Chamber Business News

Energy mandate will cost families in Arizona

Middle and low-income families in Arizona will feel a financial squeeze with higher utility bills if voters approve Proposition 127 during the general election on Nov. 6, multiple independent studies show. It is estimated, if the initiative passes, the typical Arizona family will see its utility bills increase by $1,000 or more over the course of a year.

That added expense to families and small businesses is one of the top reasons a statewide, bipartisan coalition of individuals and groups has come together to oppose the Prop 127. If passed, the proposition will alter the state Constitution to order utilities provide at least half their energy from renewable sources by 2030. More than 60 organizations have united to speak out against the measure.

Mayors, city council members, state lawmakers, unions, businesses, veterans’ groups, social-service agencies, ranchers and others say fast-tracking this mandate through the ballot box will have unintended  consequences. Added utility expenses may especially hurt those least able to pay, including seniors, low-income families and small-business owners.

“Costly constitutional mandates place an undue burden on Arizona families, especially those already in precarious financial situations,” said George Dean, president of the Greater Phoenix Urban League, which does community outreach to disadvantaged families. “This would be a step in the wrong direction. Down the line, (Prop 127) will eliminate hundreds of millions of dollars away from the classroom in order to pay for the increased costs of heating and cooling our schools.”

Why the added costs from Prop 127? Arizona utilities point to enormous expenses associated with transforming operations to meet the 50 percent renewables deadline. New technology and infrastructure, including construction of large-scale solar farms, require a huge investment. APS estimates its expenses alone will reach $15 billion between now and 2030, if the initiative passes.

Similarly, Tucson Electric Power has termed Prop 127 “reckless,” and said it also will incur significant additional expenses if the measure becomes law. Utilities will be forced to recoup their expenses through their only available means: increased electric rates charged to consumers.

Projected rate increases vary depending on the individual utility and what portion of the state it serves. Specifically:

APS: A new analysis by the Seidman Research Institute at Arizona State University finds the typical APS household will see its utility bills climb by $1,900 over the course of a year, under Prop 127. The cost estimate is higher than projections for customers of other utilities because APS receives much of its power from Palo Verde Generating Station. Prop 127 doesn’t define nuclear as a “clean” energy source, and both APS and the Residential Utility Consumer Office – a State agency – forecast Palo Verde will be forced to close if the initiative passes. The loss of the multibillion-dollar facility, and necessary construction of energy facilities to replace it, helps explain the sticker shock that would await APS ratepayers with Prop 127.

Tucson Electric Power (TEP): A TEP analysis finds its typical residential household in southern Arizona will see its bills rise $500 a year if Prop 127 passes; the average business will pay an estimated $3,400 more per year. 

UniSource Energy Services: UniSource, serving Mohave and Santa Cruz counties, forecasts its customers will pay an extra $650 a year with Prop 127; the average business in Unisource territory will see its annual utility bills climb $3,400.

Grand Canyon State Electric Cooperative Association: The Association represents multiple electric co-ops that serve mostly rural communities across Arizona. Based on a survey of its members, the Association finds Prop 127 will increase co-op utility bills by $540 to $780 over the course of a year.

“The impact could be devastating for many rural families,” warned Casey Ratlief, spokesman for the Grand Canyon State Electric Cooperative Association. “To make matters worse, if the initiative passes, it will be memorialized in the state’s Constitution and will be excessively difficult to amend – no matter how bad the economic impacts on rural Arizona or statewide.”

Victoria Harker

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