Arizona has not enjoyed the warmest relationship with renewable energy. The state’s renewable energy standard is among the lowest of all US states and its utility industries invested millions recently to beat back a more aggressive goal proposed by advocacy groups led by Tom Steyer. Ironically, in neighboring Nevada, voters approved a renewable energy standard very similar to the one Arizona rejected with very little drama.
So it is encouraging to hear that the University of Arizona and Tucson Electric Power have reached an agreement that will see the school get 100% of its electricity from TEPCO by late next year or early the following year. The utility is presently constructing a wind farm in New Mexico and a solar power plant with battery storage southeast of Tucson. A portion of the electricity generated by those two facilities will be used to power the U of A campus, making it the largest research university in America to rely exclusively on renewable electricity. It will still depend on natural gas for some of its other energy needs. The deal was approved unanimously this week by the Arizona Corporation Commission.
The deal means the school will pay slightly more for its electricity than it does now, so what’s in it for the university? Long term price stability. The 20-year power purchase agreement will insulate the school from any future increases in utility rates, which can fluctuate widely over any given period of years.
TEPCO spokesperson Michael Sheehan tells Arizona Public Media the university will pay all the costs of switching to renewables. “The rates will will go up slightly, but what they get out of this is, over a 20-year period they have a large portion of their energy rate fixed related to the fuel supply that the company would otherwise have to generate.”
Sheehan may not be the most articulate spokesperson ever but you get the point. For people who manage large amounts of money, stability and predictability are sometimes more valuable than getting a rock bottom low price that could change in a heartbeat if something destabilizes the price of a fossil fuel like natural gas.
ACC commissioner Lea Márquez Peterson voiced mixed feelings about the deal, but voted for it. “I do want to applaud to University of Arizona for their commitment and to the renewable energy goals. I’m a bit concerned as a tuition-paying parent what the impact will be on the student body, but I think in our role as commissioners this is a utility contract by two willing partners that serves the goal,” she said.
One thing the commissioner might want to keep in mind is that her child is learning the value of renewable energy, a lesson that will abide for a lifetime and probably impact certain choices that student makes in the future. Not every benefit of education can be quantified in monetary terms.