Arizona Utilities Law Poised for Gov. Hobbs’ Approval: A Leap Towards Affordable, Reliable Energy

The Arizona Senate and House of Representatives have advanced House Bill 2679, bringing a significant step towards more affordable and cleaner energy. The legislation now awaits the signature of Governor Katie Hobbs.

House Bill 2679 introduces utility securitization, a financial mechanism already utilized in 33 other states. This allows electricity providers to refinance aging power plants and infrastructure impacted by natural disasters, resulting in cost savings for consumers. It’s akin to refinancing a mortgage to secure lower monthly payments.

Some opponents have criticized the bill, suggesting it might enable utilities to bypass regulatory oversight. However, these claims appear either misinformed or intentionally misleading. In reality, HB2679 includes robust safeguards to ensure that any securitization transactions benefit ratepayers.

Notably, the bill does not bypass the regular ratemaking process. It mandates that utilities such as Arizona Public Service and Tucson Electric Power obtain approval from the Arizona Corporation Commission before initiating any securitization transactions. These utilities are subject to formal hearings to demonstrate compliance.

Furthermore, the commission must ascertain that any proposed securitization is just, reasonable, and in the public interest, ensuring it results in lower costs for customers compared to traditional financing methods.

Importantly, the legislation does not provide utilities unrestricted financial freedom. Utilities must forfeit their profits on any costs they securitize, incentivizing them to utilize this tool solely to decrease costs for consumers when necessary.

Governor Hobbs has prioritized relief for families facing increased living costs. By enacting HB2679, she empowers Arizona’s utilities with a valuable financial tool aimed at minimizing expenses for their customers. The bipartisan support for this significant measure is commendable, and stakeholders eagerly anticipate its implementation.

Matthew Gonzales is the Southwest Regional Director for Consumer Energy Alliance.