the profits of out of state executives substantially increase if the utilities go Net Zero.

These plans will determine the direction of Arizona’s energy future – whether we follow the path of California with sky high rates and rolling blackouts, or we ensure affordable, reliable, and plentiful energy into the future. These ESG plans push us down the former, and that’s why the Commission must reject them outright to protect ratepayers and ensure just and reasonable rates.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

Join our FREE Grassroots Action List to stay up to date on the latest battles against big government and how YOU can help influence crucial bills at the Arizona State Legislature.

New Study Finds Arizona’s Monopoly Utility ESG Goals Will Double Utility Bills

New Study Finds Arizona’s Monopoly Utility ESG Goals Will Double Utility Bills

For several years, Arizonans have faced a threat of radical renewable energy mandates being imposed on our grid. In 2018, the voters overwhelmingly rejected a measure that would have required utilities to generate 50% of their energy with “renewables” by 2030. Then, in 2021, the Arizona Corporation Commission considered, and rejected, a 100% renewable mandate completely banning fossil fuel generation by 2050. But now, the utilities have voluntarily committed themselves to these goals, known as “Net Zero by 2050”, under the broader requirements of their Environmental, Social, and Governance (ESG) commitments.

But a new study commissioned by the Arizona Free Enterprise Club, and authored by esteemed economist Stephen Moore, makes clear the high cost of pursuing ESG. In the study, Moore compares the 10 states with the highest cost for electricity to the 10 with the lowest. He finds that nine of the 10 costliest states have renewable energy mandates. Conversely, his paper finds that 7 of the ten cheapest states have no mandates or mandates that amount to less than 20% renewable energy.

This means, according to the study, that residents in states with mandates have, over the last decade, paid 36.4% more for electricity than those who live in states with no mandates which, for many families, means thousands of dollars a year. In 2022 alone, residents living in states with high “renewable” mandates paid 44% more than those living in states with no mandates. Given this, Moore points to a recent study that estimates that these ESG commitments will increase costs for ratepayers 78% by 2050.

The truth is that the environmental goals required by ESG will make our energy unaffordable and unreliable. Two years ago, the Commission’s own independent cost analysis of renewable mandates projected a $6 billion cost to ratepayers. Moore’s study builds on this, showing the future Arizona ratepayers can expect based on the actual experience of other states who have pursued ESG environmental goals: far higher costs.

This new study comes as the Club, hundreds of ratepayers, and former Corporation Commissioner Justin Olson have been asking the ACC to ban ESG, and warning that without a prohibition, every downstream decision, including future rate hikes and resource plans, will be shaped by it.

Just last week, the monopoly utilities submitted new Integrated Resource Plans (IRP) which determine the type of energy production they will build for the next decade and a half. Considering their public commitment to ESG, it’s no surprise that these plans all work toward Net Zero by 2050, retiring coal generation by 2031 completely, and relying almost entirely on solar, wind, and batteries with little to no new natural gas. Based on Moore’s new study, these plans will inevitably cost ratepayers billions, leading to a likely doubling of utility bills.

Read the full paper by Stephen Moore here.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

Join our FREE Grassroots Action List to stay up to date on the latest battles against big government and how YOU can help influence crucial bills at the Arizona State Legislature.

The Corporation Commission’s Decision to Roll Back EV Subsidies Is a Big Win for Ratepayers

Rolling Back Electric Vehicle Subsidies and Reducing TEP’s Rate Hike Are Big Wins for the People of Tucson

For years, the Arizona Corporation Commission (ACC) has been the stomping ground for the left to push its Green New Deal Agenda. In fact, it was just over two years ago when the commission quietly released its plan to impose California-style energy mandates in our state. Their goal was to ban fossil fuels and require most electricity companies to provide “clean” energy by 2050. Thankfully, the commission voted down these energy mandates in January 2022. But that hasn’t stopped the left from trying to find other ways to exploit the ACC.

One of their latest efforts has centered on Tucson, where they tried to push Prop 412 to create a taxpayer slush fund for Green New Deal pet projects. After a concerted effort to fight back with facts and inform the people of Tuson about what Prop 412 would mean for them, it was defeated. But the left wasn’t done yet.

As part of its Green New Deal agenda, Tucson Electric Power (TEP) also asked the ACC for rate hikes to subsidize electric vehicles (EV) that strain the grid and increase the risk of blackouts. TEP has been offering owners of electric vehicles (and them only) special, low electricity rates. They also give EV owners an additional five percent reduction for certain surcharges, just for owning an EV. These artificially low rates are to encourage EV owners to charge their cars overnight because TEP worries that charging during the day will crash the grid and cause blackouts.

This is not only unreasonable, but it’s unfair. Non-EV owners should never be forced to subsidize the cost of EVs or pay for incentives that attempt to protect the grid from the strain EVs put on it.

That’s why Commissioner Nick Myers proposed several amendments to the proposed rate hike to roll back subsidies for EVs. And the Free Enterprise Club helped lead the charge to get several TEP customers to email and show up at the commission hearing to oppose the EV subsidies.

While TEP did end up getting a rate hike, eight amendments from Commissioner Myers were adopted, resulting in a reduced rate increase for TEP customers. Among the amendments adopted were:

    • An elimination of the unfair subsidy benefiting EV owners.
    • A requirement to refund customers any unused Demand-Side Management Surcharge funds remaining after December 31, 2023.
    • A modification of TEP’s rate plans to encourage off-peak vehicle charging.

Because of these efforts, the estimated bill increase for TEP customers will be lower than originally proposed. And that’s a big win for ratepayers. After all, if someone wants to own an electric vehicle, it is within their right to do so. But EV owners should be the ones responsible for paying for the costs associated with the necessary infrastructure improvements. And they certainly should be paying for any excessive demand placed on the grid—not getting discounted rates.

Now, ratepayers in Tucson will have a little less money taken from their wallets, and this victory is another example of why it’s so important to stay informed, get involved, and fight back.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

Join our FREE Grassroots Action List to stay up to date on the latest battles against big government and how YOU can help influence crucial bills at the Arizona State Legislature.

New Study Finds Arizona’s Monopoly Utility ESG Goals Will Double Utility Bills

The Corporation Commission’s Meeting Next Week Could Have a Huge Impact on You

If you don’t typically pay attention to the Arizona Corporation Commission, now is a good time to start.

The role of this government agency is to set rates and policies for utilities. That sounds simple enough, right? But for over a year now, the commission has been in the process of developing a “clean energy” plan that looks to ban all fossil fuels in our state. Next week, this renewable energy mandate will be brought up for a vote again. And the consequences could be a disaster.

Green New Deal mandates would cost ratepayers over $6 billion

In July 2020, the commission quietly released its plan to impose California-style energy mandates in our state. But it wasn’t until August of this year that an independent cost analysis had been completed. And the results were eye-opening.

In order to achieve the 100% clean energy mandate by 2050, utilities would need to phase out all fossil fuels, purchase more solar and wind generation, expand lithium-ion battery storage, and convert natural gas generation to green hydrogen. The cost for all this would be over $6 billion, which comes out to an estimated $60 per month or $720 per year for the average ratepayer.

Remember when the green energy lobby said that these mandates would actually save you money? It turns out that was just another lie. But the cost isn’t the only issue.

Following California’s lead on just about anything sounds like a bad idea. But that’s especially true when it comes to energy policies. It was just last year that our neighbors to the west implemented rolling blackouts during a significant heatwave. (Imagine how that would go on a 110-degree day in Phoenix.) And then this year, to protect their own grids during the summer, California actually bought up power around the West. What does that say about the reliability of “green energy”?

Despite having a front row seat to California’s grid meltdown, our own commission is still looking to go all-in on the Green New Deal. But that’s not all. The Arizona Corporation Commission is considering something else that could have a huge impact on the reliability of your service.

Utility workers could face a vaccine mandate

Along with the vote on renewable energy, the commission will also be taking a vote to decide if they are going to implement a vaccine mandate for all utility employees.

We already know that vaccine mandates are dangerous. And no employee should ever be forced to get the jab to keep their job—including utility workers. But if these highly experienced and trained people quit or get fired due to a vaccine mandate, we would lose valuable employees with the skills needed to keep our energy safe and reliable. And while a federal judge’s decision to stop President Biden’s vaccine mandate for federal contractors earlier this week could help, it’s only temporary for now.

Thankfully, Commissioners Justin Olson and Jim O’Connor have called on their fellow commissioners to prohibit the agency from forcing employees to get vaccinated to keep their jobs. But it will take a majority to make sure this happens. That’s why it’s critical that the Arizona Corporation Commission hear directly from you on both these issues.

Will you email Leah Márquez Peterson, Chairwoman of the Corporation Commission, and ask her to do 2 things?

  1. Vote NO on the proposed renewable energy mandates. (Please include the following Docket: RU-00000A-18-0284.)
  2. Vote YES to stopping this unconstitutional vaccine mandate. (Please include the following Dockets: AU-00000A-20-0050 and RU-00000A-21-0373.)

You can email her directly at LMarquezPeterson-Web@azcc.gov.

By doing so, you can help protect freedom for utility workers and ensure that the reliability of your service is not impacted by Green New Deal mandates or a vaccine mandate.

Cost Analysis Shows AZ Green New Deal Energy Mandates Will Cost Ratepayers Over $6 Billion

Cost Analysis Shows AZ Green New Deal Energy Mandates Will Cost Ratepayers Over $6 Billion

It turns out that upending Utility energy production and mandating “clean” energy by an arbitrary date costs money. A lot of money actually—to the tune of over $6 billion according to a new study commissioned by the Corporation Commission.

This study comes over a year after the Commission first announced its Green New Deal Energy Rules. Many votes have taken place since then, votes that would impact ratepayers, yet no independent cost analysis had been done until now.

The green energy lobby repeatedly told the Commission that the mandates (which were rejected by a margin of two to one on the ballot in 2018), would actually save ratepayers money and have an economic benefit of $2 billion. Seemingly everyone in the Corp Comm echo chamber and the media actually believed these suspicious figures. Everyone except Commissioner Justin Olson. He introduced an amendment last April to ensure that costs incurred by Utilities to comply with the mandates aren’t passed onto ratepayers. The amendment failed. It turned out that the same people claiming that energy mandates save people money didn’t believe their own hype and fought to kill this ratepayer protection.

We already know that previous mandates have led to higher utility bills and boondoggle projects. The Renewable Energy Standard and Tariff adopted by the Commission in 2006 (requiring 15% renewable energy by 2025) resulted in APS signing a 30-year contract for solar energy costing 400% above market rates. All passed onto the ratepayer.

Thankfully prior to leaping before they looked, the Commission agreed to conduct a study with an independent firm to identify the potential cost of additional mandates. The firm they hired—Ascend—compares 3 different portfolios of energy production: “Least Cost” which relies on utilities pursuing the lowest cost option for consumers, an 80% clean energy mandate by 2050, and a 100% clean energy mandate by 2050. In order to hit the 80% or 100% mandate requirements, utilities would need to phase out all fossil fuels, purchase more solar and wind generation, expand lithium-ion battery storage and convert natural gas generation to green hydrogen.

The result? The difference between the modelled Least Cost portfolio and the 100% reduction for APS is over $6 billion. That’s $6 billion that would be footed by ratepayers. This comes out to an estimated $60 per month, an 80% increase per bill for the average ratepayer.

There certainly are cost-effective and reliable renewable energy options for utilities. And when it makes sense to invest in or purchase from them, the utilities are free to do so. But those investments should not come at the cost of higher utility bills, and utilities should be required to justify those investments to the Commission.

If a utility makes a bad investment or signs a bad contract, the liability should be on them, not the ratepayer.

But when the Commission adopts mandates, as it did in 2006 and is now considering again, it shifts risk and liability away from utilities (and the dozens of special interest groups that profit from mandates) to ratepayers.

The role of the Commission is to protect ratepayers by ensuring just and reasonable rates, not engage in energy policymaking. By injecting itself into these market decisions, the Commission ties its hands from its constitutional role and allows utilities to dictate rates and harm ratepayers. Instead of new mandates, let the utilities make investments in renewable energy production when and where it makes sense to do so, and in the process protect ratepayers from bad investments and contracts.

Help Protect Freedom in Arizona by Joining Our Grassroots Network

Arizona needs to have a unified voice promoting economic freedom and prosperity, and the Free Enterprise Club is committed to making that happen. But we can’t do it alone. We need YOU!

Join our FREE Grassroots Action List to stay up to date on the latest battles against big government and how YOU can help influence crucial bills at the Arizona State Legislature.