Mar 182016

Senate President
Andy Biggs

Senator Sylvia Allen

By Nolan Madden
State Senator Carlyle Begay’s recent bid for the formation of a Navajo County power district remains only a political vision so far, with its fate appearing even less certain based on the latest responses to the proposal by state officials.
Snowflake’s SEC Power Corporation CEO Skyler Careaga, who is actively seeking the support of state lawmakers for Begay’s bill, says his own appeals have been met with a less-than-warm reception at the state capitol.
“The hold up with this county power district legislation is Senate President Andy Biggs (who is now running for Congress), who has refused to put it into a committee. That action alone is keeping it (SB 1506) from getting a hearing,” Careaga said this week.
The CEO levied his own assessment that the Senate President, like most of the leadership in legislature, are natives of the greater Phoenix area, the only part of the state, Coreaga says, that has any kind of backup plan in place for power grid problems.
“They have been ignoring the needs of the rural counties in Arizona and so far are getting away with it,” Careaga added.
In May 2015, Careaga formally requested Biggs’ support in changing the language of state regulations to allow free market competition for power through the constitutional Title 48 Chapter 11 Article 1 provision, which permits a county’s community to manage its own power district.
“However, this law does not allow any other power company other than Arizona Public Service Co. and Salt River Project to provide retail service within the Arizona Corporation Commission-approved boundaries. A technical correction to this law will allow any county in Arizona to actually approve a power company to provide retail service other than SRP and APS,” Careaga wrote.
“This will allow…each county to act as a safety net, sustaining a reliable backbone for the infrastructure despite the free markets. The increased competition will cause the power grid to expand into a better, more efficient and reliable infrastructure.”
Biggs responded two months later, noting, “I have always been an advocate of free markets where appropriate, and I encourage businesses and regulators in every industry to actively investigate delivery models that best serve their customers and Arizona’s residents.
“As you are undoubtedly aware, the electric utility industry has many constraints regarding every aspect of its operations, from types of power generation to prescribed service territories. The elected body constitutionally responsible for regulating the power industry, the Arizona Corporation Commission (ACC), attempted to inject a free market approach into that industry in 2000, which was ultimately found to be unconstitutional. The court found that because the Arizona Constitution requires the ACC to set ‘just and reasonable’ rates for the electric utilities under its jurisdiction, a deregulated power market deprives the ACC of this constitutional mandate.
“Therefore, while I appreciate your interest in modifying the statutes to allow a county to approve a new power district that ostensibly opens the APS service territory to competition by your company, such a gesture would be empty under the current strictures of the Arizona Constitution.”
Careaga says he feels the Senate President does not understand the aim of Begay’s bill, citing a December 2015 study in which APS sought to build a new 69-kilovolt power line to service about 10,000 homes in the north Scottsdale area.
Careaga points to media coverage of the study, published by The Scottsdale Independent in that month, which touted APS’ stance that “neighborhood power sources are like a spider web of deliverability.”
“It becomes an issue if a string of lines would go down; without the redundancy, customers would have to wait for that line to go back up and that can take hours, even days,” APS spokesman Steven Gotfried stated in the article.
“If you have power coming from two separate sources, you can get power from the other line,” Gotfried said.
Of Biggs, Careaga contends, “He doesn’t understand how important it is to rural Arizona to have a choice and the redundancy in the grid. The utility companies know this and because this is a rural issue it won’t be heard unless rural Arizonans push for options. This bill will create the opportunity for redundancy in a county.
“As for the pricing, I know we can do this at a lower rate and provide other much needed infrastructure, such as access-point fiber optics throughout the county with new underground powerlines.
“We never disagreed with having the Arizona Corporation Commission fix pricing; we are looking at a cost that would save Navajo County an average of $.04 to $.07, depending on the utility.
“Competition is a good thing. Phone carriers have had it since 1996 with the Telecommunications Act of 1996; now the redundancy in carriers and infrastructure of the phone networks is stronger than ever. You now have more choices than ever.”
Careaga said he also reached out to Sen. Sylvia Allen earlier this year, with the impression that Sen. Begay had been in talks with her on the issue.
In a direct response, Allen stated to Careaga, “It has come to my attention that you and your colleagues have, in both private meetings with county officials and in email correspondence with state lawmakers, publicly claimed that I am co-sponsoring legislation that would allow county governments in Arizona to create new taxing districts, and enter into contracts to generate and distribute electricity.
“I am writing this morning to formally request that you immediately cease making such claims. I have never agreed to sponsor legislation creating county power districts. I do not support such legislation and do not appreciate my name being used by you to promote your plan.”
Sen. Allen followed the response with a related post to her public Facebook page:
“Friends and neighbors, I wanted to share some thoughts on a recent effort by a Phoenix-area group to pressure Navajo County into supporting legislation at the state capitol.
“You may have heard about a group called SEC Power. This company has been passing out flyers and posting ads on Facebook urging people to contact the county to support a bill that they claim would create jobs in Navajo County.
“I am all for jobs and have spent the last 30 years of my life advocating for jobs for rural Arizona, but I think everyone needs to take a closer look at this group and what they’re really asking for. I’ve seen a copy of their proposed law and it’s not a good idea. They claim it would create jobs, but what it would actually do is create a new taxing district that would have the authority to levy new property taxes to pay this company for power. Not only that, it would expand government by giving counties the authority to buy and sell power.
“I don’t know about your family, but my family members are taxed enough. We don’t need another taxing district and we certainly don’t need more property taxes, and we don’t need to give government more power than it already has. Navajo County can barely fund the jail, courts, and roads–why would we give them more taxing authority to buy and sell power?”
Sen. Allen has provided no further updates on her statement to date.