Arizona Public Service (APS) is one of very few electric utilities worldwide to achieve a double ‘A’ score for climate and water stewardship this year from the not-for-profit charity CDP, which operates a global disclosure and scoring program designed to encourage investors and businesses to act on environmental issues. 

Only four out of almost 6,000 utilities received a double A score this year. One was Pinnacle West Capital Corporation, of which APS is its principal subsidiary. It also is the only North American utility to receive both ratings this year. 

“I am extremely proud to announce that for the second straight year, we have secured a place on their prestigious #CDP A List for tackling climate change and acting to ensure water security in our state,” Eric Massey, director of environmental, social and governance (ESG) policy and reporting for APS, after CDP released the scores last month.  

CDP uses a detailed and independent methodology to assess companies, allocating a score of A to D based on the comprehensiveness of disclosure, awareness and management of environmental risks, and demonstration of best practices associated with environmental leadership.

“Taking the lead on environmental transparency and action is one of the most important steps businesses can make, and is even more impressive in this challenging year marked by COVID-19,” CDP CEO Paul Simpson said in extending congratulations to the companies who made the A List this year. 

APS commitment to 100 percent carbon-free electricity 

APS received the score for its transparency and efforts to protect air and water including a commitment to deliver 100 percent clean, carbon-free electricity by 2050. 

The utility has been adding battery energy storage to its utility-scale solar plants in Arizona and expanding its renewable energy portfolio, including recently signing a power purchase agreement for 200 megawatts of additional wind energy. It has reduced its consumption of groundwater 22 percent from 2014 to 2019. The utility also operates the Palo Verde Generating Station, the largest nuclear plant and the single-largest generator of carbon-free electricity in the U.S.

CDP’s annual environmental disclosure and scoring process 

CDP, which recently celebrated its 20th year, created the global disclosure and scoring program to promote corporate environmental transparency and provide information for environmentally minded investors, companies, cities, states and regions to manage their environmental impacts.

In 2020, more than 515 investors with more than $106 trillion in assets and 150-plus major purchasers with $4 trillion in procurement spending requested companies to disclose data on environmental impacts, risks and opportunities through platform. More than 9,600 responded – the highest ever.

“The scale of the risk to businesses from climate change, deforestation and water insecurity is enormous, and we know the opportunities of action far outweigh the risks of inaction,” Simpson of CDP said. “Leadership from the private sector will create an ‘ambition loop’ for greater government action and ensure that global ambitions for a net zero sustainable economy become a reality.”

Arizona electric utilities facing forces of nature head on  

The recent CDP score is one of many examples of how Arizona’s three largest utilities — APS, Salt River Project (SRP) and Tucson Electric Power (TEP) — have become some of the most forward thinking companies when it comes to the environment.  

It’s a matter of survival. Arizona’s extreme heat and dry conditions present a unique challenge for electric companies. For example, over the past 25 years, about a dozen Arizona locations topped the nation for having the hottest year, including Buckeye, Laveen, the Yuma airport and Bullhead City. Phoenix is now the , according to national climate data. 

To address the forces of nature head on, the utilities have invested heavily in renewable and clean energy infrastructure and are advancing new technologies like battery storage and solar energy.

They also have been focused on protecting and conserving diminishing water supplies. 

SRP, for example, is involved in replenishing the state’s water supply through a massive public-private reforestation project, the Four Forest Restoration Initiative (). The Phoenix region’s largest water provider is also on target to meet its 2035 Sustainability Goals, which call for a reduction of CO2 emitted from generation by 65 percent by 2035 and 90 percent by 2050.

TEP, which has set a goal to provide more than 70 percent of its power from wind and solar resources by 2035, also has committed to eliminate the use of surface water for power generation and a 70 percent reduction in groundwater use.
To see the full list of companies that made this year’s CDP A List, along with other publicly available company scores, go to: .

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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 Â鶹´«Ă˝Ół»­ 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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