As cities in other states ban natural gas, Arizona lawmakers move to protect it

Arizona lawmakers are moving swiftly to prevent cities and towns from hindering natural-gas hookups on new construction projects.

Dozens of U.S. cities are considering such prohibitions on new homes and businesses, following the lead of Berkeley, California, and other municipalities in that state and at least one in Massachusetts.

The bans generally are proposed in the name of reducing greenhouse gasses that contribute to climate change.

Arizona hasn't seen a formal proposal to follow suit anywhere in the state, but lawmakers want to ensure that doesn't happen. Opponents believe the Legislature is acting before such bans gain popularity with the public.

Identical bills are moving through the Legislature largely along party lines, with Republicans in support and Democrats, the minority in both chambers of the Arizona Legislature, opposing them.

If that trend continues the resolution will be on a fast track to the governor.

Senate Bill 1222 from President Karen Fann, R-Prescott, and House Bill 2686 from Speaker Rusty Bowers, R-Mesa, would prevent municipalities from requiring new homes and commercial buildings to be built with all-electric hookups, thus preventing natural-gas service.

The House bill passed a full vote of that chamber Wednesday 36-23, with five Democrats joining 31 Republicans to support it.

The Arizona League of Cities and Towns didn't take a position on the bill. While the group normally opposes restrictions placed on municipalities, some of the League's member cities like Mesa also run utilities, which generally support the measure.

If identical versions pass each chamber, a single measure goes directly to Gov. Doug Ducey for consideration without additional action at the Legislature.

"The bill is going forward," Fann said. "If a municipality shuts down natural gas or electric or anything, that affects all the ratepayers in the state, not just the municipality. Can you imagine if all cities had different regulations on one form of energy or another form of energy? Businesses would not relocate to Arizona."

The Arizona bills have support from a variety of homebuilders and utilities, including companies such as Southwest Gas Corp. and UNS Energy, which provide gas service in Arizona.

Opposing it are a variety of environmental groups including the Sierra Club. The cities of Phoenix and Tucson also registered their opposition.

"Local communities are the ones that are doing something about climate change, unlike the state and the federal government right now," Sandy Bahr, director of the Grand Canyon Chapter of the Sierra Club, said at a hearing on the issue last month.

Phoenix and Tempe officials didn't speak at the hearings.

Bowers said consumers can choose whether to use gas or any other energy source without direction from the government.

"If somebody is so deeply focused on planetary preservation, whatever it might be, they are free to not use that fuel source," Bowers said. "If nobody used that fuel source, the gas company would go out of business."

Political contributions questioned

Environmental organizations have criticized Arizona lawmakers for accepting significant donations from Southwest Gas before introducing the legislation.

"They see this as a very significant threat to their business model," said Joe Smyth, a research and communications manager for the Energy and Policy Institute, a San Francisco organization that opposes fossil fuels like natural gas.

Southwest Gas has given $4,500 each to Fann and Bowers in the past year for their re-election campaigns. The leaders bristled at the criticism.

"If that were true then I should be expecting a whole bunch of money from the Sierra Club to get me to change back," Bowers said. "If my integrity is for sale, then you know, let's start upping the ante. Otherwise I think I'm OK."

Salt River Project and the parent company of Arizona Public Service Co. — Pinnacle West Capital Corp. — also have contributed to the duo but not as much as the gas company. APS and SRP only offer electric service for customers.

Fann said it is offensive to suggest the lawmakers are pushing the bill because of the donations.

"That's ridiculous," she said.

LAWMAKERS' PLAN: Bill to preserve natural-gas hookups to new homes advances

Smyth said Southwest Gas operates in several states but must have selected Arizona because it felt it had a chance of succeeding with such a proposal here.

"What they are doing is proposing legislation in states where they think they have a chance of passing it even if the threat of a local ban is not there," he said. "If that's not on the radar yet maybe it will be in a year or two or three. They are taking advantage of a lack of attention."

Debate over savings of gas vs. electric

Besides the environmental considerations, much of the debate over the bills has centered on affordability. Supporters contend that natural-gas service to a home or business is cheaper than electricity, though that's not widely agreed upon.

Some environmental advocates contend that electrified homes save consumers money, in part because they buy and maintain fewer appliances — using one unit to heat and cool the home in different seasons rather than a gas furnace and electric air conditioner.

Sen. Sine Kerr, R-Buckeye, questioned whether that could be true, because if so, consumers would choose all electric homes without municipalities needing to require them.

"If electricity were so much cheaper would you not agree consumers would be quite vocal on that?" Kerr asked during a committee meeting on the bill.

Retail prices for natural gas are generally cheaper than electricity per unit of energy. Households that use natural gas for heating, cooking and clothes drying save an average of $874 per year compared with homes using electricity for those applications, according to the industry group the American Gas Association.

But that figure essentially only pertains to cold-weather homes, as few homes in the Arizona desert have gas heating.

Desert homes, which spend much more on summer cooling than winter space heating, primarily use gas where it is available for water heating and cooking, while relying on electricity for heating and cooling.

Gas gaining popularity in Valley homes

Salt River Project, which serves more than 1 million homes in the Phoenix area, surveyed its customers in 2017 and found that 67% use electric heating in winter, forgoing the need for a gas heater.

However, SRP spokesman Jeff Lane said that in the last five to 10 years, builders have increasingly offered gas furnaces as an amenity for homes in the desert.

"New-home owners are looking for choice in amenities such as gas fireplaces and gas cooking," he said.

Customers pay a premium for using a separate gas furnace for heating, according to the Southwest Energy Efficiency Project. The group's research shows it is 6% cheaper to retrofit an existing home that has an electric air conditioner and gas furnace to a single electric heat pump that can blow hot and cold, depending on the season.

It is 31% cheaper over the lifetime of a new home to build it with a single electric heat pump compared with separate air conditioning and gas furnace, according to SWEEP's research.

“Electric heat pumps are cheaper in Phoenix for both newly built homes and existing homes, as shown in our 2018 report on the benefits of heat pumps for homes in the Southwest," SWEEP's Arizona Associate Caryn Potter said. "Electric appliances have a lot of benefits, including improved indoor air quality. The benefits are why we recommend that new homes should consider going all-electric.”

Reach reporter Ryan Randazzo at ryan.randazzo@arizonarepublic.com or 602-444-4331. Follow him on Twitter @UtilityReporter.

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