The AzPHA Board of Directors has endorsed Proposition 127- the Clean Energy for a Healthy Arizona ballot initiative. Proposition 127 would increase the state’s renewable portfolio standard (RPS) which is a mandate that electric utilities acquire a minimum amount of electricity from renewable energy sources. Here’s the actual Proposition 127 Ballot Language.
As of 2018, Arizona’s renewable portfolio standard (RPS) is 15% renewable by 2025. Proposition 127 would increase our RPS each year until reaching 50% in 2030.
The Initiative defines renewable energy as electricity generated by solar, wind, certain hydropower, geothermal, and landfill gas energy. The definition of renewable energy under the initiative doesn’t include nuclear power. For our state, most of the new renewable energy that would be created would probably mostly be solar.
APS reports it currently generates about 12% of its energy from renewable sources which includes utility-owned plants and power being generated by customers through rooftop solar. Tucson Electric Power reports 13%. Right now, Arizona gets 6% of its electricity from solar power.
It’s no secret that Arizona Public Service (APS) doesn’t want Proposition 127 to pass. Their current strategic plan is to mostly meet future electricity needs by building new gas-fired power plants. You can see the resource plan APS filed at the Arizona Corporation Commission in 2017 and APS’ recent RFP for new power plants to get an idea about their current strategic plan.
This is an over-simplification- but the public policy question posed by Prop 127 is whether it’s in the public’s best interest to meet future generation demand with mostly natural gas plants or solar.
There are compelling health reasons why Proposition 127 makes sense from a public health perspective. Burning fossil fuel, including natural gas, creates air emissions (oxides of Nitrogen and volatile organic compounds) that form ozone. Ozone adversely affects human health by increasing cardiovascular and respiratory disease. It can decrease lung function and causes more people to visit emergency rooms or even be admitted to the hospital because of asthma or allergy related illnesses. Some studies have even linked preterm birth to air pollution.
But, if it turns out that the health benefits from cleaner air come at the cost of higher electricity prices- then the health gains from the improvement in air quality would need to be weighed against the public health costs to low income folks who already struggle to pay their electric bills- worsening the social determinants of health for low income people.
Before we took a position on Proposition 127, I and our Board carefully examined what impact the initiative might have on future electricity prices. After all, income is a primary driver of health status, and if the Initiative were to increase electricity prices more rapidly than under the current RPS standard, then it could end up having a net negative impact on public health among low income Arizonans. That’s why we carefully examined the cost issue before taking a position.
One of the best and most objective sources of information about the relative costs of generating electricity I found is the US Energy Information Administration’s 2018 report entitled ”Levelized Cost and Levelized Avoided Cost of New Generation Resources in the Annual Energy Outlook 2018”. The report examines capital, operational and transmission costs as well as off sets from the tax credits. It takes a little time to read but worth the effort.
The bottom line is that solar energy generated using photovoltaic cells is on par or slightly cheaper than energy generated with natural gas. Solar plants have a higher capital cost but lower variable (operational cost) because they don’t need fuel (free photons are the fuel). Solar also benefits from tax credits- which is part of the cost equation.
One of the reasons why solar power is now slightly cheaper than natural gas energy is that the cost of solar panels has decreased rapidly in recent years (in part because of increased global solar panel manufacturing capacity in China). The cost of utility-scale solar has fallen 77% since 2009. The cost of battery storage fell 79% between 2010 and 2017. Another reason why solar costs less in the long run is because of the federal tax credits that are available to utilities that use solar to generate electricity.
Prop 127 also requires 20% of renewable energy eventually be “decentralized” – basically roof-top solar. That means incentives will be created to encourage solar installation. Done thoughtfully, that could provide an opportunity to prioritize installation of panels on homes in lower income areas, relieving pressure on monthly budgets of families who most need that relief while increasing the value of their property.
The bottom line is that after reviewing as many objective facts as we could find, we concluded that Proposition 127 provides net health and environmental benefits. That’s why we’re supporting Proposition 127.
