Arizona electric companies told state utility regulators last week that they are well equipped to deal with climate extremes to avoid disastrous rolling blackouts and major power outages like those experienced in California and Texas this past year. 

Poor planning is one reason those two states saw major energy shortages, regional and state power grid experts told members of the Arizona Corporation Commission (ACC) at the . 

The special meeting is one of several emergency hearings on the crises to help educate commissioners, legislators and community stakeholders about what went wrong and to be reassured that the same won’t happen on Arizona’s “watch,� said Chairwoman Lea Márquez Peterson.

“We all want assurances that what we observed won’t happen here,â€� Márquez Peterson said. “The public trust their elected leaders to be working day and night to make sure these public health catastrophes don’t happen on their watch.â€� 

Lack of planning led to tens of billions of dollars in damage

In California and Texas, lack of planning resulted in tens of billions of dollars in damages to property, life and the economy in both states. 

All states in the West are now grappling with how to prevent even more disasters. Energy demands are only going to increase along with costs, experts said at the hearing.  

Arizona and the other states and regions that share the grid in the West are at risk, they said. Coordination and cooperation must now be the focus. 

At the meeting, representatives from Arizona Public Service Company (APS), Salt River Project (SRP), Tucson Electric Power (TEP), UNS and Arizona Electric Power Cooperative detailed measures they are taking to prevent similar catastrophes. They said they are better prepared than California and Texas, pointing out that Arizona saw record heat last summer but experienced few problems in meeting demand.   

Representatives from the  (WECC) also spoke about their analysis and recommendations for rising risks across the Western U.S. The WECC is federally authorized to assure a reliable electric system within the Western Interconnection, one of two major power grids in the nation. The grid interconnects 14 states including Arizona, two Canadian provinces and northern Baja in Mexico. 

Among the most important recommendations is to pursue better cooperation and coordination in managing the grid moving forward, Jordan White, WECC’s vice president of strategic engagement and deputy general counsel told commissioners. 

Here are some takeaways from the summit:

1,000-year events now happening every 10 years or less

A major factor for California and Texas were catastrophic weather-related events that rarely occurred before 2000. A 1,000-year event now might happen every 10 years or less.

These major climate events require that states connected to the grid change how they have always conducted business, White said. 

Climate extremes causing less predictability in system

Much of the need for quick action lies in the changing season patterns in the West, White said. 

Historically, states in the Western Interconnection have had different peak energy seasons, making it easy to support each other. For example, Arizona has had excess energy to share in the winter when Northwest states were freezing. But warmer temperatures and higher demands overall are “broadly impacting� the system. Climate is becoming more similar across states, White said.

Less diversity among resources affecting supplies 

A large number of “baseload predictableâ€� energy resources are being retired, which is reducing the diversity of available resources in states like California that are moving to 100 percent renewable energy. 

“The long and short of this is that the predictability and diversity that we relied on for so many years is changing, which requires a heightened focus on how we look at how the system is managed,� White said.

Among the WECC’s top recommendations is the need for more cooperation and coordination, he said. Interdependencies need to be accounted for. 

What went wrong in California

High temperatures and widespread wildfires in California last summer caused power losses to millions of homes and forced the state’s power grid to order utilities to cut electricity on a rolling basis. 

An investigative report by the California Public Utilities Commission, the state Energy Commission and the California Independent System Operator, which manages the state’s power grid listed a number of reasons for the shortages including:

-California failed to properly prepare for shortages. For example, when California expected to import energy from other states to address its accelerated demand, virtually every power plant in the West was also running at full capacity. 

-As California has increased its reliance on renewables, it failed to account for shortages in energy generation from its solar and hydroelectric resources. 

What went wrong in Texas 

In Texas, back-to-back severe winter storms last month caused the power crisis that resulted in a massive electricity generation failure. More than 4.5 million homes and businesses were left without power, resulting in shortages of water, food and heat. Some businesses were left without heat for several days. 

Two primary causes for the shortages were found to be:

-Inadequately winterized natural gas equipment, which led to extreme cold  freezing at natural gas plants. Frozen equipment at wells also limited the gas supply extracted from the ground.

-Texas has largely isolated itself from the two major power grids to avoid federal oversight and deregulate its energy sector. That complicated its ability to import energy from other states. 

Why Arizona is well prepared

Arizona is a different story, utility representatives told commissioners at the meeting. All of the utilities who spoke said they are well prepared for 2021.

Utilities also have a good diversity of resources to pull from, ranging from renewables to natural gas to carbon-free nuclear energy. Microgrids are also creating new energy sources. These small, self-contained power systems can draw energy from rooftop solar panels, nearby wind turbines and other sources.

APS said it has long invested in weatherization to protect plants and equipment from extreme heat. All of the utilities offer energy saving plans or enlist the help of residential and business customers to lower energy usage during peak summer hours.

Unlike Texas, Â鶹´«Ã½Ó³»­tilities are regulated and under stricter reliability standards. Reliability and affordability of energy are written into the state Constitution. 

Moving forward, White of the WECC said, all members need to work together to better plan and manage the West’s energy as climate disasters are becoming more common. 

“We can’t ignore our neighbors,â€� he said. To view the meeting in its entirety, go to:

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A first-of-its-kind proposal to allow private industry to synchronize electric customers’ smart devices and receive compensation for helping utilities operate the electric grid more efficiently was unanimously approved by the Arizona Corporation Commission (ACC).

If successful, Arizona would be the first state to permit third-party providers to aggregate and control a portfolio of potentially millions of smart devices that large utilities could use to more efficiently allocate and store energy for the grid. 

That could result in lower electric bills for homes and businesses and generate new smart technologies and industries here in Arizona, said Lea Márquez Peterson, the new chair of the utility regulating commission who  introduced the proposal. 

Márquez Peterson and her fellow commissioners voted to give the state’s  largest electric utility, Arizona Public Service (APS), the go ahead to develop a “tariffâ€� for the project — a plan that lays out the structure, fees and other parameters of the program — and move it forward after board review and approval. 

“The proposal allows aggregators of all kinds and technologies to participate in APS’ tariff, opening the door to potentially untapped market opportunities and economic development,â€� Márquez Peterson said. “Previously, rooftop solar was the only tool in the distributed energy toolbox. 

“But now, we have so much more. Air conditioners, appliances, devices, and batteries, even entire homes, as long as they are connected to the internet, can now be called upon to shift and respond to the grid. That’s extremely valuable.�

Tapping into millions of smart devices to benefit grid

These electric grid resources could include an array of smart devices and energy efficiency improvements, such as internet connected ‘smart’ thermostats and ENERGYSTAR appliances, as well as at-home batteries. 

Through aggregation, they can help to reduce the total cost to the grid by reducing or shifting the time of energy used, reducing the amount of power needed during the most expensive times of day, utilizing or storing more power during the most affordable times of day, or otherwise improving the operating efficiency of the grid.

Companies, customers benefit based on value they provide

The third party companies providing the service for APS, potentially other utilities in the future, would be compensated for the value each provides to the grid. This would include compensation for the value of energy, capacity, demand reduction, load shifting, voltage support, and other ancillary services, to name a few, the chairwoman said. 

Consumers participating in the program also would be compensated based on the value they provide. 

“Our smart infrastructure, combined with Arizona’s digital connectivity and demand curve, which is unique to the Western United States, makes the Desert Southwest, and Arizona specifically, the perfect place to study demand-side optimization and lead on cutting-edge energy innovations and regulatory policies,â€� she said. 

New chair brings business approach to regulatory body

Márquez Peterson, who is the only commissioner based outside of Maricopa County, brings a strong business background and education with her to the utility-regulatory commission. 

Before being appointed to the commission in 2019 and her recent election in November, she served as the president and CEO of the and executive director for .

She was the owner and operator of a business brokerage firm and a chain of six gasoline station-convenience stores in the Tucson region. She earned her undergraduate degrees in Tucson in marketing and entrepreneurship from the University of Arizona, and her master’s degree in business administration from Pepperdine University in California.

Among the many boards she serves on are the Pima County Workforce Investment Board, University of Arizona Foundation, president of the National Association of Women Business Owners in Tucson, and a member of the national U.S. Small Business Association’s Small Business Development Council advisory board. 

Calling on stakeholders to participate in proposal

Stakeholders such as technology companies, consumer product manufacturers, and third-party aggregators that are involved in providing energy services or devices for the grid such as battery storage, energy efficiency, smart devices, smart appliances, internet of things, home energy monitoring devices, and ancillary services interested in getting involved in the development of the project, go to: . 

A copy of the proposal can be viewed .

About the Arizona Corporation Commission

The ACC was established by the state constitution to regulate public utilities and business incorporation. The commission is Arizona’s co-equal, fourth branch of government. The five Commissioners elected to the Corporation Commission oversee executive, legislative, and judicial proceedings on behalf of Arizonans when it comes to their water, electricity, telephone, and natural gas resources as well as the regulation of securities, pipeline, and railroad safety. To learn more about the commission and its commissioners, visit: .

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This story was originally published in the Arizona Capitol Times on April 28th, 2020 .

Leaders across the country—and the world—have spent the last few months dealing with unprecedented challenges, as COVID-19 has eclipsed the day-to-day policy priorities of local, state, and national governments alike. Yet, even while our leaders focus on policies to keep our communities safe and healthy during this crisis, including ensuring essential services—like electricity—remain reliable, they must also continue to look toward the future, when the crisis will invariably end and we return to business-as-usual.

In Arizona, our leaders and utilities have proven they can do both. Just recently, Gov. Doug Ducey announced a critical electric utility relief package in which the state’s largest electric utilities agreed to continue to provide reliable electricity to homes, hospitals, and businesses while making sure that Arizona residents facing financial difficulties will have reliable access to electricity. In addition, many of the state’s water providers have committed to uninterrupted service and delaying disconnections during this time; internet service providers like Cox and CenturyLink have taken it a step further by expanding access and removing data-usage limits and overage charges.

Even with all the necessary focus on COVID-19, Arizona’s leaders are also looking ahead to ensure Arizona remains strong and competitive after this crisis ends. One area in which that is happening is the update to Arizona’s Energy Rules. While the Arizona Corporation Commission has been working to develop a new policy on clean energy, energy storage, and energy efficiency for the past several years, until now progress has been slow.

There are signs that may be changing. On March 20, Commissioner Lea Marquez Peterson issued a letter calling on her fellow Commissioners to pass a policy that would require regulated electric utilities to generate 100 percent of their power from clean energy resources by 2050, explaining:

“Adopting a 100 percent clean energy policy today will send a clear and unambiguous signal to utilities, and current and future customers, that Arizona is moving forward with a cleaner and more affordable energy future, while allowing data, free-market principles and least-cost energy resources guide our utilities on how to get there.�

Commissioner Peterson’s approach is a sound one. By moving forward with a clean energy goal now and a commitment to working out the details of how Arizona will achieve that goal over the coming months and years, the Arizona Corporation Commission will provide the long-term market certainty necessary to drive technology and innovation in the energy sector. It will also spur critical rural economic development efforts and reflect what Arizonans want to see from their utilities and regulators. And, because market forces have rapidly driven down the price of renewable energy sources, they now represent the lowest cost energy option. Encouragingly, several other Commissioners have also indicated their interest in updating Arizona’s energy rules this year.

In Arizona, our leaders and utilities have proven that they are prepared to step up to take care of consumers during this unprecedented crisis, while still looking ahead to the future by working toward a strong energy policy for the state that will modernize Arizona’s energy sector, drive economic development, and help repair some of the economic damage wrought by this novel virus. That is something for which all Arizonans can be proud.

Doran Arik Miller is the Arizona Director for The Western Way (www.thewesternway.org)

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Two of Arizona’s biggest power utilities have been giving back to the community’s most underserved members in the form of solar energy.

Arizona Public Service (APS) and Salt River Project (SRP) have each started programs to bring solar energy to the people — and charity organizations — who need it most.

As part of its Solar Communities program, APS donated enough solar panels to cover 144 spaces in the main parking lot for St. Vincent de Paul, a global nonprofit organization whose Phoenix chapter serves the Valley’s homeless population.

“The Solar Communities program enables limited- and moderate-income residential customers as well as non-residential customers such as Title 1 schools, rural governments and nonprofits to participate in clean energy while receiving a bill credit for their support,� said Tammy Kasprowicz, Solar Communities project manager

St. Vincent de Paul (SVdP) applied to be a part of the Solar Communities program and met all the requirements, she said.

“St. Vincent de Paul and many other incredible organizations benefiting our community will be further supporting their communities by helping to provide renewable, clean energy to the community around them while benefiting from a bill credit that they can then apply to the resources they currently offer,� Kasprowicz said.

Energy harvested by the — which generates enough power to run 86 homes per day — significantly reduces energy costs for the charity, sending savings back to programs that help people in need, according to SVdP.

“We are so thrilled and so grateful for this project,� said Steve Zabilski, executive director of SVdP in Phoenix. “This is literally a million-dollar project for APS, and with our focus on serving economically-challenged families, we could never have afforded such an investment.�

APS is Arizona’s largest public utility, with more than 1.4 gigawatts of solar energy available to customers today. APS predicts that renewable energy sources, including solar, will grow from 12 percent to 18 percent of the company’s overall energy mix over the next 15 years.

has also made serving the community a primary mission. The Tempe-based utility’s “Solar for Nonprofits� program helps charitable organizations reduce their energy costs by providing and installing solar panel systems.

“Nonprofits serve the communities and our customers, and SRP is committed to providing programs that help our communities thrive,� said Dan Dreiling, director of customer programs at SRP.

Since 2007, the program has completed 49 solar system installations, helping nonprofits save more than $600,000 collectively while providing green, emission-free energy for their buildings, according to SRP.

Earlier this month, the company announced it has donated solar systems to three Valley nonprofits: A New Leaf, which provides shelter and resources to homeless youth, domestic abuse victims and others who are struggling; Arizona Humane Society, a no-kill that takes in abused and abandoned pets; and the Arizona Agribusiness and Equine Center (AAEC), an early college high school system that partners with community colleges that offers students the chance to earn college-transferable credits while completing high school classes.

“At SRP, we believe in giving back to the community, and we do that in a number of ways through contributions and employees who volunteer in the community,� Dreiling said.

Principal Eric Stevens said he considered the solar panels to be a “great opportunity� for the school.

“Any money saved as a part of lowering our energy consumption will go into broadening and enhancing educational opportunities for our students,� he said.

SRP’s Solar for Nonprofits program is funded by SRP and its customers, who can opt-in to contribute as little as $3 a month.

“This is a great partnership with our customers who contribute to the program, and an impactful way to invest in green energy while helping nonprofit agencies direct more funds to the communities they serve,� Dreiling said. “The program supports our commitment to investing in Arizona-produced, solar energy projects that also benefit the nonprofit arena.�

According to the Arizona Humane Society, the savings from the solar installation at the organization’s Nina Mason Pullman Campus for Compassion could be used to help treat 530 orphaned, newborn kittens or 220 puppies and dogs in need of treatment for Parvovirus.

“The impact that the savings from the solar installation will have on hundreds of the Valley’s most vulnerable animals is truly lifesaving,� said Dr. Steven Hansen, president and CEO of the Arizona Humane Society. “These funds will ensure that the efforts taking place in critical medical areas such as AHS’ trauma hospital, Parvo Puppy ICU and newborn kitten nursery will go even further to save the lives of pets who are not often given a second chance in other shelters.�

A New Leaf CEO Michael Hughes said he was thrilled when he learned that SRP would be donating solar panels, calling the project “innovation with a heart.�

Dreiling said SRP plans to continue the Solar for Nonprofits program, promoting the cause to attract new customers who may be interested in participating.

As for APS, SVdP served as the inaugural nonprofit construction and installation site for the Solar Communities program, which will continue to partner with established Arizona nonprofits to provide solar-generating parking panels.

The project began in February 2019, coordinated by SVdP Senior Advisor Steve Gervais. The panels were fully installed, wired to the grid and generating solar energy by June.

“It was an honor for St. Vincent de Paul to be selected as the first site under the APS Solar Communities program for nonprofits in Arizona,� Gervais said. “By any standard, this was no small project.�

Kasprowicz said APS is committed to helping solar energy expand as a resource for Arizona.

“We are advancing Arizona’s solar leadership while providing safe, reliable and increasingly clean energy to our more than 1.2 million customers,� she said. “In addition to expanding access to solar for customers statewide, our Solar Communities program is helping to maintain solar jobs in Arizona, which benefits the state’s economy.�

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The SCALE UP Program is a Tucson-based initiative to help local businesses become more sustainable, saving them money on utilities, providing educational resources and offering financial incentives while reducing energy use, water consumption, waste and emissions.

The program was launched by the Local First Arizona Foundation, the sister organization to nonprofit Local First Arizona (LFA) focused on creating strong, self-sufficient local economies, in partnership with the Tucson 2030 District, a public-private  dedicated to creating a high-efficiency building district in Tucson.

“When it comes down to it, the Local First Arizona Foundation is about creating a better economy that benefits all Arizonans,� said CJ Agbannawag, program manager for SCALE UP.

“We believe that it’s important that, when we’re talking about sustainable economies, we also need to be considering what it means to have a sustainable environment and a sustainable community,� he said. “And we realize that business ownership and the way we run a business has a big  and on your community.�

SCALE UP — Sustainable Communities Accessing Lending and Expertise Upon Performance — launched in 2018 as a pilot program for Tucson, funded by the Arizona Office of Grants and Federal Resources.

“We wanted to put a twist on the traditional type of energy efficiency workshops and water efficiency workshops to see if [businesses] can have better follow-through… and actually make these bigger implementations and investments in their buildings so they can be more sustainable,� Agbannawag said.

In the , 11 locally-owned Tucson businesses went through a six-workshop series covering topics including energy efficiency, water conservation, waste reduction, transportation efficiency, benchmarking and , a volunteer effort by LFA to connect citizens with businesses and provide educational opportunities to the community.

“Each of the six workshops, we pulled in community experts, because there’s already a lot of these great resources out there in your community,� Agbannawag said. “We had slides that facilitators presented on with information that was aggregated from the community and also from the EPA (Environmental Protection Agency), and then we provided a workbook with quick lists of resources for all the different topics.�

The workshops provided checklists that businesses could use to benchmark (evaluate) their sustainability practices and track their progress. The program also offered an incentive package of resources, including energy rebates.

“There were actually some custom incentives as well,� Agbannawag said. “For example,  here in Tucson, they offered a custom rate for businesses. If they saved 10 percent on their efficiency, they could get a 10 percent discount on their corporate membership through the bike share program.�

The program’s purpose is to educate business owners, offer perspective on sustainability issues and create understanding about important questions: Where does the energy come from when you turn the lights on? Where does your water come from in Tucson?

“We wanted businesses to take ownership for these sustainability plans,� Agbannawag said. “There are a lot of auditing-type services out there where someone will come in and do an energy audit for your business, but then those plans just kind of sit on a shelf.�

SCALE UP encourages participants to create a sustainability plan and follow through on it, using resources and advice from industry professionals, government officials and utility experts. The program also lays out all the different incentives and rebates utilities offer, making it easier for business owners to sift through options.

“At the end of each topic, businesses had to benchmark their buildings and benchmark their business practices,� Agbannawag said. “Things like, ‘How many LED light bulbs do you have? How many gallons-per-flush are your toilets?’�

Businesses also had to benchmark their buildings using the  online tool, tracking the progress of energy efficiency improvements and comparing past and current usage.

“The pilot was just in Tucson, so it worked with Tucson Water, Tucson Electric Power and the City of Tucson and all the different municipalities down here to get the information specific to the area,� Agbannawag said. “But the plan is to eventually expand it to the rest of the state.�

The Arizona chapter of Physicians for Social Responsibility, a national environmental health , was a major partner, he said.

“We also worked with the Pima Association of Governments, because they have a lot of great transportation resources in Pima County, including the folks that run our local bus system and streetcar system, from ,” Agbannawag said. “We also had other local nonprofits, like Watershed Management Group, which is a local water coalition here in town; they participated. Technicians for Sustainability was a partner as well; they’re a local solar installer. So we had a pretty broad range of partners that assisted in this program.â€�

Ultimately, the LFA Foundation hopes the program makes business owners more aware of what is going on in their environment and their community, as well as the impact their businesses can have, Agbannawag said.

“Secondly, we want to help these businesses to reduce their utility spending so they actually have more money freed up to invest in their building in other ways or to invest in their company in other ways, so that they can be more environmentally-friendly and have better economic performance,� he said.

Finally, participants were given exclusive access to a revolving loan fund from the nonprofit  (CIC) in Tucson, allowing businesses to take out low-interest loans for sustainability projects. The loans were matched up to 20 percent by a grant from a CIC investor.

The pilot program businesses saw “a pretty big spectrum of improvements across the board,� Agbannawag said.

For example, Pop-Cycle, a sustainability-focused bicycle shop, operates out of a historic building in Tucson that the company believed to be inherently inefficient, Agbannawag said. But after completing the SCALE UP program, Pop-Cycle saw the building’s lowest energy bill in 20 years, he said.

Right now, SCALE UP is in a planning period, hoping to receive assistance from the state and the City of Tucson to continue the program.

“We’re taking what we’ve learned, we’re identifying other partners, so that way when we do relaunch the program we can pretty quickly expand it,� Agbannawag said.

SCALE UP wants to take a cohort of businesses through the program every quarter — four cohorts per year — and complete at least two more sessions before expanding to Phoenix and elsewhere in the state, he said.

Climate change and water shortages will create new financial challenges for local businesses, and learning to be more sustainable is a smart way to prepare for that and offset the economic impact, Agbannawag said. Consumers should be aware, too, he said.

“At Local First, we tell people all the time to vote with your dollar, to support the local businesses, because they have the decision-making power here in our state, and we want to keep our money here to support our tax base in Arizona,� he said.

“If you’re a consumer that wants to be more sustainable, find the businesses — like the ones that went through SCALE UP — that are supporting green projects and sustainability projects, and support them as well, and let them know that they’re doing a good job.�

***

Business owners can email CJ Agbannawag for more information about upcoming SCALE UP workshops or to add themselves to the contact list for future cohorts.

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There is a growing trend in Arizona of putting unassuming, unnamed, practically unrecognizable buildings to use. Are they warehouses? Sort of. The growing trend is that of data center development in the state, and it’s booming.

The Phoenix area is ranked as the second-most active data center market with new construction in the country, according to CBRE’s Data Center Trends Report. Rows of unassuming warehouses are being repurposed into new data centers, like what is doing in East Mesa with its developing data center project. And some companies, like Microsoft, are opting for buying up giant plots of land to build new data centers from the ground up.

Last year, specifically the second half of last year, Phoenix recorded a record level of 41.6 megawatts of net absorption. Northern Virginia, which still holds a contract to build a new Amazon headquarters, comes in at first place, high on the list with 17.5 megawatts.

Phoenix is landing contract after contract for land acquisitions, seeing the highest demand to build future data center developments. According to the report, about 900 acres of land in metro Phoenix has been bought up by data center developers in the last two years. This represents about 15 million square feet of planned data center buildings, something unseen in other parts of the country, except northern Virginia.

“These data center land investments will increase company interest in the metro area, which is very good for the economy. With data centers come other industries, primarily office-centric requirements,� Mark Krison of CBRE said.

When it comes to data center markets as a whole, Chicago and Dallas have the most supply and demand in the country. Arizona is projected to land the third spot on that list within the next few years, moving up from fifth in the nation currently.

According to Krison, besides national tech companies gobbling up land, it’s local companies, like APS and SRP, that provide a growing power grid, and an attractive Arizona tax incentive for data center developers that allows for money savings. Plus, the Phoenix area’s temperate weather is another boost.

Phoenix has seen a growing interest in the data center market, especially as the country plans to upgrade cellular data to 5G. What’s more, online gaming and streaming services, and big data analytics all play a part as they require immense storage for data. This will help to move information along quicker and more efficiently as well as collect more data and make for faster services.

Currently, the greater Phoenix area is balancing a lot of data center development projects that will come to fruition in the next few years. In Goodyear, Vantage Data Centers, a Santa Clara-based company, will build a 49-acre center; CyrusOne, which already has a center in Chandler, will expand to another location in Mesa this summer; and Boston-based Iron Mountain is currently in the middle of a $430 million, three-story data center in east Phoenix.

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