Warning Issued in Common Sense Institute’s Arizona Energy Competitiveness Index

By Matthew Holloway |

Arizona’s Energy Competitiveness Index, unveiled on Friday by the Common Sense Institute of Arizona (CSIA), paints a concerning picture despite improving residential electric affordability. Arizona families and businesses are reeling from higher electrical rates instituted by the Arizona Corporation Commission in March. Meanwhile, reliance on intermittent energy sources like solar and wind is up, detracting from more dependable natural gas and nuclear power options.

In an intriguing twist, the report indicates that Arizona now ranks 21st in residential electric affordability, a significant jump from 28th in 2011. However, this improvement is relative, as other states have largely fared worse over the same period. Instead of a true gain in affordability, this ranking reflects broader nationwide challenges in keeping energy costs low.

Energy reliability, though on the decline nationwide, still places Arizona among the top performers. Arizonans faced an average of 136.9 minutes of electrical interruptions in 2022, a notable increase from 73.9 minutes in 2013. Yet, this is still considerably better than the 333-minute national average, securing Arizona a 5th-place ranking in grid reliability, despite slipping in competitiveness indices.

The CSIA noted that both electricity and natural gas prices for residential, commercial, and industrial users in Arizona have risen over the last 13 years. However, these rates are now more competitive as many other states experienced larger increases. Again, Arizona holds the 21st spot for residential electric affordability.

The Energy Competitiveness Index, a composite measure introduced by CSIA, saw a peak of 83 in 2022 but tumbled to 79 in 2023. This decline, after a steady rise from a score of 77 in 2011, signals a negative trajectory for Arizona’s energy landscape.

Arizona’s generating capacity, termed “nameplate capacity,” saw an uptick from 2019 to 2022. Yet this increase has barely kept pace with the state’s booming population, driven by high levels of net migration. The report highlights that since constructing power plants is a long-term endeavor, the state’s nameplate capacity per 100,000 residents has consequently stagnated.

The Common Sense Institute urged caution, warning policymakers against a hasty transition to renewable energy sources without sufficient infrastructure in place. Citing examples from California and Texas, the report underscores that such transitions, if rushed, can be costly and undermine reliability and competitiveness.

As Arizona continues to navigate its energy challenges, questions loom about the sustainability and reliability of its future energy outlook.

Matthew Holloway is a reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.