Independent power backers argue for Arizona deregulation

Arizonans for Electric Choice & Competition (AECC) members, Direct Energy, Noble Americas Energy Solutions and Constellation NewEnergy have filed joint reply comments with the Arizona Corporation Commission (ACC) urging the opening of Arizona’s electricity markets to competitive suppliers.

Currently, the commission is deliberating about the re–opening of competitive electricity markets in the state, AECC noted in an Aug 19 statement. In competitive markets, power suppliers compete against each other to provide the best possible service at the lowest possible cost. As a result, customers, both residential and commercial, are afforded the opportunity to shop for the best electricity price, the competition group said.

“Competition is working well in 17 other states, including in neighboring Texas, and now it’s Arizona’s turn,” said Greg Gienko, CEO of Meridian West Development LLC based in Phoenix. “By having more options and services to choose from, we’ll be able to better manage our electricity costs, which will allow us to do things like expand our operations, hire more employees and ultimately offer our own products and services at lower costs to our customers. The bottom line is that the benefits of competition are long overdue in Arizona.”

“As the discussion around opening Arizona’s electricity market intensifies, many are busy crying wolf over how competition will impact the state, primarily the incumbent utilities,” said Greg Bass, Director of Western Regulatory Affairs, Noble Solutions. “The comments we filed with the ACC last week clearly articulate competition’s value based on the facts and the experience of over a decade of retail choice in other states. We look forward to participating in a regulatory process that separates truth from fiction, one which we are confident will lead to the opening of the state’s electricity market to retail competition.”

A J.D. Power & Associates survey of electricity customers in Texas, where many consumers are free to choose their energy company, found that customer satisfaction in the competitive Texas electricity market is at an all time high, AECC said. In addition, customers who participate in the competitive Texas market are more satisfied with their electricity prices than customers in regulated utilities operated by cities or co-ops.

AECC is a diverse group of Arizona opinion leaders serving as a voice for consumers and businesses in favor of opening the state’s electricity markets to competition.

Citing longstanding benefits of reliability, affordability and accountability in the current system, Arizona Public Service told the commission that deregulation would create uncertainty in the electricity delivery system. APS, along with other stakeholders, was asked to provide information as the ACC reviews whether it should actively consider the possibility of changing the way Arizona customers receive their electric service with a move to a deregulated market, the utility noted in a July 19 statement.

APS recently put a hold on its planned buy from Southern California Edison of part of the coal-fired Four Corners power plant when the commission in May indicated it wanted to look at the merits of deregulation.

In its filing, APS said:

  • Arizona’s electricity rates are below market. Electricity rates in the state are lower than the national average and are lower than rates in nearly all deregulated states, according to the U.S. Energy Information Administration.
  • APS  ranks in the top quartile for keeping the power on and minimizing unexpected outages.
  • In 2013, APS ranked fifth out of 54 large investor-owned utilities for customer satisfaction by J.D. Power & Associates, an independent market research company.
  • APS keeps jobs and tax payments in Arizona. APS employs 6,500 and is the state’s largest taxpayer, paying state and local taxes surpassing $500m. With deregulation, these jobs and taxes may go to companies located in other states.
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.