HB2679, a Republican sponsored bill that would, according to critics, including those in the legislature and former Arizona Corporation Commission members, reward corporate utility interests and profits over consumer protection and provide a financial lifeline for unclean coal industries in the Grand Canyon State is on its way to the State Senate for consideration.
The measure would provide a safety cushion for corporate utility owners who would use the mechanism of securitization to, according to Joan Meiners of AZ Central:
“Provide utilities more flexibility in financing — but make ratepayers liable for bad investments — has been called “unconstitutional,” “polluting,” “overly broad,” and “the largest change to utility financing ever contemplated in the state of Arizona.”
“Over 41 technical pages, House Bill 2679 proposes sweeping changes to how public power utilities in the state can manage their debt while planning to meet future energy demand. It aims to develop utility securitization rules by which electricity providers can shift financial responsibility for events like power plant retirement, unrecovered fuel costs, damaging weather events like wildfires and other operational uncertainties onto ratepayers via a monthly, unrestricted charge on their utility bills.”
Democratic Members of the Arizona State Senate, former members of the Arizona Corporation Commission, and environmental experts gathered at the State Capitol Rose Garden on April 29 to warn against passage of HB2679.
They later issued a press release.
State Senator Lauren Kuby led the discussion. In her press release comments, she stated:
“The Arizona Corporation Commission, the Attorney General, grid experts, energy-efficiency experts, environmental and consumer groups are united in opposing this bill. It forces the public, not the shareholders to pick up the tab for bad investments. It is written by and for utilities and prioritizes utility profit over consumer protection. Let us work toward solutions that protect ratepayers, promote clean-energy investment, and ensure financial accountability. Let’s slow down this rushed process, bring it before stakeholders and ratepayers in an ACC-led process and then come back to the Legislature with a more robust plan, because Arizonans deserve energy policies that are transparent, fair, and accountable.”
Former Corporation Commissioner and State Legislator Sandra Kennedy also appeared and remarked:
“Today, I want to highlight the serious concerns surrounding House Bill 2679. This bill would allow utility companies to move their bad debts off their books through a financial tool called securitization — essentially forcing ratepayers to pay off their mistakes through bonds, with no real accountability. While securitization can sound harmless, in this case it acts more like a Ponzi scheme: older debts are paid off with new charges, yet locking ratepayers into decades of payments without addressing the root causes of the debt while guaranteeing profits for the utility companies and Wall Street investors and leaving the distressed ratepayers…to pick up the tab. We cannot accept financial shell games that reward corporate mismanagement while shifting the burden onto our hardworking families. House Bill 2679 is wrong for our ratepayers and it’s wrong for our future.”
Senate Democratic Leader Priya Sundareshan also spoke at the event and conveyed:
“Securitization can be an important tool in the energy transition, if it’s done correctly. However, this bill does not yet contain the necessary safeguards. In the Senate Natural Resources Committee, Democrats voted no and explained our concerns including the lack of a transparent stakeholder process, lack of just transition support for affected communities, and above all the failure to limit this tool only to assets that are retiring. We would unabashedly support this bill if it was limited to retiring assets, because this is the critical component that makes securitization a powerful tool to facilitate the closing of polluting coal-fired power plants and mitigate the worst effects of climate change. But the utilities have rejected my amendment to do so – precisely because APS wants to sell their Four Corners coal-fired power plant and allow it to remain in operation while saddling the purchaser with a bad asset. Our state government does not need to step in to help our utilities shuffle their bad debts onto less sophisticated purchasers.”
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