Proposition 127’s big gamble with state’s economy
The debate over Proposition 127, the renewable energy mandate, has become a duel between economists hurling studies at 10 paces.
The pro Prop. 127 studies claim that it will reduce electricity bills statewide by $4.1 billion from 2020 through 2040 and create 15,810 new jobs by 2030.
The anti Prop. 127 studies assert that it will increase residential rates by $1,900 a year and result in the loss of 304,855 “job years” through 2060.
Here is the weight that voters should put on the studies by the pro side: zero.
And here is the weight voters should put on the studies by the anti side: zero.
I’ve heard renowned economist Irwin Stelzer, now a part-time Phoenician, make what I thought was a great jape and an astute observation: Decimal points are God’s way of prov-
ing that economists have a sense of humor. His point is that the purported precision of economic measurements and prognostications is often laughable.
Proposition 127 would require utilities regulated by the Arizona Corporation Commission to get 50 percent of their power from renewable sources, basically solar and wind, by 2030. They would also have to get 10 percent of their power from distributed renewable sources, basically rooftop panels, by that date. There are interim benchmarks set forth in the constitutional amendment.
Evaluating whether this would be good or bad for the state’s economy and electric consumers requires knowing the following future events: population growth; per capita electricity usage changes; the relative price of fuels; construction costs for future plants, both renewable and nonrenewable; improvements in solar panel energy conversion rates; improvements in solar storage technologies; the continuing availability of subsidies, federal and state, for solar and wind; what grid management investments might be necessary to handle such a large reliance on intermittent power; and what out-ofstate markets might be available to both buy and sell power.
And that’s just a partial list. And all of these things must be accurately predicted not for next year, which no one can do anyway, but for 10 to 20 years from now. It’s a nutty endeavor and a useless debate.
So, if the dueling economists are to be set aside, what’s the best way for voters to think about and evaluate Prop. 127?
The proponents want voters to view it as a statement of support for greater use of renewable sources. But it is far more than that. It is a mandate for a massive increase in the use of renewables in a relatively short period of time for such a monumental shift in energy fuels, just 12 years. There’s a serious question of whether that’s even feasible.
Moreover, the mandate would be embedded in the Arizona Constitution. The corporation commission couldn’t alter or modify the timeline irrespective of the consequences. That would require a vote of the people on another constitutional amendment.
In short, Proposition 127 is a giant shot in the dark.
Electricity rates are an important factor in a state’s economy. Arizona already has electricity rates slightly higher than the national average. Our rates are higher than any neighboring state, except California.
If Proposition 127 is defeated, the issue of increasing the use of renewable energy doesn’t go away. It is moved to the planning processes of the state utilities and the elected members of the corporation commission.
The utilities are biased toward utilityscale solar, which they control, rather than rooftop solar, which they don’t. And members of the commission probably have a more attenuated bias in the same direction.
But no one is really opposed to renewables. If voters think that the utilities need a kick in the butt to do more, the Democrats keep putting up pro-solar teams for the commission, pledged to increase the existing renewable mandate of 15 percent by 2025.
The big difference is that the commission can back off quickly if a mandate proves unworkable or too costly. A constitutional mandate is a much more cumbersome thing to fix.
I believe that Arizona will one day get a majority of its electricity from solar. But I don’t want to bet the state’s economy on that happening by 2030. PLACE YOUR RECRUITMENT AD IN THE LARGEST JOB NETWORK BY CALLING 1-888-262-2149 OR EMAIL PHOENIXJOBS@GANNETT.COM