Friday, October 16, 2009

PIRG Version

The Arizona Ostrich

The version of energy efficiency that is promoted by nearly all interested parties in Arizona neglects the central economic constraint imposed upon Arizona’s exploited energy market.

Even though the Rate Crimes blog was created only in May of this year, its central message – that Arizona electric utility rate schedules repress the value of solar energy and energy conservation in the nation’s sunniest state – has been declared in a variety of media and venues over the past half decade.
Yet, five years after the message was first broadcast, even the strongest advocates of solar energy and energy conservation remain inattentive to this fundamental economic issue. Repressive rate schedules have denied Arizona a sustainable future and have led to the state’s failure to become the prime catalyst of the world’s solar energy future. Advocates of all cloths remain focused on limiting energy price increases while ignoring both the inequities inherent in the existing rate schedules and the dangers of hiding the real immediate and future costs of toxic fuels.

Artificially limiting today’s utility cost increases only perpetuates the economic shell game and further delays the advent of the world’s solar future. Last week’s congratulatory letter from the Director of Arizona Public Interest Research Group (Arizona PIRG) is emblematic of this flawed calculus:

October 9, 2009

Congrats! Thanks to those of you who encouraged the Salt River Project (SRP) to increase their commitment to energy efficiency, their board voted to spend millions more on energy efficiency programs and renewable energy resources at no additional cost to ratepayers. [emphasis mine]

This is certainly a success and could not have been achieved without the support of SRP ratepayers and others. As we told the media, "By voicing opposition to the proposed SRP rate hike, ratepayers scored and ended up winning more stabilized prices, greater reliability and a reduction in infrastructure costs through improved energy efficiency."

While the recent SRP vote is a victory, there is still much more SRP, Arizona Public Service, Tucson Electric Power and other utilities in Arizona need to do to increase energy efficiency. I look forward to working together to make this happen.


Diane E. Brown
Arizona PIRG Executive Director

If the balance of “millions more” is not to be pried from ratepayers but rather to be derived from the efficiency programs, one must wonder why the utility did not long ago implement such efficiency measures and enjoy the profits. Why was it necessary for ratepayers to “voice opposition to the proposed SRP rate hike” before these efficiency programs were initiated? Why does the utility need to “increase their commitment to energy efficiency”? Should they not already be fully committed to energy efficiency for both their own benefit as well as the public’s? Would not having long ago provided honest rates and rate schedules been more than enough of a commitment to this end?

While Arizona energy prices remain artificially curbed, and the utilities’ rate schedules continue to repress the value of solar energy and energy conservation measures, then to impose belated efficiency programs is only a reactionary symptom of the byzantine economics of poor central planning. This continuation of a debilitating exercise in market capture imposes yet another debt burden on our children.

Advocates for energy efficiency, solar energy, and sustainability would do well to pull their heads out of the caliche and shift their priorities towards resolving the fundamental issue of repressive rate schedules and to begin transferring our investments into truly sustainable solutions.


  1. I agree, I'm the only person who wants rates to increase. When we have had artifically low prices so people don't see how it pays to be more efficient and to make energy right at your home.

    The utilities also get incentive priced power so even they think coal and nuclear are low cost. They are learning now that the cap and trade along with the EPA enforement of the Clean Water Act will run those prices sky high. So even utilities are learning the true cost of power now that the current administation is making laws that make sense and enforcing those that have been neglected for 30 years.

    The value of Solar will rise as the cost of pollution and water use gon into effect. The best policy is to have all energy priced at the true cost including pollution and remove all subsidies.

  2. Wouldn't it be better to approach this from another angle: Regulating ALL future development to be TOTALLY energy efficient and mandating NO MORE COAL PLANTS. This may result in enforced conservation. Not a problem for me. I would be happy to go to public places in September whereby the air conditioning has been SHUT OFF. Alternative approaches would protect the rate payer from what you consider artificially low match the economy of this region...the land of cheap labor, ala illegal alien labor and millions of unemployed americans. I suppose you may think this is 'apples and oranges'. Not really. It's just a matter of thinking 'outside the box'. Just something to chew on...

  3. Well said, jstack. My hope is to better expose what have too long been "externalities" by correcting the repressive rate schedules and the hidden, regressive tax they create. Doing so will provide a more transparent and equitable energy market for all of Arizona's citizens. The market captives - small businesses, renters, and lower-income ratepayers - should not be subsidizing large businesses and high-income homeowners.

  4. Thank you, MaryLou.

    I admire your advocacy for what too many would say are extreme solutions. Establishing an aggressive target (< 10 years) for the elimination of coal mining and combustion until such time as it can be proven to be both clean and non-destructive is an ethical response to the increasingly apparent risks. If it can be proven that such technology can and will be in ubiquitous operation within a few years of the target for elimination, then it could be resumed.

    Efficiency is an even greater challenge. Unfortunately, the poor quality of what has already been built will be increasingly recognized as a tragedy of historic proportions. No amount of any energy generation, efficiency retrofits, and/or cohabitation can rescue Arizona from its sprawl of ‘luxury’ homes and offices with their sieve-like construction. And, as these structures age, they will become increasingly inefficient. The increasing costs of energy to both power and to maintain these aging homes will exacerbate the problem. I fear maintenance crises at both individual and societal scales. I am hopeful that the value of small homes of true adobe and non-industrial construction will be rediscovered. An added benefit of this will be an opportunity to create a regional vernacular with more aesthetic appeal than today’s sea of tile roofs.

    The skills to create this next generation of sustainable homes can be readily found amongst our Southern neighbors. I only hope that we can afford their professional rates.