Arizona to Roll Back Efficiency Standards

When you see things happen that just don’t make any sense at all, it’s probably politics.

Last year the state of Arizona was ranked fourth in the nation by the American Council for an Energy-Efficient Economy on their list of states whose utility customers saw the most savings on electricity. This was due to the comprehensive energy efficiency standard that was passed unanimously in 2010 by the bipartisan Corporation Commission. Despite the fact that the standard has been enormously successful by any measure, saving consumers and businesses in the state $540 million, last week the commission quietly proposed a resolution to essentially repeal it -- gutting it to the point where it has no targets and no directives.

This is the same commission that, back in 2010, said, “The Corporation Commission has long recognized the value of energy efficiency and the benefits from the existing programs at regulated utilities and has approved rules to address how to expand energy efficiency efforts and align incentives to harness greater benefits for consumers.”

The now-endangered standard requires utilities to design programs for demand side management (DSM) and energy efficiency (EE) and has put in place targets that require a 22 percent reduction in power by the year 2020. In the four years since the standard was put in place, Arizona climbed from the 29th to the 15th most energy efficient state in the nation.

What could have happened to trigger such a radical change in philosophy?

Well, there were some changes in personnel. Kris Mayes, who served as chairwoman of the commission when the rule passed, is no longer on the panel. She now serves as director of the Arizona State University Utility of the Future Center. When local publication AZCentral asked for comment, she said: "This is just crazy. Nothing in the record suggests the standard is not working. This is just offensive."

The matter is in a public comment period until Nov. 18. Those interested in commenting can do so using this downloadable PDF. For more information, check out Southwest Energy Efficiency Project (SWEEP).

If this all sounds disturbingly familiar, you’re probably thinking about Ohio, which took a similar Grinch-like action last May, hastily passing a measure in the middle of the night that effectively 'froze' that state’s energy efficiency and renewable energy standards at current levels. That bill, SB310, passed the state legislature by a near 2-1 margin.

Like Arizona's standard, the original Ohio bill, SB221, passed in 2008 by an overwhelming majority (32-0 in the Senate and 93-1 in the House). Like in Arizona, the Ohio bill was also tremendously successful, with utilities exceeding their targets by 50 percent each year -- at an average cost under 2 cents per kWh. This saved ratepayers more than $1 billion. Under the new law, no new savings are required over the next two years.

If there is still any question in your mind as to who was behind this, let me cite some language:

“It is also the intent of the General Assembly to get a better understanding of how energy mandates impact jobs and the economy in Ohio and to minimize government mandates. Because the energy mandates in current law may be unrealistic and unattainable, it is the intent of the General Assembly to review all energy resources as part of its efforts to address energy pricing issues. Therefore, it is the intent of the General Assembly to enact legislation in the future, after taking into account the recommendations of the Energy Mandates Study Committee, that will reduce the mandates in sections 4928.64 and 4928.66 of the Revised Code …” [emphasis added]

If you don’t recognize the language and the “you can’t tell me what to do” tone, then you haven’t been paying attention. Indeed, it was that pack of legislators who call themselves ALEC that penned a “model bill” called Electricity Freedom Act in 2012 that they are now peddling door to door, state to state.

Their rationale? Renewable standards interfere with free market forces. That logic is suspect for any number of reasons. First of all, the utility industry grew up as a government-regulated monopoly which had nothing to do with the free market.

Secondly, the point has been made numerous times: To wait for a market signal on climate change is not a rational approach to the problem, since the global nature of the phenomenon results in a disconnect and a huge time delay between cause and effect. We can’t wait for New York to be knee deep in water before we decide to do something about it.

Finally, the Department of Defense has definitively stated that climate change is a matter of national security. Does the free market dictate national security policy? Should it?

The losers in this action will be the majority of citizens and businesspeople in both states who will end up paying more for electricity, suffer poor air quality and, worst of all, experience additional strain on their already overtaxed water supplies. Meanwhile the winners, as far as I can see, will be a handful a very wealthy individuals getting even wealthier on coal and electricity sales.

Of course there will always be free-market advocates, and that voice is welcome, but in a civil society, you also need rules to protect the greater good. That’s why selling cocaine is illegal, even though there is lots of money to be made in it. A free market that rewards companies on the amount of energy they sell, regardless of whether it is clean or dirty, is out of alignment with the values and goals of today’s society. As I see it: People who use their wealth to manipulate the rules in order to further their own gain, in blatant disregard of the common good, are in violation of the spirit on which this nation was built. And now that they have been further empowered, I believe these people pose a very real threat to our democracy.

Editor's Note: An earlier version of this post reported that the Arizona measure was already passed by the Corporate Commission. The measure has been proposed and is in a public review period until Nov. 18. 

Image credit: Lon&Queta:Flickr Creative Commons

RP Siegel, PE, is an author, inventor and consultant. He has written for numerous publications ranging from Huffington Post to Mechanical Engineering. He and Roger Saillant co-wrote the successful eco-thriller Vapor Trails. RP, who is a regular contributor to Triple Pundit and Justmeans, sees it as his mission to help articulate and clarify the problems and challenges confronting our planet at this time, as well as the steadily emerging list of proposed solutions. His uniquely combined engineering and humanities background help to bring both global perspective and analytical detail to bear on the questions at hand.

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