Impact of 50% Renewable Energy Portfolio Standard Under Prop. 127

October 23, 2018

Policy Analysis

October 23, 2018


Impact of 50% Renewal Portfolio Standard Under Prop. 127

By Dave Wells, Research Director

Executive Summary

Proposition 127, The Clean Energy for a Healthy Arizona ballot initiative, would require utilities regulated by the Arizona Corporation Commission (ACC)—Arizona Public Service (APS) and Tucson Electric Power (TEP) most prominently—to get half of their electricity from renewables by the year 2030.  The current requirement in Arizona is 15 percent by the year 2025, which APS has already achieved.  If Arizona plans to make a proportional effort to mitigate the impact of Climate Change, the current portfolio standard needs to be dramatically upgraded.  The question for Arizona voters is whether Prop. 127 is a desirable path to do so.

On Oct. 8, 2018, the Intergovernmental Panel on Climate Change reiterated the urgency of climate change and recommended that the renewable share of electricity reach at least 48 percent, nuclear power be maintained, and coal largely eliminated by 2030 to limit global warming.[1]

Climate change is expected to make the desert regions of Arizona significantly hotter and less hospitable in the years ahead.  The number of days in which Phoenix went above 110 degrees in the last century has averaged 12 days.  During the 1981-2010 period it rose to 18 days.  In 2017 Phoenix hit 25 days at 110 degrees or higher. That repeated in 2018. By the end of this century, scientists project it will be 91 days with half of them above 115 degrees.[2]   Agriculture will suffer declining yields, heat-related morbidity will rise, energy consumption for cooling will rise, and the area will become less attractive to more mobile, educated workers and less attractive to tourists and retirees.  Home values could stagnate or decline.  One climate study suggests that by the year 2090, there is a 95 percent chance that Arizona’s economy will no longer experience any real economic growth and will begin retracting.

So is Proposition 127 the answer?

A barrage of information has besieged voters—leading to confusion as noted by Arizona Republic Left-Learning Columnist Laurie Roberts:

Whose studies do you believe?

So, what’s a voter to do?

Here is my best advice: believe no one.[3]


Her Right-Leaning counterpart Bob Robb echoed similar sentiments:

Here is the weight that voters should put on the studies by the pro side: zero.

And here is the weight voters should put on the studies by the anti side: zero.[4]


Voters have been subjected to claims from APS that their utility bills will rise at least $1000 or double by 2030, while the Prop. 127 representatives counter that utility bills will slightly decline.

Unlike either campaign, the Grand Canyon Institute (GCI) does not have a position or stake in the initiative.[5]  Proponents of the initiative will be pleased to find that GCI has found claims that electric bills will rise an exorbitant amount insufficiently substantiated. APS and the No Campaign have focused on using fear as a motivator and used high-end unlikely cost estimates for compliance and purposely chosen to compare them to today’s bills without adjusting for inflation or what bills would be under an APS business as usual scenario.

Proponents of the initiative put together a mandate backed up with dynamic energy modelling where everything comes together well and no snags are hit.  California is a laboratory on the issue as they have a more aggressive Renewable Portfolio Standard (RPS) and are making such good progress at meeting it, that they keep raising the bar.  California also has a more diverse set of renewable energy sources than Arizona, especially wind and geothermal. [6] In addition, though Arizona has hydro—existing hydro is precluded from counting toward the RPS by the initiative. California adopted their RPS by legislation initially in 2002 with the latest update with Senate Bill 100 this year.[7] California now plans to reach 33 percent renewable by 2020, 50 percent by 2026 and 60 percent by 2030 with a 100 percent clean standard by 2045 (nuclear and carbon capture gas would be examples of clean sources outside renewables).  California has consistently altered its RPS by legislation.  Consequently, a diverse set of stakeholders were involved in the process and adjustments can be made without going to voters. [8]

Arizona’s Prop. 127 was developed by renewable energy advocates and is a Constitutional amendment which will be voter protected if passed, meaning if compliance issues arise, then the only way to address it will be by amending the proposition with voter approval, a slower, more cumbersome, less certain process.

Greenhouse gas emission savings depend largely on how the variable nature of solar and wind are dealt with in an expanded grid. Closing Palo Verde, as APS has suggested would occur, would seriously undermine that goal, while ceasing all use of coal sooner would enhance it. GCI does not find closing Palo Verde likely.  However, when gas generation moves from base power to peaker its emissions get modestly worse, meaning some emissions benefits of solar will be lost depending on the degree to which gas generation moves from a base to a demand-matching (peaker) component of the electric portfolio.[9]

Other options exist beyond Prop. 127. The Arizona Corporation Commission (ACC) is a constitutional branch of government tasked with regulating the activities of public service corporations.[10]  Regulations over rates and charges of public service corporations place entities such as APS and Tucson Electric Power (TEP) subject to the ACC approval process for any changes in sources of energy and how customers pay for the energy.  Entities like SRP, the City of Mesa and other municipal electric utilities rely on their own governing boards/councils to identify what energy sources to use and customer rates.  Enhanced RPS or clean energy standards can be sought at these governing body levels, which is how Arizona’s initial RPS was adopted.

ACC Commissioner Andy Tobin has his own plan, favored by utilities, to reach 80 percent carbon-free by 2050, which includes nuclear and conservation measures. Likewise, some of the candidates running for the ACC are running on a solar-focused agenda and many observers suspect that if combined with current commissioner Bob Burns, they could form a majority to develop a more aggressive timetable than what Commissioner Tobin has proposed.

GCI has not taken a position on Prop. 127.  However, two GCI board members have taken public positions in favor of it.  Chris Herstam and Susan Gerard both have statements in the ballot information pamphlet in support of the initiative.  Susan Gerard is also serving as co-chair for the initiative.  Due to that conflict of interest, they have recused themselves from reviewing  the analysis presented in this document.

While millions of dollars on both sides are being spent on this initiative, GCI has not been paid for this analysis of Prop. 127, and GCI has no financial interest tied to the initiative.

The research process has included analyzing information from:

  • “The Economic Impact of the Clean Energy for A Healthy Arizona Proposal on Arizona’s Economy, 2018-2060,” published by the Seidman Research Institute at Arizona State University on March 19, 2018.
  • Energy planning documents available from APS and Tucson Electric Power (TEP) as well as the Arizona Residential Utility Consumer Office, Natural Resources Defense Council (NRDC)l, and U.S. Energy Information Administration and many others.
  • Meetings, calls, or correspondence with Professor Tim James who oversaw the Seidman Research Institute study, Dylan Sullivan-a policy adviser with the NRDC and the Yes campaign, as well as two other ASU researchers who specialize in this field and are on different sides of the initiative, Wesley Herche (for) and Peter Rez (against).


Efforts to work more closely with the No campaign in the research process were largely unsuccessful.


The question for voters is not whether the current renewable standards requirement of 15 percent by 2025 needs to be improved, but whether or not this initiative is the most reasonable means to do so, including the use of a voter-protected initiative compared to citizen involvement in the ACC process or Board meetings for their respective utility providers to reduce carbon-emitting sources of energy.

[1] Intergovernmental Panel on Climate Change (2018), “Global Warming of 1.5o C: Summary for Policmakers,” Oct. 6, p. SPM-19,

[2] Loomis, Brandon (2017), “Phoenix’s heat is rising—and so is the danger,” Arizona Republic, October 18, 2018 high temperatures at Accuweather, (4 in June, 14 in July and 7 in August).

[3] Roberts, Laurie (2018), “APS has 488 million reasons to vote against Prop. 127. I only have one,” Arizona Republic, Oct. 8,

[4] Robb, Robert (2018), “The Prop. 127 debate is all wrong. Here’s a better way to evaluate the renewable energy mandate,” Arizona Republic, Sept.30,

[5] That won’t prevent campaigns from dismissing our analysis for reasons unrelated to its substance, however.

[6] California Energy Commission (2018), “Renewable Energy-Tracking Progress,” July,

[7] California Energy Commission, “History of California’s Renewable Energy Programs,”

[8] Roberts, David (2018), “California just adopted its boldest energy target yet: 100% clean electricity,” Vox, Sept. 10,

[9] MacKinnon, Michael A., Jacob Brouwer, and Scott Samuelson (2018), “The role of natural gas and its infrastructure in mitigating greenhouse gas emissions, improving air quality, and renewable resource integration,” Progress in Energy and Combustion Science, 64 (January), pp. 62-92,