Who is on the hook for Arizona’s transition from coal?
Home » News & Media » Who is on the hook for Arizona’s transition from coal?
Tribal leaders of coal-impacted communities made their case to Arizona regulators about how the economic transition from coal should be handled on Thursday.
The meeting was the first of a series of workshops that the Arizona Corporation Commission (ACC) ordered in the most recent Arizona Public Service (APS) rate case.
The question of what role regulated utilities have in compensating the Navajo Nation, Hopi Tribe, and northeastern Arizona communities affected by the mining and burning of coal had largely been avoided by the ACC despite the November 2019 decommissioning and December 2020 demolishing of the Navajo Generating Station near the town of Page.
But with the planned 2025 closure of Cholla Power Plant in Navajo County, and the 2031 planned closure of Four Corners Generating Station in 2031, the communities which are currently feeling the economic fallout continue to pressure the agency for what they call a just and equitable transition.
Thursday’s meeting included presentations from stakeholders about the process of determining who should pay for what given that the entire state benefitted from electricity produced by coal.
One of the main issues discussed is whether the ACC, which regulates investor-owned utilities APS and Tucson Electric Power, has the authority to direct utilities to use ratepayer funds to pay for the transition.
That was an issue that divided the commission during APS’ latest rate case.
The utility and tribes proposed a $144 million post-coal economic package. But ratepayers rather than shareholders would have been on the hook for most of it, which was a concern for several commissioners. The amount was scaled back to $10 million exclusively for Navajo Nation.
The concerns of jurisdiction were repeated on Thursday, most vociferously by Commissioner Jim O’Connor. He argued, “This obligation is an obligation of all of the people, all of the taxpayers of our great state.”
At one point O’Connor suggested a speaker from Arizona State University enlist the help of the university president to convince Governor Doug Ducey to use budget surplus money to assist.
“Over at ASU, there’s a gentleman by the name of Michael Crow, who I understand is very close to the governor and very influential to the governor,” O’Connor said. He went on to say, “I would beg of you to use your influence with Michael Crow and have him approach Governor Doug Ducey and ask him to open the purse strings and do the right thing on coal transition. On just transition. That’s the pot of gold.”
He seemed to have a sympathetic ear from Chair Lea Marquez Peterson who expressed wanting to include other state and federal entities in the process.
But the impacted communities see things differently. Nicole Horseherder, the Executive Director of Navajo environmental group Tó Nizhóní Ániup, said utilities have an obligation to the communities in which they operated, independent of other entities.
“I think the utility should not just be looking out for ratepayers. It has a definite responsibility to the communities that are being impacted by the operations of the companies,” Horseherder said.
Commissioner Sandra Kennedy made clear she thinks the Commission has an obligation to coal-impacted communities.
“These communities, for decades, were totally reliant on and yet also suffered the environmental consequences of an energy system governed over and largely controlled (by the ACC),” Kennedy said. She went on to say, “we cannot leave the Navajo and Hopi communities behind.”
A second workshop to discuss what should be included in the transition is to be scheduled for February.