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Market or Mandate?

November 8, 2014

In the upcoming election, three of the five seats on the Arizona Corporation Commission (ACC) are up for grabs. Besides having the authority to set utility rates, the ACC has created a renewable energy standard that, as it currently stands, will require utility companies to produce 15 percent of their energy by renewable means by 2025.

Kris Mayes, one of the current commissioners and one of the strongest advocates of the standard, contends that the standard will help preserve the environment and lower electricity costs over time.

The standard has been a contested issue and is currently the subject of a lawsuit by the Goldwater Institute, which claims the ACC overstepped its bounds.

Eight Republicans and four Democrats are vying for the three spots. The Tucson Weekly asked each candidate (except for one, who seems impossible to contact) about their stance on the standard as it exists, and whether they thought it was the place of the government or the marketplace to advocate cleaner energy. Here’s what they had to say.



John Allen: If you read the Constitution and what the job calls for, it calls for watching out for the consumer. If you’re going to save the planet (by getting a seat on the) Corporation Commission, I think you’re going for the wrong job. … If you read the citings of the Goldwater Institute’s argument, go to the Constitution and then go to the statute, you’ll find that, yes, the Corporation Commission is on some pretty thin ice. … It’s very hard for the payers on poorer and fixed incomes to pay for these exotic ways of generating power when there are others available.

Rick Fowlkes: I think the market is the best way to promote the (clean-energy) generation portfolio of the power companies. … The problem with the current portfolio requirements is that they’re just going to be too expensive for the ratepayers. The power coming out of the Palo Verde nuclear plant costs about 3 cents a kilowatt hour. If (power company) APS brings in their new solar plant near Gila Bend on budget … the power coming out of that facility is 18 cents a kilowatt hour. That extra cost is going to be passed on to the ratepayers, and I don’t think that’s right.

Joseph Hobbs: It depends on how you would quantify and classify (government) help. … In terms of helping with a bully pulpit to promote long-term implementation of renewable sources in the state of Arizona, I’m very much in favor of that. … In terms of the specific renewable energy standard … that actually was overarching and very cumbersome, and I’m not in favor of what it put in place, which is a bunch of mandates. Those mandates are going to require all of the ratepayers of Arizona to absorb a series of rate-increase requests that are going to end up costing us hundreds of millions of dollars before it’s all through.

Marian McClure: I think it’s a combination of both (the market, and government involvement). I think you need to incentivize, and next year, I will approach some of my colleagues about incentivizing the market to, in fact, make more of an investment into cleaner fuel, or cleaner electricity. I wouldn’t try to change (the renewable energy standard) at all. I don’t know that I would have voted for it originally, because I don’t like mandates. But let’s face facts: If you’ve got Tucson Electric Power building a power plant, (Salt River Project) doing the same thing and (APS) doing it, those are the three biggest power companies, and I don’t know why we would want to do anything differently.

Bob Robson: I think it’s appropriate for the commission to set goals, but I think you need to review them on an annual basis. The market can change, and technologies can change as well. You need to keep a fixed and steady hand on where you’re headed. I’d like to see nuclear be part of the (energy) portfolio. The other thing is, I’m not certain as to how it could be changed, because it’s already spurned billions upon billions of dollars in investment in the state. … I think you need to look at whether the overlying technologies are there, or whether or not you need to prefer more of one category and less of another. … It should be very fluid, but it should be with the understanding that we’re going to move forward with renewables.

Bob Stump: I’ve said publicly on many occasions that I think it was appropriate that the ACC set an aspirational goal of 15 percent to nudge utilities in the right direction. Obviously, the 15 percent will have to be reviewed annually, as it is, by the ACC to ensure that market conditions and the latest technological innovations are in place, to ensure that utilities can meet that 15 percent. I do think government has a role to play in terms of our energy future. … As I said, the ACC reviews it on an annual basis anyway. That’s why I think it’s appropriate to see it as an aspirational goal rather than as a mandate that’s set in stone.

Keith Swapp: The government doesn’t need to be involved. Coming from 30 years of working with environmentalists, I know exactly how they think and what they do, and I think the normal, responsible citizen can take and manage a clean environment very, very well. … You have two scenarios with the renewable energy standard: You have the standard itself, and you have the mandate. What a lot of people don’t like is the mandate involved. I’m all for renewable-energy standards, but the mandate, I want to get rid of that. That pulls money out of your and my pocket, and we’re going to see if we can get a reversal on that.

Barry Wong: I think there’s a limited role for the government regarding renewable energy. More specifically, in 2006, when I served on the Corporation Commission, I was one of the key votes that brought in the 15 percent requirement for electric companies to produce renewable energy by 2025. When I served in the Legislature, I was instrumental in advancing a number of tax incentives and tax-credit legislation which passed, and that was the market-based approach to incentivize utility companies to do that with renewables. Some of them did, but it didn’t move up fast enough in terms of the adoption of the clean energy. I think (the renewable energy standard is) where government has a role, though limited, to act as a catalyst to push this renewable, clean energy.


Kara Kelty: The problem with allowing clean energy to be determined by the free market is that we don’t put a price tag on tangibles like clean air or clean water; there’s no cost that’s figured in for how many air pollution days there are in Phoenix. We look at supply and demand in the free-market economy, but we’re not looking at a return on investment in the long term, in terms of investing in new technology. I also think it’s advantageous to be promoting clean energy to our economic environment, because it promotes new jobs. … In terms of private utilities, I think that there needs to be incentives for the utilities to make that switch to clean energy.

Sandra Kennedy: I think that, at the rate we’re going, if government does not play a significant role, I don’t believe that the providers would actually do this on their own. I think cases have proven that if they wanted to do it, they could have done it long before now. So I’m absolutely for government intervention, with setting rules, because, sadly, it had to be done that way. I’m glad to see that the ACC has taken that step. … I would not increase the percentage, because this is something new. We’ve got to make sure that it’s going to work properly, and as we go, we can iron out the kinks. But as far as raising the percentage, I wouldn’t do that.

Paul Newman: I think that the renewable energy standard that has been in place for a short time is not a pure market vision, but it needs to be there. I totally disagree with the Goldwater Institute’s position that it’s unconstitutional. I do believe that there needs to be that incentive to make the public utility companies implement the beginning of Arizona (becoming) a net export solar state. I think (the renewable energy portfolio) is a step in the right direction, and what we need to do is keep the feet of the utility companies to the fire and make sure that they implement it … I’m willing to stay with the standard (as it is) right now, but I want to make sure that the utility companies go in the right direction and implement this standard in a way that will affect rates to a minimal degree.

Sam George: He did not respond to e-mails, and attempts to reach him by phone were unsuccessful.



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