A Closer Look at Proposition 127
- Proposition 127, an initiative backed by California billionaire Tom Steyer, would require Tucson Electric Power and most other Arizona electric providers to produce half their power from renewable resources by 2030 – more than tripling the state's current goal.
- TEP already is expanding wind and solar power at a pace that will double Arizona’s renewable energy requirement by 2030, all while maintaining affordable, reliable service.
- If Proposition 127 is approved, the electric bills of typical TEP residential customers would increase nearly $450/year by 2030, according to Arizona's Residential Utility Consumer Office, or RUCO. Business customers would face even larger increases, depending on their energy use.
- The measure would amend the Arizona Constitution, preventing state regulators or other elected officials from making any changes if it proves too costly or threatens reliability.
- It would force the early retirement of power plants and other infrastructure, eliminating jobs and damaging the economy in vulnerable rural communities.
TEP’s Clean Energy Leadership
TEP has added hundreds of megawatts of solar and wind power over the past decade, and we’re planning to nearly double our clean energy capacity over the next three years. We’re also developing energy storage systems at a scale that ranks us among the utility industry’s leaders.
Nearly 13 percent of our power already comes from renewable energy resources, and we’re adding wind and solar energy systems at a pace that will allow us to provide 30 percent of our power from renewable resources by 2030 – doubling the state’s 2025 requirement.
A critical part of establishing that ambitious goal was determining that we can reach it without compromising reliability or affordability. The goal also reflects the capabilities and characteristics of our electric system and our region, as Southern Arizona lacks affordable hydropower or geothermal resources that could allow higher levels of renewable energy sooner in other places.
These realities haven’t stopped some people from pushing for even more aggressive adoption levels. A group backed by California billionaire Tom Steyer is funding Proposition 127, which would amend the Arizona Constitution to require that TEP and other regulated electric utilities get 50 percent of their power from renewable resources by 2030. The requirement would not apply to Salt River Project, Arizona’s second largest electric provider.
Proposition 127 calls for a rapid expansion of renewable energy resources. But the initiative, which was created without the input of Arizona’s utilities or their regulators, also would drive TEP’s electric rates much higher and create other adverse impacts.
Higher Energy Bills
RUCO, a state agency, projects that, if Proposition 127 passes, the bills of typical TEP residential electric customers would increase by nearly $450 per year by 2030. TEP projects that business customers could face even larger increases, depending on their energy use.
Another factor that would drive rates higher is a requirement that utilities secure 20 percent of our renewable power from more expensive small, privately owned rooftop solar arrays. Increased subsidies would be needed to achieve such high adoption levels.
Supporters of the initiative often quote low wholesale prices for solar energy in arguing that the measure will save customers money. But those prices do not account for the cost of stabilizing, storing and delivering solar energy, or the need to provide alternate generating resources when the sun isn't shining.
Accelerated Power Plant Closures
TEP projects that the initiative would force the early retirements of Units 1 and 2 at the Springerville Generating Station (SGS) in 2025 and 2030, respectively. While we plan to stop using several other older coal-fired power plants over the next 15 years, our long-term resource plans call for continued use of these newer, cleaner and more cost-efficient SGS units.
In addition to increasing costs for TEP customers, the early closure of two coal-fired generating units at SGS would compromise the long-term diversity and security of our energy supply. Depending excessively on natural gas for the reliable power needed to balance intermittent renewable energy sources could make TEP’s system more vulnerable to unexpected service interruptions on interstate natural gas transmission lines, as Arizona lacks in-state facilities to produce or store natural gas.
The closure of SGS units also would impact the economy in Springerville and surrounding Apache County communities. As the plant’s operator, TEP employs more than 300 people whose wages support thousands of jobs in the White Mountains region of Eastern Arizona.
An Alternative Approach
TEP is already working to expand renewable energy resources at a rapid, reasonable pace that allows continued reliable, affordable service. We're also working with state regulators who have expressed an interest in updating Arizona's renewable energy goals through a deliberative and inclusive public process.