Why Arizona Power Companies Asked Customers To Conserve Energy
MARK BRODIE: Record-breaking heat is leading to record-breaking demand for electricity, and both are expected to continue this week. [The week of Aug. 16, Arizona Public Service (APS), Salt River Project (SRP) and Tucson Electric Power (TEP)] all asked customers to conserve power, even if that meant raising their thermostats during peak hours and peak heat. In California, utilities have resorted to rolling blackouts, prompting utility regulators here to seek more information about our preparedness across the state. The Arizona Corporation Commission met [Aug. 21]. And with us now to tell us more about what they learned from the utilities is Ryan Randazzo with the Arizona Republic. Hey, Ryan.
RYAN RANDAZZO: Good morning.
RANDAZZO: I think so. The utilities came in and they conceded that was an unusual thing for them to ask of customers last week. Arizona utilities had not asked their customers to voluntarily curtail their energy use since 2004, when there was a really critical piece of equipment that exploded and limited how much power you could bring into the Metro Phoenix area. So they explained that they had plenty of resources available, but they are just being extra cautious because all of the power in the West was being used and there was nowhere for them to turn if one of their power plants had a glitch and went offline and they needed to buy energy on the market to keep up the supply for their customers.
BRODIE: Now, Ryan, it seemed like there was some concern about whether utilities were in fact selling energy to places like California. What did we learn about that?
RANDAZZO: Well, the utilities in the West all share resources. So if it's a mild day in Arizona but California needs the electricity, then, then they buy and trade power. They do it on a day-ahead market and they do it on an hour-to-hour market. And their trading floor looks something like Wall Street where they're, you know, trying to predict how much electricity their own customers are going to need in the next hour or two hours and five hours. And then they're looking at the other utilities who, who might need that power. And then they're dispatching, you know, their most economical power plants to meet that demand. So the utilities are constantly buying and selling and trading power among themselves. What happened last week is there was just no availability. All of the power plants in the region that were available were being put to use and there was just no extra capacity. And so the Arizona utilities said, "Yes, we, we were buying and selling until it became critical and we didn't have any reserves. And then we stopped, because we have to serve our own customers first and, and not help other utilities in those sort of critical moments."
LAUREN GILGER: Ryan, SRP's situation has been a little bit different. They asked customers conserve energy under different circumstances after they had some equipment damaged by one of the wildfires that's happening right now. Does this year's fire season pose a significant threat on top of these record-heat temperatures that we're seeing?
RANDAZZO: Yeah, the wildfires actually are the biggest concern that the utilities had during that [Aug. 21] meeting just because they're unpredictable and they can take out the big transmission lines that bring power from, say, large coal plants up in the Four Corners region into Phoenix and Tucson. And there's just not a lot of alternatives. And that's what happened on [Aug. 19] last week. So Salt River Project at first did not join the other utilities in asking for customers to conserve. They had plenty of power available and didn't see a concern. And then the Salt Fire out by Roosevelt Lake on [Aug. 19], the dense smoke from that fire — and all wildfires — can cause big transmission lines to arc and then go offline. And that's what happened. So that cut off Salt River Project from all of the electricity from two coal plants that it owns up in, in Springerville and St. John's. And they didn't have a blackout, which is surprising because that's a lot of electricity that they lost access to. But when they lost that power line, they did then volun — ask customers to voluntarily turn up their thermostats to prevent having to go into rolling blackouts like happened in California.
BRODIE: Ryan, before we let you go, briefly, I want to ask you about something that happened at APS last week. Jessica Pacheco announced that she was leaving the utility. And hers is a name that folks who follow APS will probably recognize. But for many people who may not, they might not know who she is, but she had a pretty significant role at the utility over the years. Tell us a little bit, a little bit about why her departure matters.
RANDAZZO: Well, people who do pay close attention know that Jessica was instrumental in APS and its parent company, Pinnacle West Capital, getting involved in the elections of corporation commissioners. That's something that the utility for a long time had an internal policy that they would not contribute money to the campaigns of people who turn around and set the rates at the electric utility. That changed when APS was having this giant public relations battle with rooftop solar companies. And Jessica was a key figure in helping the utility get involved through dark money organizations and to support candidates that they thought would be favorable to the utility. So her departure is sort of a signal, some people are taking, that APS might actually hold to its word and not get involved in those elections like it had previously, because it's faced so much backlash for for doing that.
BRODIE: All right. That is Ryan Randazzo with the Arizona Republic. Ryan, as always good to talk to you. Thank you.
RANDAZZO: Thanks a lot.