A Closer Look at Proposition 127
- An initiative backed by a California billionaire would require UniSource Energy Services and most of Arizona’s electric providers to produce half their power from renewable resources by 2030 – more than tripling the state’s current goal.
- UES already is expanding wind and solar power at an ambitious pace without compromising affordable, reliable service.
- We project that Proposition 127 would increase typical UES electric bills by more than $600/year for residential customers and an average of $3,400/year for small commercial customers by 2030.
- The initiative would override the authority of the Arizona Corporation Commission (ACC) and prevent the ACC or other elected officials from making any changes if it proves too costly or threatens reliability.
UES’ Clean Energy Leadership
UES has established itself as an industry leader in wind and solar energy. Nearly 16 percent of our power already comes from such sources, and we’re working toward providing 20 percent of our electricity from renewables by 2020 – exceeding the state’s 2025 requirement of 15 percent.
A critical part of establishing that ambitious goal was determining we can reach it without compromising reliability or affordability. The goal also reflects the capabilities and characteristics of our electric system and our region, as we lack affordable hydropower or geothermal resources that could allow higher levels of renewable power sooner in other places.
These realities haven’t stopped some people from pushing for even more aggressive adoption levels. A group backed by California billionaire Tom Steyer is funding Proposition 127, which would amend the Arizona Constitution to require that UES and other regulated electric utilities get 50 percent of their power from renewable resources by 2030. The requirement would not apply to Salt River Project, Arizona’s second largest electric provider.
Proposition 127 would accelerate the expansion of renewable energy resources in our state. But the initiative, which was created without the input of Arizona’s utilities or their regulators, also would result in significant increases to UES’ electric rates.
Higher Energy Bills
If Proposition 127 were to pass, UES projects that its residential electric bills would increase by more than $600 per year by 2030; the bills of commercial customers would increase by an average of $3,400 per year.
These estimates are based on a detailed comparison between the proposed initiative and our current resource plans. They reflect the cost of replacing energy bought on the wholesale market with new wind and solar energy resources, plus additional backup generators, storage systems and other facilities that would be needed to bolster their reliability.
Another factor that would drive rates higher is a requirement that utilities secure 20 percent of our renewable power from more expensive small, privately owned rooftop solar arrays. Increased subsidies would be needed to achieve such high adoption levels.
Supporters of the initiative often quote low wholesale prices for solar energy in arguing that the measure will save customers money. But those prices do not account for the cost of stabilizing, storing and delivering solar energy, or the need to provide alternate generating resources when the sun isn't shining.
One Size Fits None
Backers of Proposition 127 did not consider how the individual circumstances of each Arizona utility would affect our ability to comply with its requirements. They also did not leave any room for revisions. By locking renewable energy goals into the Arizona Constitution, the measure would limit the ACC’s ability to make adjustments if circumstances or technologies change, or if the rapid adoption of wind and solar power threatens to compromise reliability or affordability.
A Better Way
UniSource Energy Services plans to continue expanding our renewable energy resources at a rapid but reasonable pace that allows us to maintain reliable, affordable service. The ACC, meanwhile, is already discussing updates to Arizona's renewable energy goals that would be developed through a deliberative, inclusive process, not dictated by a ballot measure drafted without any input from Arizona's utilities or our customers.