Big Squeeze

A special, existential absurdity accompanies the state of being a citizen of Arizona. The great, swelling, air-conditioned cities of the Southwest each attracts denizens with particular promises. The tag lines are expressive, “What happens in Vegas stays in Vegas”, “Entertainment Capital of the World”, “The City Different”, “America’s Finest City”.

Los Angeles flaunts itself. Las Vegas celebrates itself. Santa Fe examines itself. San Diego prides itself.

In Arizona is proclaimed, “The Valley of the Sun” and “The West's Most (Mid)western Town”. Living in Arizona comes only with the promise of easy winters amidst a prosaic culture. To those familiar with the Arizona milieu, there can be little wonder why Harlan Ellison’s 1970’s classic, A Boy and His Dog was set in a barren, post-apocalyptic Phoenix underlain by an insipid, predatory, subterranean Scottsdale; and why the smartest and most interesting creature in the story was a dog.

Ruling above ground today in Arizona are the vapid tenets and myopic vision of Goldwater “conservatism”. Scottsdale names its streets after such dogmacrats. The predatocracy is already firmly established in preparation for the apocalypse now being foreshadowed by Arizona’s most recent economic “malaise”.

Rate Crimes’ midsummer Executive Summary focused on the structural elements of the central analysis of the predatory economics. As the end of the year approaches it is time to recap and expand the list of predations relevant to clean, sustainable solar energy:

1. The long-standing and now unique system of repressive utility rate schedules that has long impeded the advancement of solar energy.
2. The shell game of hidden, regressive taxation that results from the rate schedules.
3. The further regressive taxation of the Renewable Energy Standards and Tariff scheme.
4. The rapid emergence of leasing programs and companies whose economic viability depends on an ephemeral and regressive incentive scheme.
5. The not so “choice” surcharges for electricity from the utilities’ “green” energy programs.
6. The hidden costs of traditional energy generation.
7. The multi-million dollar compensation for utility executives who have left Arizona ill-prepared for the impending energy gap.
8. The ludicrous kabuki theatre of Arizona energy politics wherein costly institutions exist only to maintain a distracting charade.

In A Boy and His Dog, the protagonist, Vic, is a virile, wide-eyed youth who enthusiastically follows an enchantress into the underworld to discover that he is absurdly valued only for what an impotent society can literally squeeze from him. Happily, his faithful and perceptive best friend comes to his rescue.

Woof!

---

Solar-Powered Coal

Arizona’s Green Divide has a less apparent extraction of wealth from captive electric utility ratepayers and taxpayers.

These unsuspecting payers are funding the installation of solar electric systems on their more fortunate neighbors’ houses; thereby assisting their neighbors to abandon them to pay for an ever greater share of increasing utility electricity costs.

These captive ratepayers are also funding the electric utilities’ acquisition of environmental (a.k.a. carbon) credits.

There is an environmental credit associated with each kilowatt-hour (kWh) of electricity produced by your RE System, which represents the environmental benefits, emissions, reductions, offsets and allowances attributable to the generation of energy from your RE System. Title to and ownership of any and all environmental credits associated with your RE System will be assigned to us when we make payment of the Credit Purchase Payment to you. Thereafter, we will have exclusive title to and ownership of all such environmental credits. The calculation, use and retirement of any and all environmental credits will be in our sole and exclusive discretion. Your acceptance of the Credit Purchase Payment operates as your waiver and relinquishment of any right, title, claim or interest in the environmental credits and entitles APS to any and all environmental credits associated with your RE System from the Effective Date of this Agreement through the date that is twenty (20) years following the Commissioning Deadline (as defined below).
- Arizona Public Service agreement

These credits allow the utilities to maintain and extend the consumption of toxic fuels. Will Arizona develop the world’s first effectively solar-powered coal mine?

Solar Phunny

The City of Phoenix, Arizona Public Service, SolarCity, and the National Bank of Arizona are collaborating to bring on-site solar electricity to a few of the city’s less affluent homeowners. The Solar Phoenix program will allow 1,000 Phoenix homeowners who lack the means to purchase a solar electric system to instead lease a system. The initial program will provide more than a megawatt (nameplate) of proximally-produced solar electric energy to the citizens of Phoenix. The Solar Phoenix motto is “Energizing Phoenix with Affordable Solar Power” [emphasis mine].

Rate Crimes applauds any effort to bring the full benefits of solar energy to all the citizens of Arizona, our nation, and the world. However, bringing solar energy to 1,000 homeowners’ roofs is not necessarily the same as bringing these 1,000 homeowners the full benefits of solar energy.

As described in Arizona’s Green Divide the funding for the solar rebate programs are extracted from all the electric utilities’ ratepayers. However, only a small segment of relatively wealthy homeowners have been able to reap the benefits of the REST scheme.

The Solar Phoenix program purports to bring affordable solar energy to another slender segment of Arizona homeowners. Yet, for the privilege of using their valuable roof space, the program will deliver to lessees benefits that are far more slender than the full benefits enjoyed by those fortunate enough to be able to own, rather than lease, a solar electric energy system.

Here is how the Solar Phoenix program appears to operate within the REST program:

The vast majority of taxed citizens/ratepayers are still receiving no direct benefit from their contributions. However, they are now supporting a few more neighbors, their electric utility, the City of Phoenix, the National Bank of Arizona, SolarCity, and Arizona’s solar module manufacturer, First Solar, whose modules SolarCity is using. What percentage of the ratepayer (and taxpayer) funds that are going into this regressive economic system is reaching the lessees?

As I have been explaining for the past half-decade, solar energy in the form of electricity in our nation’s sunniest state has long been less costly (affordable!) than the electricity from traditional forms of energy generation. Yes, there are considerations that confound the rapid adoption of solar energy. However, compounding hidden taxation resulting from a regressive system of rate schedules with further regressive taxation from a supposedly pro-solar incentive program, and then playing phunny with the money through suspect leasing programs is hardly a solution.

---

P.S. Aren't paintbrush circles a bit passé?

Arizona's Green Divide

There is a deep chasm in the Grand Canyon State. It is a chasm deepening so quickly as to shame the timeless workings of geology.

The Arizona Corporation Commission’s Renewable Energy Standards and Tariff (REST) rules are an inherently flawed attempt to animate a languid solar industry†. The major flaw is the process by which wealth is extracted and redistributed. Here is how it appears to operate:

Fees for the REST are assessed on each electric utility bill. All residential “ratepayers” are assessed equally based on monthly kilowatt-hour (kWh) consumption. The fee has a maximum limit. For example, a residential ratepayer is charged 0.3288 cents for each kWh consumed up to a maximum charge of $1.32 per billing period. This limit represents approximately 400 kWh of consumption.

The funds gathered by this scheme are distributed through a rebate program administered by the electric utilities. The funds are distributed to homeowners who possess the discretionary funds to purchase a solar electric energy system. These relatively wealthy homeowners gain the advantage of the rebate programs, escape electric utility costs, and therefore abandon the unfunded citizenry to pay for an ever greater portion of the increasingly expensive energy from the utilities. Furthermore, because they are escaping electricity costs, the solar overclass contributes less to future REST funding!

Can a strong, independent, sustainable solar energy industry be created based on a regressive economic scheme?

---

†Why the Arizona solar industry has so long remained listless is explained elsewhere in the Rate Crimes energy blog.

Energy Shavings

Over $2.7 billion in formula grants are available under the Energy Efficiency and Conservation Block Grant (EECBG) Program. The U.S. Department of Energy (DOE) awards these federal taxpayer funds to units of local and state government, Indian tribes, and territories to develop and implement projects to improve energy efficiency and reduce energy use and fossil fuel emissions in their communities.

To date, Arizona has been awarded over $28 million in future EECBG projects.

Arizona is trending strongly towards a black energy future because of a decades-long imposition of rate schedules that repress the investment value of solar energy and energy conservation measures in the commercial sector. The rate schedules shift an inordinate burden of energy costs into the captive small business sector; where then the costs are passed through to Arizona consumers. This effectively creates a hidden, regressive tax. Because of the inequity of Arizona’s Renewable Energy Standard and Tariffs (REST) rules, wealthy homeowners have the ability to more easily escape rising energy costs, while less fortunate renters are left to carry a doubly inordinate burden of rising energy costs piled upon a hidden energy tax.

If conscientious renters wish to support clean energy, they are further insulted by incurring a surcharge for such energy from the electric utilities. Furthermore, the densely packed renters are subsidizing the higher energy costs that result from the outspread infrastructure built to satisfy the developers, builders and owners of the houses dispersed across the distended sprawl of the Phoenix metropolitan area.

The DOE states, “Transparency and accountability are important priorities for the EECBG program and all Recovery Act projects.” The DOE can award tens of millions of taxpayer dollars to a misbuilt megapolis that is fundamentally and structurally inefficient and unsustainable. Yet, Rate Crimes, one of the few entities attempting to bring transparency and accountability to energy policy in our nation’s sunniest state, does not qualify for even the tiniest grant.

Sunny Arizona remains a final remnant of repressive electric rate schedules that induce extravagant consumption. The utilities profit from increased consumption. State and local governments gain from the concomitant increase in (regressive) tax revenue. The utilities magnify energy costs in the captive small commercial sector which must consequently increase their charges to consumers for goods and services. Again, the state and local governments gain from increased sales taxes. There are no real brakes on this machine. Ineffectual deceptions such as the Residential Utility Consumer Office (RUCO) serve only to disguise the dim reality. Arizona citizens serve to move money into the pockets of politicians and into the bank accounts of the shareholders of privately held utilities.

Now, federal taxpayer funds are being injected by the DOE into this cryptic and broken system. Until the Arizona rate schedules are repaired, yet another source of public funds will be shaved off.