Arizona’s High Stakes Utility Election — Episode 205 of Local Energy Rules

Charlie Fisher:

Our mission as an organization is to make that a reality. To make Arizona a national leader in solar, but also in wind, and geothermal, and EVs, and storage technology. We have all of the ingredients. And changing the makeup of this SRP board is one of the first steps in realizing that.

John Farrell:

If you think a publicly owned utility means a paragon of openness and democracy, you might be surprised to hear of the Salt River Project, where the mantra is one acre for one vote. In an upcoming election, clean energy advocates have the opportunity to flip the SRP board and potentially reverse several years of policy blocking the use of solar energy in the U.S. state that has 330 sunny days per year. Joining me in March, 2024, Charlie Fisher, executive director with Arizonans for a Clean Economy, discussed the organizing effort around this utility board election and its implications for Arizona Electric customers. I’m John Farrell, director of the Energy Democracy Initiative at the Institute for Local Self-Reliance, and this is Local Energy Rules, a podcast about monopoly power, energy democracy, and how communities can take charge to transform the energy system.

Welcome to Local Energy Rules. I just want to start off by asking you what got you into clean energy work? How did you land with this organization or how did you even get started in the climate and clean energy space?

Charlie Fisher:

Thank you so much, John, for inviting me on. I’m really excited to talk to you. So I first got interested in clean energy as a freshman in college. Actually, my first week during freshman orientation had the opportunity to hear Bill McKibben, who I’m sure you’re familiar with, a fairly famous advocate, author, professor, and he gave remarks to our class about sort of the subversive nature of the influence wielded by extractive industries and even on our liberal arts campus, what percentage of our endowment was either held in fossil fuel stocks or controlled by fossil fuel interests, and how did that kind of permeate to decisions that we didn’t even see or think about? And so that sort of set me down the path of really designing a lot of my bachelor’s degree around clean energy and communications and advocacy work. I am very excited after it’s been about almost 12 years now of doing different things in Arizona, but really, really excited to be at Arizonans for a Clean Economy and focus on these critical issues.

John Farrell:

So I’ve talked to some folks previously on this podcast, but also many of our friends and allies who have worked in Arizona over the years, and it’s sometimes been a challenging state for clean energy work. The investor-owned utilities, for example, have put a lot of money into the election of their own regulators on the Arizona Corporation Commission, but there have also been some tangles with publicly owned utilities. So we want to talk a little bit today about the Salt River Project. Could you just kind of introduce us to this public utility, explain how it’s organized, how is it a public entity, and also maybe preview what’s happening soon that its customers should be aware of?

Charlie Fisher:

There has been no shortage of shenanigans pulled by some of the investor-owned utilities here. Salt River Project is a different beast altogether. So they are a public power company here in Arizona, so they’re technically a political subdivision of the state, which means that they’re not regulated for the vast majority of things by the Arizona Corporation Commission, which is our public utility regulator here in Arizona. And so the Salt River project has been around really since statehood, before statehood. And the original deal was that early 20th century land-owners, landholders, most of the agricultural interests put up their property as collateral so that the federal government would come in and build the Roosevelt Dam, which played a huge role in the development of the Phoenix metro area and building of the Central Arizona project and our local canal systems here.

In a hundred plus years since then, SRP has grown into a massive utility provider and they provide both water and electric power to Arizona families and businesses largely here in Maricopa County, the Phoenix, Phoenix metropolitan area, and have become almost as big as our largest investor-owned utility and I believe the largest public power company in the country. And so what started as this incredibly important and sort of selfless act by early settlers here in the valley has now become an incredibly powerful utility company with very, very little oversight or accountability. And so yeah, we’ve been getting involved to try to raise awareness about how people can make their voices heard and the leadership decisions.

John Farrell:

So you have an election coming up for the board of directors, the governing body of this entity. When is this election and who can vote in it?

Charlie Fisher:

Yes, like I mentioned, the SRP is not regulated by the Arizona Corporation Commission. Instead, they are regulated by a series of governing boards and it’s a little convoluted, so bear with me. You have the district, which is the power side of SRP, and then you have the association, which is the water side. They each have their own board. One is called the board of the directors, one is called the Board of Presidents. And then under those boards you have council. And so they work closely with each other and there’s a lot of overlap between board members and council members. You can be both, but essentially the boards set rates for utility and water for rate payers, and they are required to approve any large infrastructure investments, building new power plants, building substations, building large transmission lines, the hardware of the grid that keeps the lights on and keeps things moving.

On the council side, they do more of the internal governance piece. They set rules, they set bylaws, they establish the processes by which the board and the broader utility has to function and operate. The frustrating thing about this is only landowners are eligible to vote in SRP elections. As you can imagine, not everyone who pays for SRP electricity or water owns their property. About 700,000 people, in fact, who are SRP ratepayers rent, which means they are off the bat completely ineligible and voiceless in the direction the priorities and the decisions of their utility company.

John Farrell:

SRP doesn’t really have a great history of energy leadership, although it’s hardly alone among Arizona utilities, which is kind of crazy since you’re basically ground zero for awesome and inexpensive solar energy in the U.S. But SRP has also had some other issues. They were successfully sued for antitrust violations when they slapped high fees on solar customers. The utility recently censured its own board members for expressing opposition to a controversial gas power plant expansion. And on that particular issue, I spoke with Autumn Johnson in episode 174.

Could you just talk about when is this election, how soon do people need to act in order to have a voice? And what do you see as being at stake in this election?

Charlie Fisher:

Great questions, and I’m going to take the most important one first, which is election day is April 2nd. And folks are able to either deliver their early ballot or vote in person at the SRP administrative building up until 7:00 PM on Tuesday, April 2nd. So that is just around the corner. Another really important date here, if you are a Maricopa County homeowner, landowner, you are able to request that they mail you your ballot online up until March 22nd. So we’ve got another week and a half or so where they’ll actually just send you your ballot in the mail and you can fill it out and put it back in the mail. So those are some of the key dates here in terms of the opportunity. This is what is so motivating and energizing for me. A group of folks, you just mentioned them who are clean energy advocates, understood this opportunity much earlier I’ll admit than we did here at Arizonans for a Clean Economy and started with shoestring budgets filing to become candidates for SRP district board and council positions, and then just did grassroots organizing work, created some basic literature and went and talked to their neighbors and their friends, and talked to folks in the community about existing policies and have had incredible success over the last four or six years.

On the district board side, that’s a 14 member body and every two years, seven of the 14 seats are up. So a full half of the body. Over the last two elections, clean energy advocates have picked up five seats on the district board, and there are currently six clean energy advocates running in this April’s election. So if we’re successful and we elect three of those candidates and hold one of the seats that we currently have, we will have immediately changed the majority of the board from one that is very tied to the status quo, to one that is very forward looking and very much prioritizing advocating for rate payers and really pushing management to invest in clean energy and to make it more affordable and more accessible to everybody in their service territory. And just in terms of recent history, it is funny because not that long ago, before 2015, SRP was seen as one of the most solar friendly utilities in Arizona, and that all changed in early 2015 when they repealed their net metering program, added additional demand charges and fees and obstacles to adopting rooftop solar, which shortly thereafter was replicated by the Arizona Corporation Commission and implemented by all investor owned utilities.

So if we’re successful, we pick up three additional seats in April, it’s sort of hard to overstate the change and the improvement, dramatic improvement that we’ll see and hopefully see in SRPs policies towards solar customers. And that’s both, that’s utility scale, that’s community solar, and that’s distributed rooftop solar. Our position is that we should be leading the country in all three areas, and that SRP has a big role to play in that.

John Farrell:

We’re going to take a short break. When we come back, I ask Charlie about what’s at stake in this election and we explore the controversial one acre one vote rule for SRP participants. You’re listening to a Local Energy Rules podcast with Charlie Fisher, Executive Director with Arizonans for a Clean Economy.

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John Farrell:

So it’s amazing where you are. It would be one thing you were just getting started and had to flip the entire 14 member board, but here the results of this election could really change the direction of the utility. But that being said, this utility has some truly bizarre eligibility requirements for participation. Can you talk about how that works?

Charlie Fisher:

Yeah. This is one of the really, one of the most ludicrous pieces, and so I believe I already mentioned, but only landowners are eligible to begin with. The voting territory map for SRP also contains sort of strange splotches where people who live in those areas are only eligible to vote for either the district or the association. And then there are also areas that are ineligible entirely. You can be a landowner, you can be in SRP territory, and you are still ineligible just because of the way that this map is drawn. And there’s very little explanation as to how they came up with these areas. On top of that, for the division based seats, so the way that the district is structured, there are 10 territory specific seats like a congressional or a legislative district, and then there are four at large seats that are elected territory wide.

For the division seats, it’s an acreage based vote, which means, for example, my family, we have a 0.3 acre property in central Phoenix, which means my wife and I each get 0.15 votes in the SRP district board election on April 2nd. John, if you happen to live near me in Maricopa County, and you had 500 acres, frankly, even if you didn’t live there, you still lived in Minnesota but had 500 acres in Maricopa County, you would get 500 votes. And so it is as antiquated a system of representative democracy as I can think of, and certainly needs reform in addition to some of the policies that are currently in place.

John Farrell:

I can imagine that one impact of the way that votes are allocated or voting power is allocated is that it exacerbates existing racial or socioeconomic disparities because if you’re wealthier, if you’re white, you’re probably more likely to be able to own land, which gives you more votes. Has that been something that you’ve thought about, talked about at all in terms of how this voting system works?

Charlie Fisher:

It’s absolutely something that we, along with several other partner organizations here that are focused on raising awareness about this election and increasing participation, have thought a lot about, and you’re exactly right in a system structured this way, intentionally or not, what you’re doing is saying to the rate payers who are – we have a closed utility system here, if that’s the right language, right? Folks are captive. We have monopoly utilities. You don’t get a choice in your provider. That only the most well off of their rate payers should have the right to have an influence on the utilities priorities, decisions, investments. And that absolutely inevitably means that’s going to reflect some of the disparities that you talked about, whether that’s racial, it’s economic, geographic, all of those things are very much at play. And so historically, the folks that know about SRP elections and vote, which is less than 1% of those that are eligible, those people are very, very much tied to maintaining the current system. And so it has led to an SRP leadership structure that is not at all focused on really what’s best for the broad rate payer community and the broader Arizona community, but what’s best for the largest landowners and landholders.

John Farrell:

And the other thing I wanted to ask you about this is that you alluded to in its history that perhaps the reason for the voting structure was that the landowners were putting up their land as collateral to get the initial infrastructure built to allow for distribution of water and power. I’m imagining that that original infrastructure is all paid off by now. So doesn’t seem like there’s a rationale necessarily to keep this division when you have many, many other customers who are paying in through their bills all the time, and that people are paying for their own use based on their own usage at this point. So I guess one of the questions I just have is are there any candidates who are talking about changing the voting structure as part of their candidacy or the SRP board?

Charlie Fisher:

Yeah, there are. I agree with your assessment. I would imagine, without being one of the original landowners myself, that more than 100-year-old collateral has been well paid off by now. Yes, is the answer to your question. There is a team of folks, and actually they’re working together and their website if listeners are interested, is srpcleanenergy.org. And that’s very much one of the reasons that many of them have been motivated to run is the more that you understand about the way that this current system is structured, the more unfair and more obviously unfair it is. And so that slate of folks has said it is one of their priorities to change some of these rules and to change the system that SRP leadership and board members are elected so that we can really make sure that folks who are eligible, whether you own land or you just are an SRP rate payer, that you really do have a voice.

Because I mentioned it a little bit earlier, but although SRP is not regulated by the Corporation Commission, they very much follow each other’s lead. And so in 2015 when SRP repealed their net metering policy, it was just a year later that the Corporation Commission did it. And so from a broader impact perspective, if we have success and the candidates have success on April 2nd and are able to implement friendlier policies to clean energy, the likelihood that that will also impact the investor-owned utility space here is all but certain.

One fun fact, if I can, as an aside, I believe in the 1970s, the SRP election structure was litigated and upheld. I don’t believe that made it to the U.S. Supreme Court. I think it was just at the state superior court level, but it has been litigated. It’s been about 50 years. So I think maybe it’s time to get some attorneys to take a second look. But yes, it is highly unusual and certainly tilts the playing field in favor of large landowner interests.

John Farrell:

So we’ve already talked about what people can do now they can request their ballot if they’re an SRP customer and they own land and can get that quickly or they can vote in person on April 2nd. Is there anything I didn’t ask you about, about what’s at stake here about the structure of the utility, about the kinds of things that candidates are hoping to do? I guess that would be one thing, and feel free to add on if there’s others that you’ve been thinking about. But what are some of these candidates running on? What is it that they’re talking about wanting to do differently? Maybe the election structure would be one piece of this. The governance obviously seems like a big deal here, but what do they hope to change in the way that the utility is run?

Charlie Fisher:

First and foremost is increasing the share of SRPs generation portfolio that comes from renewable energy, but we’re in Arizona, so solar is going to be the primary driver of that. SRP going from one of the friendliest, most pro solar utilities in the mid 2010s or early 2010s now is the least friendly, has invested the least amount of resources in solar energy. And so I know one of the first priorities of the Clean Energy Slate is to roll back some of these demand charges, Interconnection charges, many of the fees and additional costs that have been both retroactively and proactively imposed on folks who’ve invested tens of thousands of dollars in energy security and trying to reduce their own energy costs and be thoughtful. That very much is top of mind here in Arizona.

It sort of just boggles my mind. Coal was a huge part of our generation portfolio a decade ago, and thankfully that number decreases year after year and more coal power plants are scheduled to come offline. Instead of replacing that horrible, dirty, dirty, polluting energy with our single most abundant resource in Arizona, which is 330 days every year, sunshine, we’ve replaced it with natural gas and we have exactly zero natural gas here in Arizona. And so we have now put ourselves in this position where we buy huge quantities of natural gas, mostly from Texas and other southern states, transported hundreds of miles across New Mexico, across beautiful parts of the southwest, to Arizona where we burn it here and pollute our air and damage the lungs of our kids and family members, and then are also completely subject to the wildly fluctuating prices of the natural gas market.

So at a time when the number one concern of Arizonans is rising energy costs and also energy independence and energy security, it makes absolutely no sense for 40% of our energy to come from natural gas when we could power the entire country with the sunshine that hits the ground in Arizona every single day. Our mission as an organization is to make that a reality, to make Arizona a national leader in solar, but also in wind, and geothermal, and EVs, and storage technology. We have all of the ingredients and changing the makeup of this SRP board is one of the first steps in realizing that.

John Farrell:

Well, Charlie, thanks so much for coming on, and on such short notice too, to talk about the SRP elections and the implications for Arizona. I think you paint a very compelling vision that people are going to be interested in following what happens. I wish the clean energy advocates in Arizona the best on April 2nd and hope that it does lead to some change. It would be lovely to see a utility in Arizona and in the sunny Southwest be a real leader in pursuing clean solar energy.

Charlie Fisher:

Absolutely. No, thank you so much, John. And I would be remiss if I didn’t quickly mention folks can also learn more about the SRP structure and the candidates that we are supporting at azce.org/srp. But thank you so much for the time and the opportunity and for focusing on this very obscure, but very, very important election here in Arizona.

John Farrell:

My pleasure. And we will have the link that you just mentioned and other links to related resources that we mentioned during the interview on the show page for the podcast as well. So Charlie, thanks again. Great to talk to you.

Charlie Fisher:

Thank you.

John Farrell:

Thank you so much for listening to this episode of Local Energy Rules with Charlie Fisher, executive director with Arizonans for a Clean Economy. On the show page, look for a link to their website about the SRP election azce.org/srp, as well as links to two previous Local Energy Rules episodes about this public utility that has a struggle to match its public interest: Episode 174 with Autumn Johnson, which touches on the secrecy and hidden decision-making characteristic of the utility. And episode 136 with Jean Su about the landmark antitrust case against the utility’s anti-solar rates. Local Energy Rules is produced by myself and Maria McCoy with editing provided by audio engineer Drew Birschbach. Tune back into Local Energy Rules every two weeks to hear how we can take on concentrated power to transform the energy system. Until next time, keep your energy local and thanks for listening.