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The Battle for Solar Energy in the Country's Sunniest State (newyorker.com) 202

Carolyn Kormann, writing for The New Yorker: Steyer [billionaire Tom Steyer, who for years has tried to pass Proposition 127, an amendment to Arizona's constitution that would require power companies to generate fifty per cent of their electricity from renewable sources by 2030] and his coalition say that the problem is simple: A.P.S. (state's largest utility, Arizona Public Service) is an investor-owned company, motivated primarily by its responsibility to protect profits for its shareholders, many of whom reside out of state. In 2017, the company made four hundred and eighty-eight million dollars, an increase of forty-six million from the previous year. The Arizona Corporation Commission (A.C.C.), a five-member elected "fourth branch" of state government, is supposed to keep the utility's monopoly in check -- setting limits on capital investments and pricing, while guaranteeing a certain margin of profit.

But critics have long argued that the arrangement incentivizes utilities to "gold-plate," or make inessential investments. (The phenomenon even has a name: the Averch-Johnson effect.) For A.P.S., a two-hundred-million-dollar gas-fuel plant would be more lucrative than a twenty-million-dollar solar array because the utility can charge higher rates to recoup its investment costs. Kris Mayes, a former Republican A.C.C. commissioner, who helped write the language of Prop 127, told me the Averch-Johnson effect explains why, in 2017, A.P.S. called for more than five thousand megawatts of new natural-gas additions, and almost no utility-scale renewables. "If they were truly acting in public interest," Kris Mayes, a former Republican A.C.C. commissioner, said, "they would not be proposing fifty-four hundred megawatts of new natural-gas plants."

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The Battle for Solar Energy in the Country's Sunniest State

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  • by Crashmarik ( 635988 ) on Wednesday October 31, 2018 @11:19AM (#57568787)

    When you are buying politicians.

    https://www.npr.org/sections/m... [npr.org]

    Steyer has done uniquely well with it, but if you think he is about clean energy or this proposal is think again

    https://www.azcentral.com/stor... [azcentral.com]

    It will force the early shutdown of APS's nuclear power plant and likely boost greenhouse gas emissions.
     

    • exactly. THis is a disaster bill.
      I will never understand extremists and their followers.
    • by Tokolosh ( 1256448 ) on Wednesday October 31, 2018 @11:51AM (#57568999)

      When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.
              P. J. O'Rourke

    • by Ranger ( 1783 ) on Wednesday October 31, 2018 @02:10PM (#57569871) Homepage
      Arizona has the only nuclear power plant far from a major body of water. It already uses reclaimed water from suburbs of Phoenix upstream [arizonaexperience.org]. What happens when that water is no longer available as the Southwest dries out from climate change? We may very well enter another megadrought forcing most people to leave Arizona in a decade or two. Arizona needs to switch to renewables, increase energy efficiency of buildings (wrap them in thick walls of adobe?), and conserve water, but if the rest of the world doesn't do its part, Arizona is screwed. So Vote Yes on 127 (if you live in the state).
      • Water on this planet is not being created or destroyed. it is only being maldistributed.

        Vote No on 127 as I did, add more air-cooled nuclear capacity at Palo Verde, and have Los Angeles desalinate its own water supply with the added energy. With LA not sucking water from as far away as Wyoming, there will be plenty left over for inland users.

        Think of it as trading Arizona energy for a part of California's allocation of inland water.

      • The southwest drying out won't so much be about climate change, I mean it's already dry -- and gets most of its water from elsewhere.

        The real problem is allowing a metropolis of nearly 5m people to exist in a fucking desert (phoenix) -- and bleeding the Colorado dry to sustain it. There are some externalities at work here that defy logic, and are absolutely not sustainable.

        (Not to mention they actually do grow corn and cotton in the phoenix metro area.. which seems completely god-damn bonkers)

        • by Ranger ( 1783 )
          Re: growing corn and cotton. I agree it is bonkers. The Southwest has experienced natural megadroughts in the past, but it is our overuse and poor water management that is the problem. Global warming is only going to exacerbate it. Last year I read The Water Knife [wikipedia.org], an interesting near future thriller all about water or lack thereof and the fights over it. Hopefully, it will remain a what if scenario.
  • by rsilvergun ( 571051 ) on Wednesday October 31, 2018 @11:29AM (#57568829)
    You don't get efficiency. You get a company skimming 20% off the top of an essential service. This is why you can't pay your power bill with a credit card without a 4% surcharge. The service is essential and (unlike housing) there are no alternatives so they don't have to play nice.

    As for me, I'm in a city that saw smog days 80% of the time this summer. Screw the power company and their half a billion in profit. They need to be forced to build out solar so I can breath. Doesn't matter if I don't smoke if every day I go outside I'm getting the equivalent in bad air. I'm still gonna die of lung cancer in my 50s. And I don't get to move out of the city because I need money and like most working class Americans I live where the jobs are.
    • How exactly is solar going to fix car exhausts?

      • by Calydor ( 739835 ) on Wednesday October 31, 2018 @11:39AM (#57568889)

        Knock-on effect as hybrids and pure electric cars phase into the overall carpool and are powered with electricity originating from solar plants.

        • So what comes first, solar sources or electric car demands?

          I'm hopeful I live long enough to justify solar on my roof to help power a useful electric car. And the A/C. Moderately affordably.

          • by Calydor ( 739835 )

            Why not both? Solar sources will power more than just your car, so there's already a market for that, and the electric cars are being developed right now anyway.

            This isn't a chicken or egg scenario.

          • So what comes first, solar sources or electric car demands?

            In terms of modern widespread usage, solar electricity came first. All-electric cars are still in the early adopter phase (though quickly approaching the end of it), while solar electricity is pretty well into the common availability phase.

      • by rsilvergun ( 571051 ) on Wednesday October 31, 2018 @11:53AM (#57569013)
        means more electrics. But that's kind of a stretch since the ROI on solar is debatable.

        The main thing is that for all the talk of "Clean Coal" and even natural gas those plants still crank out a lot of emissions. Yes, it is possible to build a zero emission coal or gas plant, but it's expensive as hell and you have to change the filters way more than they want to. By the time you're done you could have done solar.

        But that's not the point. They want to spew out their particulates while spewing nonsense about Clean Coal and pocket the extra money.
      • Most smog comes from stuff other than automobiles, especially the newer autos that have emission controls.

    • How many days of sunshine does your city get yearly? Is public transit getting cars off the road? Is residential heating a need, and if so what is being used to provide it? And if not, then is cooling needed, and what's that solution?

      Not knowing what city is yours, I'm not able to consider the sources of the smog. I'm hopeful, however, that it's not on the West Coast. That smog usually comes from cars, since the westerly sources are a longs ways off and we aren't legislating anything to solve those any time

    • The UK seems to have managed privatizing the electricity and gas companies reasonably well and got a competitive marketplace that functions acceptably.

      The problem is arguably, not that the utilities are private companies, but the way the market is structured.

    • Since when has ANY government shown the ability to EFFICIENTLY run ANYTHING?

      It isn't their money, so spending it wisely is inconvenient to maintaining oversized pensions.

      As for the surcharge - government agencies do the same thing. There is a "convenience fee" for using a credit or debit card to pay a tax or license fee, because the government agency is not to be deprived of the FULL VALUE of what you are required to pay. Most businesses will negotiate for a lower rate, because it is a fee they pay. AT&

      • by satsuke ( 263225 ) on Wednesday October 31, 2018 @12:46PM (#57569345)

        How many straw men can you get in one post?

        Government is _exactly_ what's needed for necessary things like power and gas delivery.

        What makes you think a company that answers to shareholders will do things more efficiently, and includes their profit margin, than a public utility that has no profits to generate.

        E.g. your assumption that a public utility is inherently wasteful, or that too much money goes to pensions isn't supported by the large number of agencies that operate utilities very efficently .. the pensions and waste you cite are red herrings.

        Most all public utilities have regulations in place that almost all of the money collected go towards providing the service being regulated.

        There might be surcharges or forward fees in your bill for new infrastructure or power plants, but again, those things are for he use of the rate payers, not the profit margins of the shareholders.

      • The credit card company demands a fee.
        Not the business or the government agency you are dealing with.

        That begs the question: how dumb are you?

      • by dryeo ( 100693 )

        My government ran the electrical utility well for 70 years until we got a more right wing government that claimed to be good business people, who then lowered taxes and made up the deficit by demanding the utility borrow money and give it to the government.
        Unluckily it just takes one election to vote in a bunch of idiots who can destroy things. They're usually business people who can't see past the next quarter and yes, things are good for a short while until the bills come due, usually under the next gover

      • I'll take the bait.. the US managed WWII pretty efficiently!
        War on two fronts, massive logistics and supply chain issues - and all within a span of ~4 years.

      • Since when has ANY government shown the ability to EFFICIENTLY run ANYTHING?

        I'd say the military is quite efficient at their job. But then their job is to kill people and break things.

        The military gets real "inefficient" when they aren't doing their job or training for their job, because at those times they are just busy existing for the next time we need people dead and things broken. Those soldiers and sailors eat a lot of food and burn a lot of fuel when in peace time but when you want something blown up, well, that happens with great speed, accuracy, and just general efficien

    • by dryeo ( 100693 )

      Until you get a right wing government that wants to lower taxes and balance the budget. Then they discover they can demand large royalties from the government owned power company, putting the power company into massive debt while making the governments books look balanced. This also leads to the excuse that the public power company is badly run and should be given to private interests because private is always better.

    • I don't mind private utilities, although I am generally in favor of municipal ones. But I am absolutely opposed to private infrastructure. With public management of the grid, we can (theoretically) have fair competition between energy providers.

    • What you are missing is that there is no competition. If competition were allowed you would see prices fall.

  • by WindBourne ( 631190 ) on Wednesday October 31, 2018 @11:33AM (#57568849) Journal
    First off, he does not live in Az.
    Secondly, he is working at trying to kill off their nuclear power plant. Right now, Az is a low emitter BECAUSE of their nuclear power. Instead of trying to close nuke plants, the far left should focus on replacing fossil fuel plants. In this case, the bill should require that all utilities have a minimum of 60% clean energy, along with requiring 2/3 of the energy to be base-load (i.e. on-demand).
    • Right now, Az is a low emitter BECAUSE of their nuclear power.

      Really? What about the Navajo Generating Station?

      • Navajo is shutting down this year (actually, early 2019). [wikipedia.org] In addition, the majority of their electricity did not go to AZ, but to NV and CA. OTOH, the majority of their pollution was being dropped into the RMF in Colorado, so, I am glad to see it die its death.
      • Right now, Az is a low emitter BECAUSE of their nuclear power.

        Really? What about the Navajo Generating Station?

        Ah yes, the Navajo coal plant that is notorious for creating smog in the Grans Canyon. It is sacrosanct because it's on the Navajo reservation, and a primary source of jobs.

        The same reservation also has a lot of uranium, and there is still more available outside the res on the Kaibab Plateau. The same forces that are responsible for the foot-dragging on closing Navajo are trying to prevent exploitation of the uranium resource because it's, you know, nuclear and evil.

        • Actually, navajo really does not impact the grand canyon that much. It is the Rocky Mountain Forest in Colorado that gets the bulk of the Lead, Mercury, etc from the plant.
  • From TFA:
    "For A.P.S., a two-hundred-million-dollar gas-fuel plant would be more lucrative than a twenty-million-dollar solar array because the utility can charge higher rates to recoup its investment costs. Kris Mayes, a former Republican A.C.C. commissioner, who helped write the language of Prop 127, told me the Averch-Johnson effect explains why, in 2017, A.P.S. called for more than five thousand megawatts of new natural-gas additions, and almost no utility-scale renewables. “If they were truly acti

  • by rickb928 ( 945187 ) on Wednesday October 31, 2018 @11:45AM (#57568947) Homepage Journal

    From the ballot description, which was contested:

    "irrespective of cost to consumers"

    Despite the complaints of the supporters regarding the ballot description, it does appear that the proposition mandates the use of renewable energy sources, as defined in the proposition, without consideration of the cost to ratepayers. This got the attention of many of us in Arizona.

    It's a laudable goal to use renewable sources, but somehow I cannot reconcile the complaints of the proponents of this measure against utility company profits with the apparent intention of the measure to mandate these changes no matter the costs. It's as if they don't mind if the utilities double their rates, with the attendant increases in profits, so long as it's renewable energy they are gouging us for. Or something.

    I also don't much care for the government being put in charge of determining what energy sources will be installed. If renewable energy is desirable, or in some way 'better', this will become evident soon enough. Leave it alone.

    Oh, and then I consider Tom Steyer, a nice enough guy, who lives in San Francisco. Perhaps, tom, you should be working on the problems your home town has, and leave us in Arizona to deal with our problems? Not enough problems in San Francisco? Just go away.

    Yes, I've already voted 'no' on this. Not necessary, not helpful, not now.

    • by FrankSchwab ( 675585 ) on Wednesday October 31, 2018 @12:07PM (#57569111) Journal

      I early-voted "No".

      I strongly believe in Solar Power - especially in Az. We don't have much in the way of wind resources (and I hate the view of windmills anyway), but sun we've got an abundance of. Solar and Fossil fuels are neck-and-neck for 30-year amortized costs, but solar should win simply from a public health standpoint.

      However, I really don't believe complex law should be ensconced in the State Constitution. The entire US Constitution is four handwritten pages long. The first ten amendments fit comfortably on another. This amendment is four pages long by itself. If this was coming up in the legislature, I'd probably support a version of it (using a definition of "clean power" that includes existing hydropower and nuclear power).

      • by dryeo ( 100693 )

        And how many pages do the court cases on why the Constitution doesn't apply amount to? Just consider the 1st and 2nd amendments, which are very simple and all the exceptions ruled on by the courts instead of being put in the Constitution.

    • Oh, and then I consider Tom Steyer, a nice enough guy, who lives in San Francisco. Perhaps, tom, you should be working on the problems your home town has, and leave us in Arizona to deal with our problems? Not enough problems in San Francisco? Just go away.

      It would be good if places started putting limits on people from out of area owning too much.

  • "If they were truly acting in public interest..." they would not be a for-profit organization. For-profit is a great model when you are letting companies provide a service at a competitive price and giving them flexibility about how they provide it. But short term market incentives are often not aligned with the long term public interest, so we have complex regulations that are always being gamed for profit. SNAFU. The only real solution is a public that cares about the long term public interest and h
  • Only works to the extent that the regulated rate of return is better than market rates on Wall Street. No sane investor is going to dump money into assets when the payback is better elsewhere. The big problem with utilities is that they are usually guaranteed rates of return even on non-performing assets. That is: Build a power plant for $X and the utilities commission will allow you to charge 10% of X per year (or whatever the regulated rate is). Even if it generates no power. If it generates nothing, cust

  • While zero profit would be ideal for utilities like electricity, APS is mandated to only turn a 3% profit (no more). It's not like they're out to perpetually increase shareholder value via increasing net profits.

    Also, while opponents to 127 have been putting up "No new taxes! No on 127", signage everywhere, taxes not the real driver among friends I've spoken with. It's the feeling that AZ is already moving in the right direction towards more renewables without the proposition - and that we'll get there soon

    • by dgatwood ( 11270 )

      Spritz in a little conservative ideology - "I've never seen a regulation that helped companies innovate faster," etc. - and you have a general dislike for the prop.

      They are, of course, provably wrong if they believe that. Take a look at how quickly incandescent light bulbs increased in energy efficiency after the so-called "incandescent bulb ban". And this is coming from someone who was initially against the ban, because I didn't think that the necessary improvements in efficiency would even be *possible*

  • âoeThey are fighting this so hard because they know they will make more money off of natural gas than they will off of renewables,â Mayes said. âoeThatâ(TM)s my viewpoint as a former regulator.â

    Greed is human nature, of course they will choose the option that makes them the most money. Humans have survived as long as they have because people are greedy. Nobody can remove greed from the human soul. If you want solar power to succeed then make it cheaper than natural gas.

    Carbon taxes won't fix this, that's an artificial cost that not only will be difficult to pass into law but also merely hides the costs in shuffling the numbers about. The true costs will still be reflected upon the consumer in

    • by dryeo ( 100693 )

      Greed is human nature, of course they will choose the option that makes them the most money. Humans have survived as long as they have because people are greedy. Nobody can remove greed from the human soul.

      Lots of evidence that it is actually altruism that has enabled humanity to survive for hundreds of thousands of years. Tribes that support each other is the reason that people are successful.

      • Lots of evidence that it is actually altruism that has enabled humanity to survive for hundreds of thousands of years. Tribes that support each other is the reason that people are successful.

        There's no altruism in laws mandating the use of solar power.

        If these people wanting solar power were altruistic then they'd be funding these solar power projects themselves, not forcing others to pay for it. As it seems to me the problem isn't that solar power won't make money, it's that it doesn't make as much money as natural gas. Okay, then start a business that's profitable selling solar power. The altruism in this is taking a pay cut for the benefit others. In the end altruism won't pay the bills,

        • by dryeo ( 100693 )

          Good points which I'm not knowledgeable enough to argue. I do know we had a pipeline explosion here (actually 500 miles north) the other week and it sure affected things. Gasoline instantly went up 20 cents a litre, people were told to lower their thermostats, businesses had to scale back, shutdown, or switch to alternatives such as diesel. I'd hate to think how things would have gone if we used it for electricity.

    • especially in a sun state like Az. But there are a lot of vested interests that want profits _now_ and investment when it's somebody else. If I'm a CEO in charge of building a solar plant I just spent several million this quarter that could have gone to shareholders like me (remember most CEOs are paid in stock). Meanwhile those solar farms might be 10, 20 years before they really pay off. I'll be retired by then.

      We've created an economic and political system that incentivizes short term profit and incu
  • by ahoffer0 ( 1372847 ) on Wednesday October 31, 2018 @01:05PM (#57569487)

    I live in Arizona and voted 'no', but my reason is a little different. State constitutions are not the right place for energy policies. The constitution should include things about the structure of government, human rights, who is allowed to vote, powers reserved for the government, and limits to those powers. What kind of ass-hat tries to stick energy policy in a constitution? We have laws for things like that.

    • When you are so corrupt that the ONLY way to do what the majority wants is to let the people vote on it directly--- that is when a constitution amendment is the solution. You can't pass a law because the system is too corrupted and the wealthy elites are too powerful they can hack the system. It's not clean but the system is dirty and polluting your constitution with a few popular amendments gets stuff DONE without waiting for the system to be cleaned... if that is even possible anymore.... you may want

  • Energy is going to become more expensive no matter what mix of energy we use. Might as well install as much solar as possible. Arizona is the sunniest state in the Union and installing solar should be a no brainer. We still need a way to store that energy. I hope molten salt batteries [technologyreview.com], or train car kinetic energy storage [scientificamerican.com] or something else will solve that problem. Vote Yes 127 [azcentral.com]
  • How does this work?

    "a two-hundred-million-dollar gas-fuel plant would be more lucrative than a twenty-million-dollar solar array because the utility can charge higher rates to recoup its investment costs"

    I would think that the utility could charge rates to recoup investment costs of either solar or gas. What am I missing here? I would think that once you have recouped your investment costs, I would assume by charging rates, then it would be mostly profit since you don't have to purchase natural gas.
  • Its intentions are laudable: fight carbon warming by promoting carbon-free energy sources. But not only does it leave out nuclear energy, which is already a large fraction of Arizona's baseload generation, but it leaves out the most important renewable, hydro, which happens to be another large fraction of Arizona's power base.

    Prop 127 promotes only solar and wind as power sources. To put more of these on the grid would require that APS issue 'smart meters' to all customers that would measure demand load con

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