8/2/2019 Arizona Westside Irrigation & Electrical Districts Position on Chu Memo - 4/18/2012

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Arizona Westside Irrigation & Electrical Districts 

Arizona’s Westside Districts Question New DOE Directive 

The Arizona Westside Districts join other electric consumer organizations in expressing serious

reservations about a new Secretary of Energy memo dated March 16, 2012, directing the Federal PowerMarketing Administrations (PMAs) to facilitate several new initiatives, including the integration of 

“variable” energy resources via an energy imbalance market (EIM), new energy efficiency and demand

response programs, electric vehicle deployment, and serving as a “test bed” for cyber security research.

“As we read Secretary’ Chu’s vision for the PMAs, it would deviate materially from the PMAs statutory

mission, add new layers of bureaucracy and costs to consumers, and could adversely affect regional

electric reliability,” said Westside spokesman Jay Moyes. Westside acknowledges that the memo is very

general and leaves many questions unanswered. Among those questions are whether the PMAs have

authority to implement such divergent, mission-expanding undertakings. “We firmly believe that any such

initiatives must be consistent with the PMAs’ authorizing statutes,” said Moyes.

Westside fears that while the initiatives may have theoretical policy merit from the perspective of some

advocates, they could entail huge costs to consumers. The DOE memo’s assertion that the PMAs will be

able to achieve such ambitious objectives as a PMA-wide EIM “while at the same time reducing costs to

consumers” is highly unlikely according to preliminary analysis by independent economists.

The Western Area Power Administration (Western) is apparently the first target PMA under the

Secretary’s plan. Westside believes it is a foregone conclusion that implementing the EIM directive in

Western’s service territory would necessarily lead to the imposition of an RTO-type mandatory market

and transmission organization, bringing with it major new costs to Western’s customers, as has been the

experience of consumers in several other RTO / centrally managed market jurisdictions. “Such added

costs should not be imposed without reciprocal benefits to those paying the costs. We are very concernedthat these initiatives are not supportable by independent cost/benefit analysis,” said Moyes.

Westside Districts’ consumers – who ultimately bear a share of Western’s costs -- are largely agricultural

and provide the economic base of many rural Arizona communities. These proposals would likely have a

significantly adverse economic impact on Arizona farms and rural economies and their dependent

supporting businesses and jobs, and could impede the already struggling general economic recovery.

“Our districts routinely work with our partners at Western and with the other owners of transmission

facilities in the geographically vast desert southwest integrated grid to maintain and improve reliability

and efficiency,” Moyes said. “Western’s system already works well in conjunction with federal

hydropower to accommodate variable resources. The administration’s plan to impose complex and costlynew federal requirements on that system should be halted by Congress, pending additional information,

including peer-reviewed, independent analysis and consumer cost-benefit justification.”

The Arizona Westside Districts is an informal coalition of thirteen agricultural districts in Maricopa, La

Paz, Pinal, and Yuma Counties that contract for multiple resources, including federal hydro-power

primarily from Hoover and Glen Canyon Dams, owned and operated by the U.S. Bureau of Reclamation.

That power is marketed and transmitted by Western to various entities, including the Westside Districts.