Report: Energy Efficient Arizona

Energy Policy Considerations for the Arizona Corporation Commission

Released by: Arizona PIRG Education Fund

The Arizona Corporation Commission (Commission) was established in 1912 by the Arizona Constitution as a popularly elected body charged with regulating public utilities, corporate filings and securities, and railroad and pipeline safety. Sixteen electric utilities, seven natural gas utilities and more than 350 private water and sewer utilities fall under the purview of the Commission. This fall, Arizona voters will elect two commissioners to the Commission.

The candidates elected in the 2010 election for the Commission will guide Arizona’s energy policy into the future. Arizona now relies primarily on a mixture of inefficient and unclean energy resources. Coal, natural gas, nuclear power and petroleum account for 95 percent of Arizona’s primary energy consumption. Each of these energy resources poses significant economic and environmental risks.

Arizona’s Black Mesa coal field produces approximately 12 million tons of coal per year. Coal is also imported from New Mexico, Colorado and Utah. The U.S. Environmental Protection Agency (U.S. EPA) has identified nine—the second-most in the nation—“high hazard potential” coal waste dumps in Arizona. These are sites at which dam failure would likely cause loss of human life.

Fossil fuel production will require an estimated national expenditure of $23 trillion between 2010 and 2030. Ten percent of household income in Arizona goes to energy purchases, representing a direct transfer of wealth to companies and governments located outside the state and, in many cases, outside the country. Additionally, fossil fuel production has been identified as a cause of rising temperatures, which are predicted to cause decreased precipitation and exacerbate drought conditions in the already arid Southwest.

Palo Verde, the nation’s largest nuclear plant, is located in Arizona. The Palo Verde nuclear plants continued functionality requires uranium mining in Tuba City and Monument Valley and the use of more than 20 billion gallons of water annually for cooling purposes. Nuclear energy is relatively inefficient economically, producing one-fifth of the electricity per dollar than that saved by energy efficiency and three-quarters of the electricity a single solar thermal power plant provides.

Energy Policy Considerations for the Arizona Corporation Commission defines the programs and policies required to facilitate a transition from an energy portfolio dominated by inefficient and nonrenewable resources to one comprised of energy efficient and renewable resources. First, we define energy efficiency, which benefits all sectors of the economy by reducing the amount of energy needed to perform particular tasks. Second, we describe demand response, which promotes efficient energy production and consumption by reducing energy demand during peak production and consumption hours. Third, we explain renewable energy, which is a broad category of energy resources that provide economically stable and environmentally friendly electric power. Last, we discuss transmission, which is the infrastructure required to transport electricity from production to consumption and is deeply intertwined in the transition from non-renewable to renewable energy production.

Energy Policy Considerations for the Arizona Corporation Commission is meant to be a primer, not a comprehensive document. The policy considerations are based on recommendations from energy advocates in Arizona. The appendices provide resources on each of the topics covered in the briefing book and describe the nexus of energy production and water conservation. Additional documents can be found on the Commission’s Web site or directly through the utilities.

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