AARP opposes deregulation of electric utilities in Arizona

July 22, 2013
The Arizona Republic
Ryan Randazzo

AARP has jumped into the debate over deregulating electric utilities in Arizona by filing comments opposed to the change with state regulators.

The Arizona Corporation Commission is reviewing the issue this year, accepting public comments on the matter, and likely will take it up in the fall.

In a deregulated utility market, customers get to choose who provides their electricity. Today in Arizona, a customer's power provider is determined by territories marked on a map, with no choice.

In a deregulated market, the local utility with the wires connecting to a customer's meter still delivers the power, for a price, but customers can choose to buy their kilowatt-hours from someone other than the local utility.

AARP, which played an influential role in altering the last APS rate case, said that deregulation is not needed, and the cost of setting up such a complicated system alone would raise rates on customers, since they pay all expenses for utilities.

"Deregulation won't mean lower rates, it may mean paying more for power for many Arizonans," David Mitchell, AARP Arizona director, said in a statement. "This is evidenced by many people in deregulated states paying higher rates for their electricity after deregulation. Arizona's residential electrical rates are already below the national average. With our hot temperatures, why gamble with the pocketbooks and safety of Arizonans through deregulation? In our state we've never suffered a shortage of electrical generation and our low utility rates are attractive to businesses."

Arizona began planning utility deregulation in the 1990s, about the same time other states were attempting to open up their markets. The effort was killed by a judge’s decision in 2004 but could see new life.

Arizona's deregulation efforts lasted several years, with utilities bracing for competition and forming separate companies to market electricity. But shortly after the first large utility customers began to select their electricity providers, the effort was shut down.

The Goldwater Institute is supporting deregulation, as are companies involved in other deregulated markets such as Texas.

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