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Biden’s climate agenda and what it will mean for Arizona

Joe Pitts — Wed, 17 Feb 2021 17:30:21 +0000

On January 20th, 2021, Former Vice President and U.S. Senator Joseph R. Biden Jr. was sworn in as the 46th President of the United States of America. Having campaigned on a strong environmental platform that championed a national transition towards renewable energy, an American commitment to reducing greenhouse gas emissions, and a federal strategy focused on confronting climate change, many are curious how much Biden can accomplish in office.

Following his inauguration, the new White House website listed “Climate” as one of the president’s immediate priorities: “President Biden will take swift action to tackle the climate emergency. The Biden Administration will ensure we meet the demands of science, while empowering American workers and businesses to lead a clean energy revolution.”

The President campaigned on using the Green New Deal as a for federal climate action, achieving net-zero economy-wide greenhouse gas emissions by 2050 (with the energy sector achieving net-zero emissions by 2035), and investing heavily in new clean energy infrastructure. While he is sure to face roadblocks from a divided Senate and a razor-thin majority in the House, some of his policy ambitions will come to fruition.

As one of his first acts as commander-in-chief, Biden mandating that all new leases for energy projects on public lands be blocked, and that existing energy projects on public lands face review. While the details of the specifics remain murky, clarification from the Department of the Interior is expected in the near future.

Net-zero emissions by 2050

Following the majority Republican Arizona Corporation Commission’s vote to mandate net-zero carbon emissions by 2050, Biden’s of net-zero energy sector emissions by 2035 seems to be far more ambitious. The question here is how will the White House, the federal government, and the state government achieve this goal? And what will the federal government and state government be willing to compromise on?

The Corporation Commission is setting gradual benchmarks for state utilities from now through 2050. Here is a quick graphic describing the benchmarks being set, which are part of a that goes in depth regarding these new rules.

Crucially, Arizona’s plan includes nuclear power as a carbon-free source of energy, which is particularly important because more than half of all power generated in the state originates from Palo Verde Nuclear Generating Station. The plant provides carbon free energy for up to 4 million people annually.

The Biden Administration is expected to leverage its power to push other states without such mandates towards them. But progressive activists lobbying the 46th President are aiming to eliminate nuclear power and natural gas from the strategy, which would make the 2050 goal, not to mention the 2035 goal, much more difficult to attain.

Public investment

Biden’s main avenue for reducing emissions is spending big on overhauling America’s electrical grid, power generation infrastructure, battery storage, and research and innovation. His plan $1 trillion on “renewable-energy tax credits, energy-efficiency upgrades, loan guarantees for certain solar and wind projects, and more.”

He has some specific for this investment as well:

Facilitate the construction of 1,500,000 “sustainable homes and housing units”;
“Upgrade 4 million buildings and weatherize 2 million homes over 4 years…”;
“Create jobs in climate-smart agriculture, resilience, and conservation, including 250,000 jobs plugging abandoned oil and natural gas wells…”;
Revitalize the domestic auto industry by creating 1,000,000 new jobs.

While the direct avenues of investment remain hazy, they would include direct fiscal stimulus — spending, tax incentives, and “green bonds” — as well as partnerships with industry that promote “upskilling” workers and modernizing the American economy.

Interestingly, this agenda is broadly domestic in focus. While the Biden Administration mentions international engagement, it focuses primarily on policy changes the United States can make within its own borders. Despite the vast differences between Biden and his predecessor, the last Administration’s emphasis on American jobs and prosperity has carried over to the White House’s new inhabitants as well.

Arizona’s expanding economic outlook, which is fueled by a growing population and a booming jobs market, would benefit greatly from such investments in good-paying careers, but such investments may come at the expense of higher taxes on working- and middle-class Arizonans and unsustainable deficit spending

Research and development

Biden has to spend $300 billion on research and development, specifically on electric vehicle technology, artificial intelligence, and materials used to construct more 5G tech. The president’s focus on promoting “Made in America” products and bringing supply chains and jobs to the United States serves as the foundation for these planned investments.

Arizona has seen a surge in business growth in recent years, including significant expansion of its advanced manufacturing and tech sectors. In fact, metro Phoenix’s industrial market “its largest amount of net absorption in history during 2020.” Such public investments from the federal government would likely benefit Arizona through upscaling infrastructure, expanding these burgeoning industries, and promoting innovation within the state.

Support for nuclear power generation

Nuclear power is notoriously capital intensive, with each generating station taking years to construct and billions of dollars in investment. That’s why federal policy regarding the issuance of nuclear power permits, regulation on power generation, and defining “clean energy” in climate plans as inclusive to nuclear power is vital to its sustained operation and possible expansion.

Biden has signalled willingness to continue Trump’s broadly pro-nuclear federal approach. In fact, Biden’s “has included proposals for a new generation of nuclear reactors in his clean energy platform, parting ways with ‘no-nuke’ progressives further to his left.”

Regulatory expansion

Biden’s Administration has struck a remarkably positive tone on climate policy, but he also campaigned on expanding regulations and federal mandates to clamp down on greenhouse gas emissions.

On his first day in office, Biden halted the Keystone XL Pipeline project that had been on hold under President Obama and restarted under President Trump. Canadian Prime Minister Justin Trudeau criticized the move, claiming that the project would create jobs, enhance the American-Canadian relationship, ease a transition towards a carbon-neutral economy, and provide a safer and more efficient means to transport energy across Canada and the United States.

Biden also plans to expand federal regulation on environmental matters, leveraging the Environmental Protection Agency. He also has expressed interest in placing a tax on carbon, which business groups have become towards over the past four years. Biden aims to strengthen fuel emissions standards, likely accelerating the United States’ adoption of electric automobiles.

Arizona is home to several alternative fuel vehicle manufacturers such as and , meaning that an expansion of the electric auto sector would likely benefit these operations.

Should Congress come to an agreement with the White House on carbon pricing, prices on many items are projected to increase. The nonpartisan Tax Policy Center that a hypothetical “tax of $40 per ton would add about 36 cents to the price of a gallon of gasoline, for example, or about 2 cents to the average price of a kilowatt-hour of electricity.” This could raise utility rates for Arizona ratepayers and prices on certain goods.

There are many derivations of proposed federal carbon tax policies, however, and have endorsed the concept of carbon dividends. Such a policy would distribute funds lost from carbon pricing directly to American families, hypothetically that “[a]bout two-thirds of Americans will receive more in Dividends than they will pay in higher prices.”

Regardless of Biden’s success in passing such policies, regulations are sure to tighten federally. Their impact on Arizona’s economy and quality of life are up for debate, and lawmakers, policy minds, and leaders in the private sector are preparing for an expansion of the federal regulatory approach.

Corporation Commission powers

As Arizona lawmakers convene for their annual session, two bills aim to curtail the powers of the Corporation Commission.

HB 2248 and SB 1175, sponsored by House and Senate Republicans who hold the majority in both houses, would prohibit the Corporation Commission from regulating critical electric generation sources. These are defined as “any resource used or acquired by a public service corporation, including solar, wind, biomass, geothermal, nuclear, hydroelectric, fuel-cell technology, natural gas or coal or any other petroleum fuel source.”

The passage of such bills would complicate the Biden Administration’s approach to achieving energy sector carbon neutrality.

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New report sees Arizona leading the way on clean energy

Joe Pitts — Wed, 30 Dec 2020 18:18:56 +0000

A new report released by The Western Way, an environmental advocacy organization, and the Arizona Technology Council reveals that Arizona is on track to continue building on its booming carbon-free energy sector.

Beyond recording Arizona’s progress to this point, the report outlines recommendations that the groups hope lawmakers and policymakers will implement in order to “incorporat[e] the energy innovation sector into Arizona’s economic recovery plan.”

According to the report authors, the innovation sector at-large is the most significant nexus between good business and good environmental stewardship.

Easing the adoption of clean energy

The report advocates for state government and local governments to enact certain policies that allow Arizonans to use clean energy more easily and to promote conservation.

The report sees the Arizona Corporation Commission in an integral position to allow for further adoption of clean energy across Arizona. The Commission recently adopted an ambitious Energy Rules package that included “an updated energy efficiency standard that by 2030 would require utilities to implement energy efficiency measures equivalent to 35 percent of their 2020 peak demand.”

In order to make this change actionable, the authors call for the adoption of the new Energy Rules package as part of a formal rulemaking process.

The authors advocate for the Legislature to allow local governments to “offer Property Assessed Clean Energy (PACE) financing,” which would permit Arizona residents and job creators to finance renewable power, energy efficiency, and water management for low costs in the long-term.

Height and setback restrictions often increase clean energy prices because of how areas factor rooftop solar panels and wind power systems into a building’s height. Acknowledging that many of these restrictions are warranted, the authors also say that “those regulatory requirements should not be inadvertently discouraging more widespread adoption of renewable energy technology.” The report recommends that state legislators work with localities to roll back some of these regulations.

The report also calls for renewable energy storage to be exempt from the transaction privilege tax (TPT) which already exempts clean energy. This will eliminate one of the regulatory barriers to energy storage, which is particularly relevant to solar energy, which requires large storage capacities.

Emphasizing role of public-private cooperation

As has been on during the COVID-19 pandemic, public-private partnerships are central to American and international responses to large-scale challenges. The same is true, according to the report, for clean energy.

To facilitate the expanding electric vehicle (EV) industry, the authors recommend lawmakers invest in EV charging stations “across the state.” Such a policy would make it much easier for consumers to purchase EVs, as they would not have to worry about charging as much as before, and would promote companies like Nikola Motors and Lucid Motors who have recently built up a presence in Arizona.

More broadly the report supports infrastructure investment and the dedication of further federal and state funds to public infrastructure. It also advocates for the utilization of public-private partnerships “to find new and innovative kinds of efficiencies.”

Integrating hydrogen power

Arizona is well-known for Palo Verde Generating Station, the largest carbon-free energy plant in America, as well as its expansive solar fields. But this report argues that hydrogen power is often neglected, and to the detriment of Arizonans.

Hydrogen power is carbon free as well, prompting the authors to urge lawmakers to “support investment in renewable hydrogen infrastructure and the transition of commercial fleets to cleaner fuels.”

Among its suggested reforms are the creation of a “Hydrogen Investment Capital Special Fund,” which would accelerate investment and extension of Arizona’s Renewable Energy Production Tax Credit, including hydrogen in the mix of covered energy sources.

Advanced manufacturing’s pivotal role

Viewing innovation as the key to market-based renewable energy solutions, the report advocates for legislators taking another look at 2019’s Arizona House Bill 2657, which would establish a “Technology and Innovation Workforce Fund.”

Recognizing the massive importance of Arizona’s universities, the authors also call for further partnership between higher education and advanced manufacturers as well as renewable energy sectors to build up a high-skill workforce prepared for the economy of tomorrow.

The report goes into further depth on business leaders’ confidence in Arizona’s ability to create good paying jobs, expand clean energy adoption, and protect the state’s bountiful natural resources.
You can read the entire report .

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Leaders look toward strong energy policy even during current crisis

Guest Contributor — Thu, 30 Apr 2020 17:00:00 +0000

This story was originally published in the Arizona Capitol Times on April 28th, 2020 .

Leaders across the country—and the world—have spent the last few months dealing with unprecedented challenges, as COVID-19 has eclipsed the day-to-day policy priorities of local, state, and national governments alike. Yet, even while our leaders focus on policies to keep our communities safe and healthy during this crisis, including ensuring essential services—like electricity—remain reliable, they must also continue to look toward the future, when the crisis will invariably end and we return to business-as-usual.

In Arizona, our leaders and utilities have proven they can do both. Just recently, Gov. Doug Ducey announced a critical electric utility relief package in which the state’s largest electric utilities agreed to continue to provide reliable electricity to homes, hospitals, and businesses while making sure that Arizona residents facing financial difficulties will have reliable access to electricity. In addition, many of the state’s water providers have committed to uninterrupted service and delaying disconnections during this time; internet service providers like Cox and CenturyLink have taken it a step further by expanding access and removing data-usage limits and overage charges.

Even with all the necessary focus on COVID-19, Arizona’s leaders are also looking ahead to ensure Arizona remains strong and competitive after this crisis ends. One area in which that is happening is the update to Arizona’s Energy Rules. While the Arizona Corporation Commission has been working to develop a new policy on clean energy, energy storage, and energy efficiency for the past several years, until now progress has been slow.

There are signs that may be changing. On March 20, Commissioner Lea Marquez Peterson issued a letter calling on her fellow Commissioners to pass a policy that would require regulated electric utilities to generate 100 percent of their power from clean energy resources by 2050, explaining:

“Adopting a 100 percent clean energy policy today will send a clear and unambiguous signal to utilities, and current and future customers, that Arizona is moving forward with a cleaner and more affordable energy future, while allowing data, free-market principles and least-cost energy resources guide our utilities on how to get there.”

Commissioner Peterson’s approach is a sound one. By moving forward with a clean energy goal now and a commitment to working out the details of how Arizona will achieve that goal over the coming months and years, the Arizona Corporation Commission will provide the long-term market certainty necessary to drive technology and innovation in the energy sector. It will also spur critical rural economic development efforts and reflect what Arizonans want to see from their utilities and regulators. And, because market forces have rapidly driven down the price of renewable energy sources, they now represent the lowest cost energy option. Encouragingly, several other Commissioners have also indicated their interest in updating Arizona’s energy rules this year.

In Arizona, our leaders and utilities have proven that they are prepared to step up to take care of consumers during this unprecedented crisis, while still looking ahead to the future by working toward a strong energy policy for the state that will modernize Arizona’s energy sector, drive economic development, and help repair some of the economic damage wrought by this novel virus. That is something for which all Arizonans can be proud.

Doran Arik Miller is the Arizona Director for The Western Way (www.thewesternway.org)

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Restaurants, businesses line up behind bill to preserve access to natural gas

Victoria Harker — Wed, 05 Feb 2020 19:00:54 +0000

Companion bills introduced by state legislative leaders to safeguard businesses’ and homeowners’ access to natural gas are receiving strong support from Arizona’s restaurant industry, business community, manufacturers, and organizations that assist low-income residents.

Both Arizona House and Senate leaders are sponsoring bills to prevent communities from banning the use of gas in housing and commercial development projects.

The legislation will “reinforce” Arizona’s ability to regulate its own energy policy, said House Speaker Rusty Bowers, who testified in support of HB 2686 last week before the House Natural Resources, Energy, and Water Committee.

The legislation is in response to a growing number of cities in states like California that are banning natural gas, Bowers said at the hearing. A sister bill in the Senate, , is sponsored by Senate President Karen Fann. Both bills have passed their respective committees.

Choice, reliability, affordability

Supporters of the bill who testified at the hearing said it would protect business owners’ and homeowners’ ability to determine what mix of energy sources work best for them.

In the restaurant industry, gas is a critical, said Ric Serrano, president and CEO of Serrano’s Mexican Restaurants, whose family opened a clothing store in Chandler more than a century ago and later began opening its popular restaurants in the southeast Valley. Today, it owns and operates five restaurants with 200 employees.

“Natural gas provides 100 percent of our heat source throughout our kitchens and is a consistent, reliable and more controllable source for our culinary needs. It is by far the preferred method in restaurants and by my kitchen staff,” Serrano said.

A ban on natural gas would also be extremely costly for restaurants that often operate on slim profit margins, he said.

“While electric alternatives do exist for some of our equipment, in order to get the level of control that natural gas provides, we must look at induction technology, which is far more expensive,” Serrano said. “With many other cost drivers such as minimum wage and higher food costs squeezing restaurants from all directions, removing natural gas would compound all of the problems.”

Berkeley and other cities banning use of natural gas

Last year, Berkeley, Calif. became the first city in the United States to ban natural gas in new low-rise residential buildings to reduce emissions. Other cities in California, Washington, Massachusetts, and other states have passed or proposed similar bans.

Some, like Bellingham, Washington, are talking about banning natural gas heat not only in new construction but also in existing homes and businesses.

Proponents for banning natural gas stated that it would lower harmful emissions. Opponents said a ban on natural gas, which is much cleaner than other fossil fuels like coal and oil, would damage Arizona’s robust economy and competitive standing.

Not only would replacing infrastructure be cost prohibitive, the loss of natural gas would raise energy prices for industries and residents, they said.

Serrano said that if his restaurants were forced to go electric, his energy bills would almost double.

“In 2019, we spent $15,800 on natural gas. If we were to be forced to use electricity, it would nearly double our cost to $30,800. The cost differential is untenable in the restaurant industry.”

Poor residents would be hardest hit

Cynthia Zwick, executive director of the non-profit Wildfire — formerly the Arizona Community Action Association — whose mission is to end poverty in the state, also testified in support of HB 2686 at the hearing, saying it is needed to protect financially vulnerable citizens.

A ban on gas would result in higher energy bills to customers, and higher home prices due to costs placed on homebuilders to bring construction up to new standards. That would make it difficult or impossible to afford for “far too many customers,” Zwick said.

“Rates, policies and programs must include solutions for those most likely to be harmed.”

Manufacturing, home builders, healthcare support bill

Garrick Taylor, executive vice president of the Arizona 91��ý of Commerce and Industry, also spoke at the House and Senate hearings to voice support for the bill on behalf of a coalition of businesses, industries, and fixed-income organizations that seek “balanced energy” solutions.

last month found that 92 percent of Arizona residents prefer to have the choice of using natural gas in their home, Taylor said.

In Arizona, gas utilities Southwest Gas and UniSource Energy Services serve more than 1.2 million customers.

“This legislation before you today preserves that choice by reinforcing the state’s authority to set energy policy in Arizona, and more importantly, ensure Arizonans are able to use the services of utility providers that are authorized to serve them.

“It preserves the status quo. If an establishment wants to go full electric, they can. If they want to rely solely on renewables, they can.”

Arizona Manufacturers Council Chair Dawn Grove said her organization supports the legislation.

“Natural gas fuels manufacturing and helps to create jobs,” Grove said. “The natural gas industry is a major contributor in expanding our local and national economy in a clean and sustainable way.”

The coalition represents a wide array of industries and advocates for the senior community and those on fixed incomes: chambers of commerce like the Greater Phoenix and Chandler chambers; economic development groups including the Yuma Economic Development Council; homebuilders and the Arizona Multifamily Association; and other industries including tourism and lodging, manufacturing and biotech, he said.

A ban could hurt industries like these that are critical to the state, and the employees who work for them, Taylor said.

“Prohibiting the use of natural gas in Arizona would eliminate many high-wage jobs associated with the natural gas industry and harm our ability to compete for out-of-state economic development and other opportunities.”

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