Arizona Eagletarian

Arizona Eagletarian

Sunday, June 22, 2014

Why can't COAL compete with SOLAR and WIND without taxpayer subsidies?

In a June 19 Arizona Republic story about Corporation Commission candidates Lucy Mason and Vernon Parker calling out Arizona Public Service and its parent Pinnacle West, we learn about allegations that FOR PROFIT power utility officials are trying to select their own regulators by influencing the election upcoming election.
Vernon Parker and Lucy Mason wrote a letter to APS CEO Don Brandt this week saying that donations to their opponents would be inappropriate because the elected officials would regulate the utility if they win their races.
"It is our opinion that it would be highly inappropriate for APS or its parent company Pinnacle West (Capital Corp.) to influence the elections of its regulators in any way," they wrote.
Mason and Parker cite an independent committee named Arizona 2014, which sent a recent mass email soliciting donations for Republicans Tom Forese and Doug Little, who also are running for the two open seats on the five-member commission.
Mason and Parker want to know if APS or its parent company, Pinnacle West Capital Corp., are funding the committee.
The independent expenditure committee is chaired by Max Fose, president of the IWS advertising agency, according to records filed with the Secretary of State.
It would be illegal for Forese and Little to coordinate with such an independent committee, however, the committees can campaign on behalf of candidates, or in opposition of others, without the candidates' cooperation. Forese and Little's campaign spokesman declined to comment for this story. [...]
Mason and Parker have staked out a position on rooftop solar that is contrary to APS. 
This is unseemly and may or may not be illegal. But it's certainly improper. It's also nothing new. In 2013, APS was caught bribing Democratic state lawmakers Catherine Miranda and Robert Meza with tickets to an Arizona Democratic Party fundraiser. Arizona 2014 was also tied to election campaign mailers (more than a year prior to the election) for Miranda and Meza as thanks for their votes for a bill that was signed into law extending (expanding) polluter protections related to utilities.

Miranda, is currently in a contested primary election campaign against military veteran Aaron Marquez. Robert Meza is running for reelection. His domestic partner, Mike Snitz, sued in a very awkward effort to disqualify Ruben Gallegos from the ballot in the Democratic primary for the 7th District seat in Congress. Gallegos' opponent, Mary Rose Wilcox acknowledged publicly that Snitz did so on her behalf and with her full support. The lawsuit immediately blew up in Snitz' and Wilcox's faces.

I digress.

From the Republic story cited above, and from my May 2013 blog post, the connection of Republican political operative Max Fose and his IE, Arizona 2014 seem quite apparent.

But, what does all this have to do with COAL needing to be subsidized in order to continue competing with emerging disruptive technological innovation (solar and wind electricity generating capacity) in our state?

As it turns out, Arizona taxpayers take a DIRECT hit by a 30 percent reduction of the transaction privilege or use tax paid for the coal used by IOUs (investor owned utilities). Arizona Revised Statutes § 43-1178 states,
A. A credit is allowed against the taxes imposed by this title for a taxpayer that purchases coal consumed in generating electrical power in this state. The credit is equal to thirty per cent of the amount paid by the seller or purchaser as transaction privilege or use tax with respect to the coal sold to the taxpayer.
And in case that's not a sweet enough incentive on its own, subsection C allows the credit to be carried forward for five years.
C. If the allowable tax credit exceeds the taxes otherwise due under this title on the claimant's income, or if there are no taxes due under this title, the amount of the claim not used as an offset against income taxes may be carried forward to the next five consecutive taxable years as a credit against subsequent years' income tax liability. 
So, the next time you hear some hack (or any uninformed citizen) claiming solar and wind can't stand on their own without government subsidy, feel free to show them this.

Additionally, taxpayers and citizens pay an even higher price because the costs of environmental damage (not limited to global warming ramifications), such as pandemic respiratory distress, are borne by the people who are stricken with lung cancer, asthma, emphysema, chronic bronchitis and other related ailments.

So why, again, is it that COAL fired electricity generation can't compete on its own without massive subsidies from Arizona taxpayers?

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For kicks, check out this technological innovation that has the potential to make a big difference, even if not in Arizona.

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