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Bill to eliminate electric competition law considered

Posted at 7:40 PM, Jan 21, 2022

PHOENIX — For more than two decades, Arizona regulators, utilities, and courts have gone back and forth about whether ratepayers should be able to choose their own electricity provider. Now a bill being considered by the Arizona Legislature could quash the possibility once and for all.

House Bill 2101 would repeal the Arizona law that allows for electric retail competition.

In a statement to ABC15 Salt River Project (SRP), which is backing the bill, said it would remove "uncertainty in Arizona energy markets and allows utilities to continue to invest in renewable resources necessary to transition to Arizona’s energy future."

But opponents of the bill do not agree.

"I think this bill serves to make sure no one else can play in the existing utility sandboxes," said Autumn Johnson, CEO of Tierra Strategy which lobbies for environmental causes. "They want to make sure that no one else infringes on their service territory, and no one takes their customers away."

Johnson said the legislation is in reaction to Texas-based Green Mountain Energy's August 2021 application to the ACC to begin selling what they claim are 100% renewable energy plans to customers in Arizona Public Service (APS) and Tucson Electric Power's service areas.

"This bill seeks to prevent that from being able to go forward," Johnson said.

Ratepayers in SRP's service territory, which is not regulated by the ACC, would not be up for grabs in a competitive market. But that company's fate is closely intertwined with regulated entities because they share responsibility for the electric grid that crisscrosses Arizona.

The original measure signed into law in 1998, allowed for a phasing in of the competitive market to have been completed by the end of 2000.

Legal challenges and disagreement within the Arizona Corporation Commission, the elected 5-member regulatory board for investor-owned utilities, have kept viable rules for the competition from ever being implemented.

Since it first passed, a lot has changed. California's competitive market collapsed in the early 2000s and the February 2021 freeze in Texas has caused people to question the market in that state. And opponents of competition often cite regulators' inability to prevent consumer fraud in a market with dozens of electric utilities.

In a statement, APS told ABC15 it "enthusiastically supports Rep. Gail Griffin's bi-partisan measure that protects consumers, keeps prices low, and ensures grid reliability."

What Johnson is most concerned about is how quickly utilities decarbonize their operations, and she believes the threat of competition would speed things along.

"Our major utilities have continued to do things the same way they've done them for more than 100 years. And it's a very risk averse, very slow to change system," Johnson said. "I worry that unless there's pressure put on the utilities from the outside, whether that be policymakers or the market, we are never going to meet our climate change mitigation goals."