How will fate of Prop 127 impact your energy bill?

Business News | 2 Nov, 2018 |

Arizona has long been a strong leader in the solar industry. It ranks third nationally in solar energy use with more than 100 significant solar energy businesses.

However, it may be at risk of losing that ranking: It all comes down to Proposition 127.

In 2010, approximately 93,000 jobs were found in the national solar industry, but that number grew to just over 250,200 solar jobs as of 2017, according to The Solar Foundation‘s annual National Jobs Census. The country saw a 168 percent increase in the solar workforce in just seven years.

According to the Solar Energy Industries Association, 8,400 solar jobs are found in Arizona making it one of 29 states that saw a significant increase in solar job trends.

In today’s political climate, global warming has become a hot topic.

• In Washington, voters will decide whether to pass the country’s first tax on carbon dioxide pollution.

• New Mexico residents will elect the next public lands commissioner in charge of regulating methane emissions.

• Colorado will vote on its future of fracking and Nevada and Arizona will decide on the fate of solar energy growth requirements by 2030.

Prop. 127 has been a controversial topic throughout the 2018 election. In both Arizona and Nevada, the initiative requires that electric utilities produce 50 percent of their electricity from wind and solar by 2030.

Almost 30 states have already implemented programs related to renewable energy initiatives; however, only a handful of those states have proven to be more determined  – among those is Arizona’s largest neighbor, California.

Former Wall Street executive and billionaire liberal donor Tom Steyer is battling to turn Arizona green – then possibly blue if he can defeat Arizona Public Service on the vote for Prop. 127.

The ballot initiative moves to bump requirements for utilities under the Arizona Corporation Commission mandate to produce their electricity from renewable sources from 15 percent to 50 percent by 2030.

APS contends the proposition in stating that it would force to close the doors of the Palo Verde Nuclear Generating Station which provides power for more than 3.7 million people.

“ APS is going to ask for higher rates no matter what happens in this election. Their regulators are captive so they will do what’s best for APS rather than the ratepayer. 127 is the only way left to hold them accountable and to keep Arizona moving in the right direction,” Arizona resident Ryan Hurley said.

Arizona Public Service, founded in 1886, serves roughly 1.2 million customers and has ownership interests in coal, nuclear gas, oil, and solar generating facilities. The energy company is a strong contender for Proposition 127, many Democrats say it is because of the organization’s varying interests in coal and nuclear energy.

“Utility companies are already moving toward renewable energy. I’m on a fixed income and cannot afford an increase in my utilities and those rates will certainly go up with this mandate. Ask yourself why a California billionaire is pouring millions of dollars in supporting an Arizona proposition,” Arizona resident, George Zeigler said on Facebook.

Both oppositions have fairly good points in supporting or condemning the proposition, so what’s a voter to do?

The Opposition

Several states including Hawaii, Alaska, Colorado, and California have enacted similar energy mandates to Prop. 127 and these states are paying higher utility rates than those with lower mandates (REMs). California is an example. It moved to support a 50 percent renewable energy by 2030 initiative in 2015. Residents were charged 20 cents per kilowatt-hour, which adds up to just under $2,000 a year.

Arizona residents will see a spike in their energy bills every month, according to ‘No on 127’ spokesman Matthew Benson. This will have a large impact on lower-income communities and elder residents.

“Consumers will see an extra $1,000 at minimum per year in utilities. Arizona is already moving toward clean, renewable energy. We are moving in the right direction and we’re doing it in a way that keeps energy stable,” Benson said.

The Support

In August 2018, APS  parent company Pinnacle West released its quarterly earnings data that showed a profit of $166.7 million over three months. During a 10-month period, APS raised its rates more than it said it would for a state-sanctioned monopoly that made approximately $480 million in profits with a large salary increase attributed to the CEO. The profit was $33 million over the $95 million they projected the rate increase would bring in over a year, according to Clean Healthy Arizona.

Supporters of the initiative say that big corporations like APS don’t want to make this large of a change because it will affect its profit earnings in the future. As for those concerned about the Palo Verde Nuclear Generating Station’s operations, it is highly unlikely the plant will close. Four large corporations including Salt River Project, APS, Tucson Electric Power and NV Energy, voted in Feb. 2017 to close the Navajo Generating Station in favor of cheaper power from natural-gas plants; it was not solar power that killed it. Proponents argue that a number of scare tactics have been deployed by utility companies because they will never meet their estimated profits if they’re forced into renewable energy. Those voting yes are hoping to take back some of their power from big corporations like APS and SRP.

The future is not predictable and both sides debate with contradicting data from their trusted economists. While supporters say voting yes would shrink electricity bills in Arizona by $4.1 billion between 2020 and 2040 and will add 15,810 more jobs in 20 years; opponents say studies show just the opposite. Rates will increase to almost $2,000 a year and around 300,000 jobs will be lost through 2060.

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