My View: All-of-the-above system strategy needed to build Arizona’s energy future

Few would doubt high energy prices and affordability are among the biggest issues facing Arizona today. Whether the concerns are raised in the city, suburbs or rural Arizona, chances are we all are asking the same types of questions: Why are electricity costs increasing? How do we keep them affordable? What roles do population growth, data centers, renewable energy, natural gas and our electric grid play?

At the Arizona Technology Council, we deal with these questions every day because reliable and affordable electricity is fundamental to virtually every sector of our membership and economy. Energy policy is complicated, and complicated issues have a way of getting reduced to slogans.

Let’s start with something obvious: Arizona needs more electricity.

As our economy and population continue to grow, so do our needs. Semiconductor fabs, advanced manufacturing, aerospace and defense, data centers and artificial intelligence all require significant amounts of power. The same applies to the millions of homes, businesses, schools and hospitals.

Meanwhile, portions of our existing generating capacity and transmission infrastructure are aging and eventually will need to be replaced or modernized to meet demand. This challenge already is among priorities for Arizona’s utilities, as well as recommendations in a recent report by Gov. Katie Hobbs’ Arizona Energy Promise Taskforce.

Since no single source can supply the needed power, Arizona needs an all-of-the-above energy strategy, excluding coal, that takes advantage of our considerable strengths. That includes nuclear power, natural gas, solar and other renewable resources, battery and long-duration energy storage, energy efficiency, and emerging technologies.

The Palo Verde Generating Station, for example, provides Arizona with enormous amounts of reliable, carbon-free electricity around the clock. Natural gas provides dispatchable generation that is particularly valuable when demand peaks. Solar makes tremendous sense in a state blessed with more than 300 days of sunshine each year while increasingly capable storage allows us to capture that energy for use at night or on cloudy days.

The point should not be to pit one resource against another. Instead, the objective is to build an energy portfolio capable of delivering sufficient electricity reliably at a price Arizona families and businesses can afford.

This is particularly important when considering new energy projects. Saying no to a proposed power project does not make Arizona’s growing electricity demand disappear.

Every project should be evaluated on its merits, including location, cost, reliability, environmental impact and effects on surrounding communities. But we also need to recognize the cumulative consequences of repeatedly opposing new generation and transmission as electricity demand continues to increase.

Requiring substantial amounts of electricity are data centers, which have become a particularly visible focus of debate. They are the physical infrastructure behind cloud computing, banking, healthcare, communications, cybersecurity and increasingly artificial intelligence. I have written extensively about the data centers’ benefits, as well as the legitimate questions surrounding their growth.

The digital economy does not exist somewhere in the clouds. It operates in buildings filled with servers that require electricity.

That doesn’t mean every data center belongs everywhere or existing customers should unfairly shoulder the infrastructure costs created by very large new loads. We should expect developers, utilities, regulators and communities to work together to ensure adequate generation and transmission are available and that costs are allocated appropriately.

The same principle applies to water, land use and impacts on neighboring communities. Growth needs to be responsible.

But we should not confuse the debate over electricity generation with that of electricity consumption. Preventing a solar project from being built does not prevent a data center, semiconductor fab or other large electricity user from seeking to locate in Arizona. It simply removes one potential source of electricity from the portfolio available to meet our overall needs.

Ultimately, Arizona’s energy challenge is not about choosing between renewables and natural gas or weighing economic growth vs. affordable electricity. It is about having enough reliable and affordable energy to support both our residents and our economy.

Meeting that challenge will require more generation, transmission and storage; greater efficiency; and continued innovation. It also will involve thoughtful planning by utilities, regulators, policymakers, businesses and communities.

There are legitimate disagreements about how we get there. But we should begin with something on which I hope we all can agree: Arizona’s future depends on an energy system that is reliable, affordable and capable of growing along with us.

If Arizona wants to remain a place where families can afford to live, businesses can compete and innovative industries can grow, we need an energy strategy built for the Arizona of tomorrow, not simply the Arizona of today.

Steven Zylstra is president and CEO of the Arizona Technology Council.