AARP QUESTIONS PROPOSAL TO RADICALLY RESTRUCTURE ELECTRIC INDUSTRY

AARP will speak Tuesday, February 25 at the Arizona Corporation Commission’s two day workshop on allowing some or all customers to bypass utility service (Docket 18-0405, Modification to Commission’s Retail Electric Competition Rules). AARP opposes so-called retail choice as proposed by two of the Commissioners in the Docket.

“AARP is no stranger to the issue. In the few states that allow it, residential customers have not seen the promised benefits of lower electricity bills,” said AARP State Director Dana Kennedy.

“Indeed, many states that have it are rolling back or trying for reform the marketing rules,” said AARP Advocacy Director Steve Jennings. “New York and Illinois now bar it for low income customers and New York requires the alternative power marketers must demonstrate the offered rate is lower than the utility default rate,” he continued.

“The idea is premature as the ACC staff report even points out,” continued AARP’s Senior Legislative Manager Bill Malcolm, “because Arizona does not have nor does it need a wholesale market.” “Those that do are finding them problematical since they are at odds with their state’s energy policies,” he continued. “Turning over the power grid to a California grid operator or to a Federal regulator is poor public policy and states like Connecticut and Illinois are trying to exit their regional grid operator market”, he said.

“You may not like your local utility much, but you will like your power marketer and grid operator even less,” continued AARP Arizona President Daniel Martinez. “Further, remaining customers on the utility system could be left having to pay the fixed costs of the utility system like Palo Verde. Further, in a fast growing state like Arizona, the restructured market makes it difficult to ensure needed new generation is built.

AARP helped defeat a similar proposal in Nevada two years ago in order to protect consumers from the havoc that deregulation of utility systems could bring.

“With a state average residential electricity rate of 12 cents per kwh (below the national average, on par with other Mountain West states, and far lower than California’s 20 cent rate), it is unclear what problem we are trying to solve”, Kennedy continued.

The ACC hearing begins at 10 a.m. Tuesday and runs for two days. Here is a copy of AARP’s power point.