Power infrastructure: Arizona CC


State Commissioners

Fortnightly Magazine - June 18 2024

Ten Commissioners discuss their concerns about electric power infrastructure.


PUF's Paul Kjellander: What are the most important needs for the electric power infrastructure?

Commissioner Lea Márquez Peterson: Arizona is interesting because we are growing so rapidly. We're one of the fastest growing states in the country.

We have aging infrastructure that needs to be replaced and then the need for more transmission. We've had some controversial issues related to new lines coming into our state over the past several years.

PUF: What are the greatest concerns with infrastructure and for dealing with that?

Commissioner Lea Márquez Peterson: In our case, related specifically to transmission, it's NIMBY. Nobody wants that built into their backyard. We have a transmission line case called SunZia — probably a lot of people are familiar with it — that took a decade-plus to get approval.

I was on the Commission when we approved it. It's now being appealed by some of the tribal nations in the area.

When you negotiate the right of way based on the energy load needed in the state, but then look at the human and environmental impacts, it becomes a controversial issue to try to develop and fund transmission lines in a timely manner. We have a challenge with transmission across the west and that is top of mind for us in terms of infrastructure in Arizona.

PUF: As you look at all the other projects that need to be developed, it does put more of an emphasis on the need to build new transmission.

Commissioner Lea Márquez Peterson: Right. We started with how fast Arizona is growing and we have data centers, semiconductor industries, chip manufacturers; so many that want to grow and build in Arizona. We can build as much generation as makes sense.

We have a lot of third-party developers coming to the state. Transmission is an opportunity to bring in wind from New Mexico or hydropower from the northwest and so on. But we need more transmission lines to do so.

EEI Annual Meeting 2024 - June 18-20

The Western Electricity Coordinating Council, WECC, has produced a map that shows proposed transmission lines in the near future and further out. I'm watching those to see where activity is occurring.

When you consider how many players are participating in the development of transmission lines, it is a complex issue. Then you layer on the community reaction and the environmental reaction. We're facing quite a challenge.

PUF: How should utility regulation respond or adjust to the needs and concerns in Arizona?

Commissioner Lea Márquez Peterson: It's communicating and educating the public. Why are we talking about transmission? What is that for? How does it serve Arizona?

Because we're right next to California and Arizonans are sensitive to being a pass-through state to reach the biggest market, California. That's not the case. We are growing rapidly too and need a lot of that energy load to come to our state.

It's educating and communicating with the public. It's working with local jurisdictions and our state legislators, so they know why this is occurring and what the need is. Those are important priorities.

PUF: A part of communication is that all these infrastructure needs have a cost. A piece of the puzzle is explaining why costs will rise.

Commissioner Lea Márquez Peterson: That's certainly a piece. Our priorities in Arizona are energy reliability and affordable utility rates. Most states are focused in that direction, as well as their various clean energy mandates.

Whether explaining to elected officials or the public, we need to describe what encompasses flicking that light switch on the wall, all the components to ensuring energy reliability, and how Arizona is faring.

We don't have natural gas production and have a couple of coal plants that are closing soon. We have lots of solar and battery coming to the state. We're improving natural gas peakers. We're doing as much as quickly as we can to ensure reliability.

We don't want to see rolling blackouts like our neighbor to the west in California. What else can be done? Part of that is transmission and what is that going to cost? Again, educating the public and local elected officials on what's happening.

PUF: Into the 2040s, how different do you think the electric power infrastructure will be?

Commissioner Lea Márquez Peterson: That's an interesting question. I'm attending an AI workshop at this conference. It seems like there're a lot of rapid changes.

Maybe we won't be as dependent on transmission by having small modular nuclear, if that occurs in ten or twenty years. I don't know the time frame; we're all determining what's affordable.

Because that would be in the community or onsite, that would change some of the infrastructure needed. It could look quite different.

PUF: As you think about infrastructure needs, how does it compete with concerns about affordability?

Commissioner Lea Márquez Peterson: It absolutely fits together, but again, it comes back to education. It's almost easier to explain aging infrastructure in the water industry, which we also regulate. We need to replace the wells and pumps and that's going to impact your utility bill.

EEI Annual Meeting 2024 - June 18-20

On the energy side, it's so broad. There are the grid, substations, distribution and transmission lines, and generation. You've got these different pieces, but a homeowner is thinking, "What does this have to do with me? You're fueling Intel in the future."

No, this is interconnecting all our homes, businesses, and so on. Again, I think it's education and communication.


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