Study sees loss of jobs if renewable energy mandate OK’d

PHOENIX — A study financed by Arizona’s largest electric company predicts a loss of jobs and disposable income if voters require utilities to get half their energy from renewable sources by 2030.

Timothy James, a research professor at the W.P. Carey School of Business at Arizona State University, predicted Monday that there would be up to 501,000 “job years of employment’’ lost by 2060 if the ballot measure becomes law. He also figures a $3.5 billion in lost state taxes and $2.3 billion in local taxes.

But those numbers are inflated, as they are based over a 43-year period. And they presume the study’s assumptions about higher costs and fewer people needed to generate power.

And James, whose study was financed by Arizona Public Service Co. which already is campaigning against the renewable energy mandate, said he also is basing his numbers on the premise that APS would shutter the Palo Verde Nuclear Generating Station and fire all the employees there, even though the initiative would to allow half of all electricity to come from non-renewable sources like nuclear.

Initiative organizers said they need more information about other assumptions used by James to reach his conclusions before commenting.

But they cited a study by another ASU researcher who said states that have enacted renewable energy requirements between 2005 and 2012 have had “no correlated rate increase.’’ Wesley Herche, who works at the same Global Institute of Sustainability at ASU as does James, said renewable technologies have become “so cheap recently.’’

Herche told Capitol Media Services his own study should not be read as a direct contradiction to what James has found, saying his was based on historical data versus projections made by James based on certain assumptions.

But Herche said that his data was subject to “peer review,’’ while the new report commissioned by APS was not. It also used a non-public “proprietary model’’ subject to “custom modifications’’ to reach its conclusions, making it opaque to actual independent analysis.

What makes all this critical is that James’ findings that there will be higher electricity rates leads to his conclusion that people will have less money to spend on other things that help drive the economy. More to the point, what voters believe will happen could decide whether they support the initiative if it makes the November ballot.

James told Capitol Media Services that his conclusions about higher costs make sense on a basic economic level.

“If renewables and distributed generation ... were such a silver bullet which would kill the environment problem and simultaneously create thousands if not hundreds of thousands of jobs, why isn’t everybody just doing it?’’ he asked. “And the answer to that question is, it’s just more expensive.’’

Put another way, he said, “the free market would not be doing this.’’

What that means, James said, is the state and its voters have to decide if the environmental trade-offs are worth what he predicted will be additional costs, both to individual consumers and the Arizona economy as a whole.

“Personally, I’m fine with paying more for pow- er if we’re not polluting,’’ he said. But James said the key is that people “know what they’re voting for.’’

At the heart of James’ conclusions about costs are some key assumptions — and questions of timing.

“There would be for six or seven years a big investment program in renewables if we went ahead with it,’’ James said. “That would generate a lot of new jobs, different jobs.’’

But once these are built and in place, he said it doesn’t take a lot of people to run these wind and solar power plants.

“They just operate on their own pretty much,’’ James said. “So within the industry itself, it’s swapping slightly more job-intensive technology for less job-intensive technology.’’

Only thing is, he said the cost of all that investment has to be built in to the cost of the energy, even if the electrons themselves are relatively cheap.

And there’s something else.

James said no one ever goes entirely “off the grid.’’ So even if everyone were to invest in rooftop solar and generate their own power, their peak demand does not match up with the peak generating periods.

And then there’s the question of what happens if there’s a week of cloudy weather.

Those same customers, he said, will want the utilities to provide them with electricity. And that, in turn, means the companies need to keep operating the power plants if for no other reason than as a backup.

James said, though, that if battery technology improves, that ability to store excess power generated on sunny and windy days would mitigate the need to have those other power plants operating and available.