By Kennedy Maize
Washington, D.C., May 29, 2010 — File this in the “empty threat” folder: Gary Pierce, a member of the five-person, elected Arizona Corporation Commission, the state’s utility regulator, has suggested that Arizona should block a move by the city of Los Angeles, Calif., to boycott the Grand Canyon State by cutting off electric power from plants in the state that flows to the Golden State.
In a letter to Los Angeles Mayor Antonio Villaraigosa, Pierce, Republican on the ACC elected in 2006, wrote, “If an economic boycott is truly what you desire, I will be happy to encourage Arizona utilities to renegotiate your power agreements so Los Angeles no longer receives any power from Arizona-based generation.” Los Angeles officials, in a heavily Hispanic city, were publicly outraged (no surprise there) at a new Arizona law giving state authorities power to detain suspected illegal immigrants. Several California cities, including LA, said they would boycott Arizona in response to that state’s new law.
The LA city council voted13-1 to deny Arizona and businesses based in the state commerce with the city. The measure obviously has no effect on the city’s citizens and their economic decisions of where to spend money and time.
But Pierce, with what appears to be manufactured outrage, threatened the power outage. “I feel like if you’re going to boycott the candy story, you’ve got leave all the candy alone,” Pierce told the Arizona Republic. “I feel like Arizona is the candy store.” LA gets a quarter of its electric power from power plants located in Arizona, notably the three-unit Palo Verde nuclear plant.
But there’s a real problem with Pierce’s argument, and as a veteran ACC member, he should (and probably does) know this. California utilities own shares of the Arizona generating plants commensurate with their take from the plants. Neither the state’s utilities (Arizona Public Service and Salt River Project, mostly) nor the ACC have any control over the power that flows to California.
Palo Verde’s owners include Southern California Edison (15.8%), Southern California Public Power Authority (5.91%) and Los Angeles Department of Water and Power (8.7%). The California utilities don’t buy the power. They take it according to their shares and share commensurately in the costs.
In other words, Pierce was bluffing (and I’d bet he knows it).
Others, faced with the preposterous position of Pierce, have suggested that Arizona refuse the transmit the power over the high-voltage power lines running into California. That long-distance dog won’t hunt, either. The power lines are jointly owned, and the ACC has absolutely no jurisdiction over them. They are in interstate commerce and regulated by the Federal Energy Regulatory Commission.
Pierce’s gambit came in for lots of criticism in Arizona. Republic columnist E.J. Montine wrote that Pierce “wanted to deliver a kick in the pants. Unfortunately, like many politicians before him his foot wound up in his mouth.” Montine concluded that the Pierce flap “proves, once again, that the only unregulated source of energy in Arizona is hot air.”
Phoenix New Times blogger Steven Lemons commented, “But here’s a little tidbit for those anti-boycott nudniks out there salivating at the fantasy of cutting off L.A.’s electricity: Currently some 60 percent of Arizona’s gasoline comes to us via Watson, California, located in Los Angeles County.”