Arizona, joins West Virginia and Montana in scrapping its mandated target for wind and solar power generation. Referred to as the Renewable Portfolio Standard (RPS), its economic cost naturally outstrips any notional benefit (the only benefit being enjoyed is by wind and solar rent seekers). Finally, legislators are waking up to the scale and scope of the scam and the inevitable economic train wreck that follows. Rent seekers went into their usual state of entitlement driven apoplexy, deploying the usual nonsensical arguments about all the wind and solar jobs that would disappear.
As Mitch Rolling and Isaac Orr point out below, not only is scrapping the RPS necessary to preserve Arizona’s wealth and prosperity, but it makes way for a wholly more efficient way of generating electricity. That is, you can generate magnitudes more power per worker using hydro, natural gas, nuclear and coal than wind and solar, ever will.
The Energy Transition in Retreat: Arizona Moves to Repeal Its Renewable Mandate
Substack
Mitch Rolling and Isaac Orr
23 March 2024
The failures of the “energy transition” are increasingly hard to ignore. It’s not just that the transition is failing to pick up steam; it’s failing in general.
In the regions of the world that have most embraced wind and solar, such as Germany and the United States, in places like California, Texas, and others, it has had disastrous effects on the reliability of the electric grid and put upward pressure on costs.
Luckily for Arizona residents, state regulators have seen the trainwreck unfolding elsewhere and wisely decided to avoid making the same mistakes by moving to repeal the state’s mandate for unreliable wind and solar resources.
Arizona Moves to Repeal Its Renewable Mandate
In a little-reported move, members of the Arizona Corporation Commission (ACC) voted on February 6th, 2024, to initiate a proceeding eliminating the state’s renewable energy mandates, which require regulated utilities like Arizona Public Service (APS) and Tucson Electric Power (TEP) to generate 15 percent of their electricity from renewable sources by 2025.
This measure was approved along a 4-1 party-line vote—ACC Commissioners are elected in Arizona— with Republicans voting to revoke the mandates and the lone Democrat voting to keep them. If the mandates are repealed, Arizona will join West Virginia and Montana in completely repealing its Renewable Portfolio Standard (RPS), according to a database maintained by the National Conference of State Legislators.
Cost Consternation
Arizona’s mandates for wind, solar, and energy efficiency have come under fire from Republican members of the ACC who argue the regulations have cost the state $3.5 billion since they were first implemented in 2006 and no longer provide system benefits, according to Utility Dive.
Commissioner Kevin Thompson, a Republican who voted to repeal the mandates, criticized what he called outdated mandates that involve “incentives and giveaways left and right,” reported a local Arizona news station.
“I welcome utility programs that actually reduce energy consumption and meet avoided costs but not under the threat of commission mandates that can be easily hijacked by financially interested stakeholders.”
According to the Arizona Star, ACC Commissioner Nick Myers noted that he believes “it is time for the Commission to reconsider these rules and mandates that appear to unnecessarily drive up costs.” He continued, saying that “Utilities should select the most cost-effective energy mix to provide reliable and affordable service, without being constrained by government-imposed mandates that make it more expensive for their customers.”
As Isaac noted in his testimony to Ohio and Pennsylvania lawmakers, there is an energy hierarchy of needs where reliability must come first, affordability must come second, and reducing carbon dioxide emissions must come third. It is encouraging that ACC members seem to understand this important order of operations, because when carbon reductions take precedence, either affordability or reliability, or both, start to deteriorate.
Solar Interests Seethe
Unsurprisingly, solar and wind special interest groups were unhappy about the decision.
Autumn Johnson of the Arizona Solar Energy Industries Association said she was unaware of any state repealing its existing renewable portfolio standards entirely, which she credited for boosting the solar energy economy, which employs more than 8,000 Arizonans.
“I worry that being the only state in the country to repeal what is already an extremely modest RPS sends the wrong signal to the industry. It says, ‘Take your business, your jobs, and your dollars elsewhere,’” Johnson said.
Arguments like these are common but as my friend and American Experiment colleague John Phelan (check out his Substack!) often notes, the purpose of the energy industry is to create energy, not create jobs.
According to the U.S. Energy and Jobs Report for Arizona, the electric power generation sector employed 23,898 workers in The Grand Canyon State in 2022. Using the employment data in the report and generation data from the U.S. Energy Information Administration (EIA), we can see that solar currently generates less electricity per job than hydroelectric power, natural gas, nuclear, coal, and wind.
This may shift over time because solar jobs are largely temporary jobs in the installation sector, but as it currently stands, the energy return on each person employed is the lowest for oil-peaking plants, solar, and wind generation.
Green-Plating without a Mandate
The ACC’s decision to repeal the current renewable energy mandates is an important step toward ensuring Arizona has reliable and affordable electricity.
However, regulators will need to exercise eternal vigilance because the largest utilities in Arizona, APS, and TEP, have voluntarily pledged to go carbon-free by 2050, which will accomplish the same end results as having a mandate.
As we have noted previously in our piece Electricity Prices Are Soaring: It’s Time to Hold the “Energy Transition” Accountable, recent filings by APS indicate that its rush to wind and solar is driving up electricity rates:
In this Application, Arizona Public Service Company (APS or Company) seeks a net increase in base rates of $460 million, or 13.6%, to become effective on December 1, 2023. The requested increase is necessary for APS to continue making the investments required to maintain a reliable, resilient, and clean energy grid for its customers today and into the future.
APS explained the company’s situation in more detail:
APS’s last rate case concluded on November 9, 2021, and was based on a test year that ended on June 30, 2019. A variety of factors have changed since the conclusion of APS’s last rate case, including significant investment in plant and infrastructure, revenue and expenses, the cost of capital, customer growth, compounded inflationary pressures, and disruptions to the global supply chain.
Among the items listed for the investments made by the company include infrastructure for EV-charging stations and three new renewable projects.
TEP is also getting in on the action. In its 2023 Integrated Resource Plan, TEP notes that it will retire its remaining coal plants and replace this lost capacity with solar and storage despite the fact that electricity demand is expected to grow in the region:
TEP projects that its peak energy demand will increase from 2,382 megawatts (MW) in 2024 to 2,800 MW in 2038, or 1.23 percent annually. The company also plans to retire its last 892 MW of coal-fired generation during this period with the retirement of Units 1 and 2 at TEP’s Springerville Generating Station (in 2027 and 2032) and Units 4 and 5 at Arizona Public Service’s (APS) Four Corners Generating Station in 2031.
To meet anticipated load growth and capacity lost to future coal plant retirements, TEP plans to secure over 3,970 MW of new resources, including 2,640 MW of new generating capacity and 1,330 MW of new energy storage over the next 15 years.
While 90 percent of the new resource capacity will be sourced from renewable and energy storage projects, TEP anticipates a need to develop 400 MW of new natural gas-fired generation by 2028 in order to maintain reliable and affordable service for our customers.
In essence, TEP is proposing to close down 892 megawatts (MW) of coal capacity by 2032 and replace it with 4,370 MW of solar, battery storage, wind capacity, and natural gas capacity constituting a nearly 5:1 capacity replacement ratio due to its voluntary renewable energy pursuits.
Ultimately, this strategy will leave the grid increasingly reliant upon solar, battery storage, and wind to meet peak demand and its planning reserve margin, which is the same strategy employed by California to unenviable results.
Conclusion
The ACC’s decision to begin proceedings repealing Arizona’s mandates for wind and solar is a commendable first step toward protecting ratepayers from rising prices and preserving grid reliability, and lawmakers around the country should follow suit.
However, the gesture risks becoming purely symbolic if the ACC still allows utilities to retire reliable assets and build five times as much solar, storage, wind, and natural gas capacity to replace them.
Coupling laws to repeal wind and solar mandates with our Only Pay for What You Get legislation, however, could provide the one-two punch needed to balance the playing field, protect ratepayers from soaring prices, and create better alignment between utilities’ incentives and the customers they serve.
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STOP THESE THINGS 
If the Public Utilities Commission denied the rate increases, forcing solar and wind to stand on their own two feet, and insisted that solar and wind scammers pay for their own transmission to get electricity from behind the back of nowhere to the places it’s actually needed instead of foisting this onto the system operator, APS and TEP would probably start singing a different tune.