A billion dollars is a lot of money even for Salt River Project. And keep in mind SRP’s money is really our money – money from payments you and I make to SRP on our monthly electric bills.
Typically, when a corporation or a utility considers making a million-dollar expense – let alone spending almost a billion dollars – they weigh the upfront and ongoing costs and benefits, and seek competitive bids.
While SRP likely considered various factors related to their proposal to build 16 gas units at a cost of almost $1 billion, the lack of available information and time for stakeholders and customers to provide input is very disconcerting.
Here are our top concerns:
At the price tag of nearly $1 billion, the cost to build 16 gas plants is exorbitant.
Particularly disturbing is the lack of public information that exists about the total projected cost including fuel and maintenance; total estimated groundwater consumption – which could affect availability and increase water costs for farmers, businesses, and consumers; and impact on the monthly electricity bills of SRP customers and over what period of time.
The need for more power capacity may be overstated while the options to increase energy efficiency, and renewable resources, such as solar, may be understated.
Without SRP adequately and publicly providing information, it is hard to know the various factors and scenarios they contemplated and whether their forecasts are realistic.
However, due in part to its negative contribution to climate change, we know that new gas builds are becoming obsolete, which means gas plants and units may be left stranded with SRP customers needing to absorb the cost.
And we know that SRP did not request competitive proposals from industry that might have led to a more climate-friendly resource at less cost to SRP ratepayers.
A rushed decision on an item of this magnitude is likely to result in a flawed decision. SRP’s 2035 Sustainability Advisory Group consisted of business, academic, governmental, environmental, and consumer leaders and was arguably one of most robust, data-driven, comprehensive stakeholder processes in which I’ve been involved.
However, the widely-acclaimed and inclusive process that advanced overall sustainability goals has since reversed course.
A stakeholder meeting where minimal information was first presented about the proposed purchase of additional gas units was held 24 hours before a SRP Board committee vote. Many SRP customers are likely still in the dark about this gas expansion proposal and its potential impacts.
The full SRP Board is expected to vote on the proposed construction of 16 gas units at a cost of almost $1 billion to SRP customers on Sept. 13 – only three weeks after SRP management recommended this move, and with numerous and significant details still lacking.
Although many of us can’t relate to spending that amount of money, we are familiar with the benefits of scrutinizing, getting input, and deliberating before making a major expenditure. SRP needs to approach this decision like you and I would approach a major purchase.
After all, it is our money.
Diane E. Brown is the executive director of the Arizona PIRG Education Fund, an organization that conducts research and advocacy on issues in the public interest. Reach her at firstname.lastname@example.org.
-Diane E. Brown, Executive Director