AARP ARIZONA AND PROPOSITION 127

AARP on behalf of its 900,000 members in the Grand Canyon state has not taken a pro or con position on Proposition 127 however we thought it was important to raise our concerns.

Many of our members are on fixed or low incomes and struggling to make ends meet.

AARP advocates for fair and affordable rates and reliable energy service.  We do favor cost effective efforts to increase the percentage from renewable energy. However we want to make sure additionally mandated renewable energy is affordable and useful to ratepayers.

About Proposition 127

Current Arizona Corporation Commission rules require utilities to obtain 15% of their power from renewable energy by 2025.

Ballot proposition 127 would change the Arizona constitution to require that utilities regulated by the Arizona Corporation Commission obtain 50% of their power from certain forms of renewable energy by 2030.

In the Proposition renewable energy includes wind, certain solar, and certain hydro.

It also requires the utilities to obtain 10% of their energy from “distributed energy “meaning roof top solar.

Impact of Proposition 127

While estimates vary, common sense dictates replacing current power sources with new sources of energy (including wind and solar which are intermittent and would need new back up sources of power or storage) would be more expensive.

The Arizona Residential Utility Consumer Office (RUCO) concludes cost increases for APS residential customers would be as high as $52 per month while TEP customers could face up to a $37 a month bill increase by 2030. (SRP is exempt from the measure).

RUCO also concludes the measure would likely force the premature closure of Palo Verde which provides 1,200 MW of carbon free energy.

Proponents such as Natural Resources Defense Council claim the measure would save money – 3%.  They also claim it would reduce costs $4 billion dollars. However, often such claims are inflated using long run analyses and external assumptions (which increase rates in the short run).

AARP comments

AARP is concerned about any measure that could potentially drive up electricity rates.

Further, this measure does not belong in the state constitution, this is an over reach and raises real concern.

Such a technical matter would be properly handled before the Arizona Corporation Commission which has experts that can properly look into the claims of both sides of the debate.  . The Corporation Commission does have the flexibility to order resource mix changes should the economics of one source of power over another change.

We look forward to the robust debate on this issue.