Cost Analysis Reveals APS’s Net Zero Plan Could Burden Ratepayers with Billions and Spark California-Style Blackouts

By the Arizona Free Enterprise Club |

The push for a global “Net Zero” agenda is intensifying, with efforts taking root through various initiatives such as the Paris Climate Accords and the Green New Deal embedded in the Inflation Reduction Act. This initiative extends beyond formal government mandates, influencing electric utilities worldwide. Arizona is witnessing this trend, as local utilities are increasingly aligning with Net Zero commitments, driven by government regulations, investor pressures, and the pursuit of subsidies for renewable energy sources.

Recent findings from a report by the Arizona Free Enterprise Club, in collaboration with the AZ Liberty Network, reveal that the anticipated costs for Arizona’s largest utility to transition to a Net Zero model may reach an astounding $42.7 billion by 2038. This figure exceeds prior estimates, highlighting the financial implications of such initiatives.

The roots of the green agenda in Arizona trace back to 2006, when then-Chairman of the Corporation Commission, Kris Mayes, enacted mandates requiring utilities to derive 15% of their energy from renewable sources by 2025. These initial regulations have reportedly cost ratepayers $2.3 billion. A controversial ballot initiative funded by an out-of-state billionaire in 2018 sought to escalate that requirement to 50% renewable generation by 2035 but suffered a significant defeat, rejected by a two-to-one margin.

In 2020, the Arizona Corporation Commission revisited the discussion on renewable energy, introducing the ambitious goal of 100% renewable energy by 2050. However, the commission faced criticism as it initially proceeded without conducting a thorough cost analysis. When such an analysis was finally undertaken, it estimated the economic burden on ratepayers at around $6 billion, ultimately leading the commission to reject the proposal.

Despite opposition to past initiatives, Arizona’s utilities have made significant strides toward self-imposed Net Zero targets. Notably, Arizona Public Service (APS) has pledged to achieve 100% “carbon-free” energy by 2050. These commitments are documented in SEC filings, indicating the serious nature of these promises, and even tie executive compensation to the amount of clean energy initiatives executed in the state. The influence of these commitments is evident in shaping the utilities’ long-term resource plans.