The Battle for Solar Energy in the Country's Sunniest State

Carolyn Kormann, writing for The New Yorker: Steyer [billionaire Tom Steyer, who for years has tried to pass Proposition 127, an amendment to Arizona's constitution that would require power companies to generate fifty per cent of their electricity from renewable sources by 2030] and his coalition say that the problem is simple: A.P.S. (state's largest utility, Arizona Public Service) is an investor-owned company, motivated primarily by its responsibility to protect profits for its shareholders, many of whom reside out of state. In 2017, the company made four hundred and eighty-eight million dollars, an increase of forty-six million from the previous year. The Arizona Corporation Commission (A.C.C.), a five-member elected 'fourth branch' of state government, is supposed to keep the utility's monopoly in check -- setting limits on capital investments and pricing, while guaranteeing a certain margin of profit. But critics have long argued that the arrangement incentivizes utilities to 'gold-plate,' or make inessential investments. (The phenomenon even has a name: the Averch-Johnson effect.) For A.P.S., a two-hundred-million-dollar gas-fuel plant would be more lucrative than a twenty-million-dollar solar array because the utility can charge higher rates to recoup its investment costs. Kris Mayes, a former Republican A.C.C. commissioner, who helped write the language of Prop 127, told me the Averch-Johnson effect explains why, in 2017, A.P.S. called for more than five thousand megawatts of new natural-gas additions, and almost no utility-scale renewables. 'If they were truly acting in public interest,' Kris Mayes, a former Republican A.C.C. commissioner, said, 'they would not be proposing fifty-four hundred megawatts of new natural-gas plants.'

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