Arizona utilities maintain support for House-approved bill repealing state’s competition provisions

Two Arizona electric utilities commended recent state House approval of a bipartisan bill that would repeal several provisions of a roughly 20-year-old Arizona law promoting electric generation competition.

The Arizona House on Feb. 23 voted 37-21 to approve House Bill 2101, which would repeal most of the state’s electricity retail competition rules. The bill came around again for a second vote after being amended following a failed House vote on Feb. 14. The measure now awaits action from the Arizona Senate, which is considering its version, Senate Bill 1631.

“We continue to support this bipartisan measure because it protects customers and allows us to keep energy reliable and affordable for customers,” said Mike Philipsen, spokesperson for Phoenix-based Arizona Public Service Company (APS), the state’s largest electric utility and the principal subsidiary of publicly traded S&P 500 member Pinnacle West Capital Corp.

“We are pleased to see that a strong majority in the House supports the bill,” he told Daily Energy Insider in an email.

On the same page is Salt River Project (SRP), a community-based, not-for-profit public power utility and the largest provider of electricity in the greater Phoenix metropolitan area, serving more than one million customers.

“We appreciate the strong bipartisan support for the bill. It reflects the work of a large coalition that includes consumer advocates, chambers of commerce, unions, Chicanos Por La Causa, environmental advocates, agriculture, and small business leaders,” SRP spokesperson Patty Garcia-Likens told Daily Energy Insider. “It’s a recognition of the importance of reliable electric service to Arizona’s residents, business and our booming statewide economy.”

The House-approved bill was introduced in mid-January by State Rep. Gail Griffin (R-14), chair of the House Natural Resources, Energy, and Water Committee, along with 35 co-sponsors from both sides of the aisle. 

If enacted, the bill would repeal or amend more than 20 statutes in an effort to open the door to what bill sponsors say are more innovative ideas around providing customers with choice. Bill opponents, on the other hand, have said the bill could make it more difficult for new energy providers like solar and wind to enter the market. 

According to APS, competition is pretty healthy in the state right now and the utility intends to keep it moving forward. In fact, according to Philipsen, APS has been operating in a period of high competition for more than 10 years.

“Through regulation — not deregulation — utilities like APS are obligated to purchase power from qualifying generation projects, most of them solar plants developed by third parties who want to grow or operate in our state,” he said. “All of the utility-scale and clean resources we build or procure are selected through a competitive bidding process.”

In addition, through regulation that sets pricing for customers who lease or buy their own solar systems, Philipsen said the APS service territory has proven to be competitive for rooftop solar installers. “There is now more than a gigawatt of distributed solar on our system and a healthy, continuous rate of new applications coming in every day,” he said. 

And through other options and programs, APS customers also may choose to buy power through competitive providers operating independently. 

“Importantly, all of this while we hold the obligation to serve all customers throughout our fast-growing territory,” said Philipsen.

If the bill is approved by the Arizona Senate, both APS and SRP acknowledge there will be benefits for their customers.

“Passage of the bill would ensure that Arizona continues to prioritize reliability and consumer protection, instead of allowing the same deregulated model that has failed in other states,” said Philipsen of APS. “HB 2101 protects consumers by keeping their prices low, preserving options they have today, and keeping it clear who is responsible for grid reliability in our state.”

Likewise, SRP’s Garcia-Likens said the bill provides important protections for customers, including prevention of predatory and deceptive marketing and protections for customer information.

“It will also help ensure there is regulatory certainty so that we can continue to provide advanced planning and investments that ensure grid reliability and adequate energy supplies as demand continues to grow over the next decade and utilities transition to carbon-free resources,” said Garcia-Likens.