PHOENIX — Arizona voters will decide in November whether to keep Republicans in power at the immensely influential Arizona Corporation Commission after two years of rate hikes, deregulation measures, and unresolved ethical complaints.
The five elected commissioners oversee utility rates of for-profit companies like APS, Tucson Electric Power and Southwest Gas. They also regulate water companies.
Three of five seats are up for grabs, with one incumbent hoping to return to office.
Current Republican majority has consistently voted against consumer agency
During two recent debates, the three Republican candidates defended the current Commission’s mostly pro-utility votes, while the three Democrats called for a re-commitment of renewable energy policies that the current commission has moved away from.
Democrats also questioned Republicans’ loyalty to consumers.
“Our state constitution defines the role of Commissioners to get the best deal possible for our ratepayers, for Arizonans,” said candidate Ylenia Aguilar (D). “That is not happening under the current Corporation Commission.”
It is significant that a former chair of the Commission, Republican Bob Burns, openly questioned last year whether current Republican Commissioners are “captured” by the for-profit utilities they regulate. Last year Burns said their handling of ethical complaints and their votes on key cases suggested “a practice of being captured” by utilities.
Burns is not the only critic. 12News analyzed seven of the most significant votes by Republican Commissioners over the past two years involving rates and fees of for-profit utilities. The state agency delegated to represent the interests of consumers, RUCO, opposed all seven of those decisions. In one of them - the recent APS rate hike - the Commission approved rates three times higher than what RUCO recommended.
Democrats critical of rate hikes
“The Commission simply is not working for Arizonans,” said Jonathon Hill, one of three Democrats running. Hill has master’s degrees in geological sciences and aerospace engineering. He worked as a scientist at ASU’s Mars Space Flight Facility.
“What I hope to bring is the technical expertise to ask the utilities the hard questions and make them accountable to Arizona voters,” Hill said.
According to federal data compiled by consumer advocate Abhay Padgaonkar, Arizona households paid the 12th highest electricity price in 2022. Since then, the Commission approved new fees and rate hikes, in part to recover higher gas costs absorbed by utilities. Two of the rate hikes are in dispute. UniSource customers filed a formal complaint demanding a rate case rehearing after experiencing bill shock.
According to Padgaonkar, electric utilities regulated by the Commission are now 29-37% more expensive than rates of a neighboring nonprofit utility, SRP. A comparison of APS with SRP in 2022 showed the cost difference at that time was 24%. While such comparisons are imperfect, they show a widening gap between the for-profit utilities and the nonprofit.
Incumbent Lea Marquez Peterson (R) defends the Commission’s rate hikes, citing growing energy demands and economic inflation after the pandemic.
“We as an existing Commission have fought for affordable rates,” Marquez Peterson said. “I know families are struggling. I’m running to make sure we have continuing reliability and affordable rates.” Marquez Peterson has a master’s degree in business administration and served as President of the Tucson Hispanic Chamber of Commerce. She was appointed to the Commission in 2019 and won her first full term in 2020.
New Commission will decide future of renewable energy policies
The next Commission also faces key decisions about green energy policies that the current Commission is dismantling. For example, while most states are expanding energy efficiency and renewable standards, in February the ACC became the only state regulatory body at the time to kill its standards. Republican Commissioners said the standards were outdated and overly burdensome. The Commission’s lone Democrat, Ana Tovar, called the vote “horrendous.”
During a debate last week, Republican candidate Rachel Walden applauded the Commission’s repeal and has indicated she will continue a hands-off approach if elected.
“We don’t want to make mandates. We don’t want to be a fourth branch of government,” Walden said. “What we’ve seen in our rates is the result of forced mandates, forced contracts.”
Walden serves on the Mesa School Board and has a Bachelor of Science degree from ASU. She previously worked in finance.
Controversial fee for rooftop solar customers
The Commission also voted in the APS rate case to attach a first-of-its-kind “interconnect” fee to rooftop solar customers. That fee is now the subject of an appeal. Solar advocates argue it’s unjustified.
“Arizona voters have an opportunity to have energy independence and energy security in their own homes. Do you want a Corporation Commission that’s going to get into your bill and force you to pay interconnect fees to subsidize the profits of APS and TEP? That’s just not right,” said candidate Joshua Polacheck (D). Polacheck is has a Master’s in Public Administration and worked in international diplomacy. He was the Executive Director of the Pima County Democratic Party.
Solar industry has taken a hit from Commission votes
The Commission also voted last year to re-evaluate rooftop solar export rates. Those rates provide stability in the solar industry, allowing customers surety of future rates if they invest their own money in rooftop solar panels. 30 stakeholders over three years collaborated to create the price structure now in place. But the fate of the program is now unclear. A representative of the solar industry in Arizona says there has already been a significant drop in home solar installations over the past year since the Commission voted to re-visit the program.
The three Democrats running emphasize the cost-effectiveness of solar energy. Over the past decade, solar products have fallen more than 90%.
“We should benefit from producing energy in our own backyards. We know that expansion of renewables such as solar and wind will put Arizona as the green leaders are meant to be,” said Aguilar (D). “Renewable standards provide a baseline. They encourage utilities to invest in these technologies and I think incentivizing them is critical.”
Aguilar is an environmental consultant for rural, tribal and school communities. She serves on the Osborn School Board and the Central Arizona Water Conservation District.
Republican candidate Rene Lopez joined Marquez Peterson and Walden in opposing future renewable energy standards.
“We all are here for the ratepayer, but we should not pigeonhole ourselves to one decision, one path,” Lopez said. Lopez is a Navy Veteran with a degree in nuclear engineering. He worked for an oil and gas company and served on the Chandler City Council.
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