Tim Steller's column: Arizona's utility regulators should embrace clean-energy mandates

In the last 485 million years, there has only been one period when Earth’s temperature rose nearly as fast as it is rising now.

That happened about 250 million years ago. It produced the End-Permian Extinction, also known as the “Great Dying,” when about 90 percent of the species on Earth died off.

The temperature rose so fast, due apparently to volcanic eruptions and the release of carbon dioxide, that the evolution of most of Earth’s life couldn’t keep up with the speed of Earth’s heating.

“The rate of warming right now is faster than anything we know about, even faster than 250 million years ago,” said Prof. Jessica Tierney, a University of Arizona paleoclimatologist who helped lead the study that charted Earth’s temperature over all those millennia.

Atmospheric carbon dioxide is the “master dial” of Earth’s temperature, Tierney said: When carbon dioxide is up, Earth’s temperature goes up, and when carbon dioxide is down, Earth’s temperature goes down.

Arizona’s utility regulators have one finger among many on that master dial. The five members of the Arizona Corporation Commission can decide if we in Arizona are going to contribute more or less to the surge of carbon dioxide going into Earth’s atmosphere, now putting us on a pace for another possible mass extinction.

But nobody seemed too conscious of the Great Dying when they discussed a renewable-energy mandate at the Aug. 14 Arizona Corporation Commission meeting. This 20-year-old rule required Arizona’s regulated utilities to generate at least 15 percent of their energy from renewable sources by this year, 2025, a small percentage in retrospect.

They could have considered a new, higher mandate, but in 2023, the commission rejected the idea of requiring regulated utilities to get all their energy from renewables by 2050, or even by 2070. They turned against the idea of such mandates altogether.

The politics of the moment

On Aug. 14, three concepts dominated the commission members’ conversation: Affordability, reliability and free markets. Not the threat of climate disaster. In ignoring the climate implications of their decision to start eliminating clean-energy mandates, they reflected the nihilistic politics of the moment.

All five members of the Arizona Corporation Commission belong to Pres. Donald Trump’s party, the GOP. And Trump has set the tone when it comes to renewable energy — it is “THE SCAM OF THE CENTURY,“ in his distorted view, expressed online Wednesday.

What he wants is a return to carbon-dioxide emitting fossil fuels, an industry that — coincidentally, I’m sure — donated generously to his campaign. They quickly reaped the reward. On his first day in office, Trump issued an executive order that attempted to destroy federal efforts at climate-change mitigation, while opening federal lands to greater energy exploitation.

On April 8, Trump issued an executive order on “Reinvigorating America’s Beautiful Clean Coal Industry” that encouraged further exploitation of coal on federal lands and use of it to power data centers, despite the fact that there is no such thing as clean coal.

On July 4, came the real triumph for the carbon-dioxide spewers: The Big Beautiful Bill contains billions in giveaways to the fossil-fuel industry, including reducing the royalties the industry must pay for mining and exploitation on federal lands.

The bill also is ending tax incentives for renewable energy development, included in the 2022 Inflation Reduction Act, that were spurring blue-collar jobs and clean-energy growth around the United States.

The pathological hatred of renewable energy goes so deep that the Trump administration, on Friday, ordered a halt to construction of a wind-energy project that was largely complete off of Rhode Island’s shore. When complete, it would produce enough energy to power about 350,000 homes.

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The federal energy policy is, in short, a nihilistic climate disaster, spurring the carbon-dioxide companies to pollute more, faster. And Arizona’s Corporation Commission is stepping in line.

Arizona utilities are regulated

Commissioners such as Tucson’s Lea Marquez Peterson put their decision in the language of the free market.

“I hear from lobbyists frequently that today solar is one of the cheapest sources of energy,” Marquez-Peterson said at the Aug. 14 meeting. “That’s exactly why I support the elimination of a subsidy today. Based upon market demands and the low cost of solar, I believe that renewable energy will continue to thrive in Arizona.”

But the fact is, Arizona’s utilities do not operate in a free market. Here, the regulated utilities, like Tucson Electric Power and Arizona Public Service, are monopolies in their service areas. They are guaranteed returns for their investors in the range of 10% by the decisions of the corporation commission.

They make back the cost of every plant they build, plus profit. It is a system that incentivizes building expensive infrastructure such as power plants.

It’s very different here than in Texas, which has its own grid and a real competitive system for buying power. As a result, wind and solar power have boomed there.

In 2022 alone, a year of high natural-gas prices due to Russia’s invasion of Ukraine, renewables reduced Texas wholesale energy costs by $11 billion, concluded Joshua Rhodes, a research scientist at the University of Texas who is writing a new report on more recent impacts. The savings then were about $200 per household over five years.

In a monopoly market like ours, he said Friday, mandates may be necessary to expand renewables because utilities have existing infrastructure they want to pay off.

“Say they buy an asset that turns out not to be competitive or the most efficient,” Rhodes said. “They’re probably going to utilize that asset for its expected lifetime even though there are more efficient ways of doing things, because there are sunk costs.”

Mandates make progress

Without a competitive market in Arizona, we can’t be guaranteed that the cheapest energy source will be used. So, mandates and pledges to use more renewables have been important to the progress we’ve made.

Even Marquez Peterson indirectly acknowledged the importance of such pledges in bringing renewables to market when she noted that many Big Tech companies are looking to place facilities in Arizona.

“Most of them, like Microsoft, Google and Amazon, have their own ambitious clean energy goals and are requesting clean energy generation sources, which influence the energy portfolio of the future for our regulated utilities,” she said.

Our utilities, too, have had such goals. Tucson Electric Power has committed to retiring its coal-burning plants by 2032 and to get more than 70% of its power from solar and wind by 2035.

Arizona Public Service, the state’s largest utility, also had a commitment of its own: To get 100% of its power from zero-carbon sources by 2050, and 65% from renewable sources by 2030. On Aug. 6, the company’s CEO said the company is abandoning that pledge in favor of a vaguer commitment to be “carbon-neutral” by 2050.

While TEP’s staying on course is commendable, none of these pledges is, of course, enforceable. Mandates are. And as a body regulating monopoly utilities, the corporation commission should not pretend it is overseeing a free market. It should regulate them, considering long-term threats along with short-term costs and benefits.

After all, they have a finger on the master dial and can turn down Arizona’s carbon-dioxide emissions, helping a bit to slow the dangerous heating of the planet.