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If you have recently paid utility bills — even if you didn’t believe my past warnings about the Arizona Corporation Commission favoring monopoly interests over yours — you certainly know that your elected commissioners aren’t on your side.
The commission is required by the Arizona Constitution to set just and reasonable rates. But it has repeatedly sided with the monopolies they regulate — Arizona Public Service (APS), Tucson Electric Power (TEP), UniSource Energy Service (UNS) and Southwest Gas — to make Arizona’s energy prices among the highest in the nation.
Worse yet, the commission continues to gaslight Arizonans about it.
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Gaslighting affordability and lower cost
The commission’s chairman justified the anti-consumer policies by claiming, “I am proud that Arizona has the second most affordable energy in all of the U.S.”
Although WalletHub’s state rankings were debunked as critically flawed, the commission continues to gaslight affordability by hyping clickbait headlines, and it still has the misleading news release on its website.
The truth? Highly trusted federal data shows that Arizona had the 7th highest total energy price, with residential price being the 12th highest in 2022.
Since then, energy prices in Arizona have soared further with across-the-board rate hikes. Although Arizona’s residential natural gas price was already the 8th highest in the nation, Southwest Gas is back at the trough asking for another 12% increase.
In 2023, the three commission-regulated electric utilities (APS, TEP and UNS) charged a total price 28% higher than SRP, which the commission does not regulate. The corporate greed of investor-owned monopolies is costing Arizonans over $1 billion extra annually.
This year, the three regulated utilities have charged Arizonans a higher price than the average price in 38 contiguous states and far more compared to every Western state except California — 52% more than neighboring New Mexico and 59% more than Utah. And, yet, the commission has continued to issue misleading statements about cost-effective energy in Arizona.
The commission has absurdly claimed that higher bills are better because they have “lowered the cost to ratepayers.” However, when I asked for evidence of lowered cost, the commission spokesperson wrote: “I cannot answer these questions on behalf of the Commission” and referred me to the utilities and credit rating agencies.
Regulatory consultants like RRA sell fee-based research by assessing state-level risk for utility investors. They praise state regulators who jack up prices on captive ratepayers. Touting high rankings from them, as this commission has repeatedly done, is like celebrating when the opposing team scores a touchdown.
Gaslighting solar subsidy while ignoring data center hypergrowth
Because of highly effective programs like rooftop solar and energy efficiency, utilities have less need to build new power plants and raise everyone’s rates.
Thanks to these programs, average household usage in the APS territory decreased by 2% over the past decade — despite increasingly extreme summers. And, amazingly, Arizona’s residents had the fourth-lowest per capita adjusted energy consumption in the nation.
That’s because solar rooftops, self-financed by the homeowners in Arizona, collectively generated 3.8 million MWh in 2023, thus bringing electricity worth half a billion dollars in market value to the power grid — the equivalent of Arizona’s fourth largest “utility.”
The for-profit utilities hate these programs because they cut into their guaranteed profits. So the commission voted to kill energy efficiency and renewable energy standards, slapped a new surcharge on rooftop solar owners, and began the process of eliminating the Value of Solar program.
The commission also succumbed to approving another surcharge — this time allowing utilities to charge for future growth, ignoring the Arizona attorney general’s warning that the mechanism is unlawful.
Worse yet, the commission has ignored the real culprit behind the hypergrowth: the uncontrolled proliferation of noisy, power-hungry data centers. These 24/7, extra-high-load monstrosities are draining the power grid and can increase household energy bills while negatively affecting environmental quality.
A 1,000 MW data center is like adding a thousand large grocery stores, making data centers music to the ears of for-profit utilities. APS charges residential customers three times more than what they charge data centers.
The commission has ignored the data center elephant in the room that is spiraling out of control, threatening the power grid’s reliability and driving an extraordinary rise in electricity bills.
It is high time the Arizona Corporation Commission changed its anti-consumer stance and stopped gaslighting captive ratepayers.
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