Utility-Backed Candidates and Undemocratic Oversight Create Obstacles to Arizona’s Transition to Clean Energy

This story is published as part of Covering Climate Now, a global journalism collaboration strengthening coverage of the climate story.

A recent Arizona primary election sheds light on the entrenched power of the state’s utilities, with critics worried that more state representatives may work at the behest of the utilities instead of focusing on much-needed reforms to accelerate Arizona’s move towards renewable energy.

In the state’s Democratic primary in July, a corporate utility-backed former lobbyist eked out a victory over a proponent of green energy, ratcheting up the stakes in the push for a clean energy agenda in the coming legislative session as Democrats try to win a majority in the statehouse this fall.

If they do, progressive Democrats are eager to introduce legislation that would reign in the power of utilities in the state, with bills targeting political spending by utility companies and repealing statutes that restrict state agencies from participating in greenhouse gas emission reduction programs, Nick Arnold, the Arizona state director of Climate Cabinet, which works to get green energy advocates elected, said in an interview.

If utility-backed candidates take those seats, green energy advocates worry that these progressive priorities might not get the votes they need to pass.

In Arizona, voters elect two representatives to the statehouse from each legislative district. In District 8 near Phoenix (including North Tempe), Democrat Janeen Connolly — who has lobbied on behalf of utilities and received campaign funding from the oil and gas industry — beat fellow Democrat Juan Mendez, one of the clean energy candidates, by just a few hundred votes in the July primary. As a state senator, Mendez had co-sponsored the bill to address political spending by utilities. Although Republicans had long represented the district, Democrats flipped both seats in 2022. 

Conolly was a registered lobbyist for the Salt River Project (SRP) — the state’s second largest power provider and a not-for-profit public utility unregulated by the Arizona Corporation Commission (ACC) — from 2007 –21. She has received campaign donations from a bevy of political action committees and other industry interests, including Southwest Gas AZ PAC; Realtors of Arizona; Pinnacle West PAC, which is the holding company of Arizona Public Service (APS) Company, the state’s largest utility; and the Salt River Project Political Involvement Committee.

Utilities in Arizona have long resisted adopting renewables. At a hearing at the end of 2023 about a proposed rate increase, an expert witness for APS said he agrees with the idea that “large utilities oppose customer-sided energy policies because they cut into shareholder profits,” according to KPNX News in Phoenix.

Despite being one of the sunniest states in the country, Arizona falls behind other states in solar energy production, generating only 15.4% of its electricity from solar, compared to states such as Nevada (38.2%) and California (46.6%), according to Choose Energy.

Clean energy advocates argue that SRP — which provides water and electricity services to ratepayers in Central Arizona — uses antiquated voting laws that disenfranchise people living in rental property from having a voice in both setting rates and pursuing a shift to renewable energy.

“The SRP board sets the rates, decides on policies for energy sources, and approves all bonds for capital improvements. SRP is a self-governed entity and answers to no one,” wrote AnnElise Makin in The Mesa Tribune.

Activists are making a concerted push to change how utilities like SRP are governed so that they more actively pursue a clean energy transition and are held more accountable for their decisions.

SRP Clean Energy, which backed a slate of candidates in the most recent SRP board elections, works to prioritize climate issues and advance the use of sustainable clean energy while keeping rates affordable.

Although utilities can’t spend money to influence the state’s regulatory body, the ACC, “they can and do give to legislative candidates through PACs and employee contributions,” said Stephanie Chase of the Energy and Policy Institute, a watchdog group that tracks fossil fuel interests. “That’s one way that the utilities are maintaining their power in Arizona.”

Pinnacle West spent $38 million in 2019 to defeat a ballot initiative that would have required Arizona’s electric companies to get half their supply of electricity from renewable sources over the following decade. Working with its utility company, APS, it has expanded its efforts to “influence the elections of its own regulators, defeat a clean energy ballot measure, lobby state legislators, and fund charitable groups to help achieve its political goals,” according to the Energy and Policy Institute.

“It is the [SRP] board’s job to ensure that SRP’s actions are in the public interest as well as its own,” said Lauren Kuby, who unsuccessfully ran for an SRP board seat in the spring, but subsequently won a primary race for state senate.

But the antiquated structure of SRP — which allocates voting rights based on land — creates a major obstacle to meaningful public oversight. Although the utility doesn’t collect data on how many of its users live in rental property, roughly 49% of ratepayers are not able to vote in SRP elections, according to Randy Miller, an SRP board member and outspoken advocate of renewable energy.

And in addition to disenfranchising half of the utility’s ratepayers, this system also presents another downside: achieving the clean energy transition that advocates say is critical to ensuring climate justice.

If Kuby wins in November, she plans to introduce an omnibus bill that will bring much-needed reforms to SRP’s elections, where there have long been significant barriers to voting — even for the narrow constituency that is allowed to vote.

“The lowest-hanging fruit will be to require that SRP send ballots to all ratepayers in eligible voting areas, hold elections on consolidated election dates, and expand the number of voting centers and ballot drop-off locations,” Kuby said.

“If Democrats have control of the Legislature and the above priorities are brought to votes, it will be very interesting to see how members like Janeen Connolly, Alma and Consuelo Hernandez, and other members who are close to these [utility-backed] PACs vote,” said Arnold of Climate Cabinet.