It’s very hot in Arizona, but no one in charge seems to be very worried about the electricity.
The region’s major utilities — Arizona Public Service, Tucson Electric Company, and the Salt River Project — have all said they’re confident that the lights, and especially the air conditioning, will stay on, even as both temperatures and electricity usage break records. This is in stark contrast to a nearby state, Texas, where record heat has sparked anxiety about reliability and voluntary calls for conserving energy use.
Whether Arizona can transition to a less carbon-intensive grid while maintaining its famed reliability is a test not just for its residents, but also for Arizona’s stubborn rejection of energy deregulation. The state is blessed with abundant renewables potential (it's very, very sunny) and a massive carbon-free source of firm power in the country’s largest nuclear plant, the Palo Verde Generating Station. But it also has a market structure for electricity that typically sees lower renewable production.
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Reliability is quite literally a matter of life and death in Arizona. One paper estimated that the combination of a prolonged blackout (no power for five days) and a heat wave where temperatures were between 90 and 113 degrees (actually slightly cooler than recent temperatures) could result in about 13,000 deaths and more than half of the population needing to go to the emergency room. While this scenario was admittedly extreme, we do have a grim reminder of how dangerous high temperatures can be in Arizona: When people die of heat exposure, they’re often homeless.
Arizona's grid has held up well under this heat wave, though. According to Arizona Public Service, their customers set a record for consumer demand for electricity on Saturday with 8,191 megawatts. The previous record had only been in place for one day; it had been set on Friday. The utility, a subsidiary of Pinnacle West, has over one million customers and services much of the state, splitting the Phoenix area with the cooperative Salt River Project. A spokesperson for Arizona Public Service told me “we continue to have adequate supply and our system is stable," while a Salt River Project spokesperson said that its electricity demand set a record on Monday evening with 7,997 megawatts, after setting records last Friday and Saturday.
Yet Arizona does have one problem with its electricity grid: It's pretty dirty and thus contributing to the reason all those air conditioners need to work so hard. Natural gas remains the state’s biggest source of energy, representing just over 42 percent of its generation last year, and coal still outproduces solar, according to Energy Information Administration data. One bright spot in the grid is nuclear power, which produces just under 30 percent of the state's energy.
The reliability of Arizona’s grid might have less to do with the makeup of its energy grid, though, and more to do with the fact that the state has resisted deregulation, meaning that Arizonans are served by utilities which own or contract electricity generation and are overseen by a state body, the Arizona Corporation Commission. This means planning is a cooperative process between the state and the utilities, as opposed to one governed by a wholesale market for electricity.
Critics of deregulation have argued that market constructs for electricity lead to underinvestment in reliability (like winterization for natural gas, albeit not a huge concern in Arizona) and premature retirement of energy resources, like dispatchable power plants, that can be expensive to run. They’ve also been criticized for not bringing down prices in the way they were promised. While Arizona does have more expensive electricity than Texas, according to the Energy Information Administration, it’s substantially cheaper than California, New York, or New England.
Arizona has been assailed by both environmental groups and activists, who accuse the utilities of dragging their feet or outright obstructing renewables, especially solar, as well as by generation companies (especially those with solar subsidiaries) who wish to compete in a more deregulated market where customers can choose where their electric generation comes from.
Arizona’s major utilities have all committed to decarbonization timelines, ranging from aspirational goals of total decarbonization by 2050 to more detailed targets by 2035, even though state rules mandating decarbonization were shot down in 2022.
That will likely mean more development of solar — despite being very sunny, Arizona’s solar production lags North Carolina, according to the Solar Energy Industries Association — along with battery storage and the continued operation of the Palo Verde Generating Station, the utility-owned 4,000 megawatt nuclear power plant that serves customers in Arizona and three neighboring states, including California and Texas.
If Arizona adds large amounts of solar to the grid, which it's starting to do, it will need to deal with the famous duck curve, the phenomenon where the sun goes down and solar production plummets, but electricity demand stays stubbornly high as air conditioning and appliances are still in use. On Monday, demand peaked in the early evening and, in Phoenix, temperatures hovered at right around 100 degrees at 9 p.m. Arizona's utilities are aware of this issue; along with increased solar installation and investment, there has been increased deployment of battery storage, which can bank the sun’s energy for nighttime use.
Meanwhile Arizona’s combination of high reliability and avoiding deregulation has become something of a point of pride in the state, where some leaders and advocates see it charting a course between the Scylla of Texas and the Charybdis of California, its two wealthy and gargantuan neighbors. When the Wall Street Journal ran a long story entitled “America’s Power Grid Is Increasingly Unreliable” (it featured, of course, California and Texas), Arizona Public Service issued a statement from its chief executive entitled, “’Unreliable grid?’ Not here in Arizona.”
Keeping it that way is a matter of life and death.
Read more about heat:
How to Survive a Blackout in a Heat Wave
IEA