Horizon, Host: Ted Simons

February 11, 2009


Host: Ted Simons

Legislative Update

  |   Video
  • Arizona Capitol Times reporter Jim Small reports on the latest from the state legislature.
Guests:
  • Jim Small - Legislative Reporter, Arizona Capitol Times
Category: Legislature

View Transcript
Ted Simons:
Good evening and welcome to “Horizon.” I’m Ted Simons. The budget isn't the only thing on lawmakers’ minds this week. They’re also looking into limiting abortion and legalizing fireworks. Here with the latest from the legislature is "Arizona Capitol Times" reporter Jim Small. Jim, good to see you again. How are you?

Jim Small:
Good.

Ted Simons:
How are the talks going with the budget talks?

Jim Small:
The budget is kind of in a holding pattern for the most part. The committees and the senate are examining a number of the programs from the state agencies and the appropriations committees are trying to get the work in place to work for the budget year that starts in July. Tomorrow, the universities are going to be in the spotlight and going to get, you know, as much time I guess as the committees need to find out everything they need to know about how the cuts have impacted the schools so far and what future cuts would lead to.

Ted Simons:
The fix for '09, that isn't fixed yet, is it?

Jim Small:
It's really not there -- there's a $1.6 billion budget hole that is filled and was billed to be about $1.7 billion but most of that $100 million in cushion is going to be eaten up by the budget cuts in January. the preliminary numbers are about 20% less which combined with a couple of other issues with funds taken that maybe were already spent that can't get slipped into the general fund is going to put the state perilously close to being back in the red again. The lawmakers would have to come back and take another cut. But there's definitely going to be more work.

Ted Simons:
Is there a sense that plan b is operational?

Jim Small:
I think at this point, people are waiting. The feds are still hashing out the details on the stimulus package. The vote could come by the end of the week. There’s another month or so from what the budget folks have told me. A month of kind of lead time right now that they can work with and figure out what the next steps will be.

Ted Simons:
That stimulus bill seems to be the big gorilla in the corner that everyone is looking at and wondering what it’s going to do. Is that holding things up down there?

Jim Small:
I don't think its holding things up so much as it is -- it is in a certain way. People want to know what's going to come to Arizona so they can really start to put together a plan for the 2010 fiscal year and even for whatever needs to be done for the rest of this fiscal year. But to a certain degree, it's not only because there's only so much work that can be done right now. Governor Brewer met with Republican leaders in the house and senate and told them, let's make sure we take this budget nice and slow. Let’s not have any increases in it. We’ve got plenty of time to solve this; we don't need to do it immediately like we did with the '09 budget.

Ted Simons:
How much is the Governor participating?

Jim Small:
It seems to be fairly limited but as the process starts to ramp up, she'll be more involved.

Ted Simons:
Is there a sense there's more going on behind the scenes or is she just keeping her distance a little bit?

Jim Small:
More of the latter. Keeping her distance and the fact that they're not doing a lot of the heavy lifting yet.

Ted Simons:
I know the abortion bill; these are coming back to the surface. Talk to us about it.

Jim Small:
Absolutely, the abortion issues were one of Governor Napolitano where she was vetoing measures. Everything from -- ranged from pharmacy -- pharmacists to nurses to, you know, the consent issues and things like that. They were all vetoed and Republicans, one of the things that they saw as an opportunity with Napolitano out and Jan Brewer in was a chance to push on that policy again and have someone who is more amenable to those kinds of bills sitting in the Governor's office with the ability to sign them.

Ted Simons:
And there's a general understanding that she will be more amenable and these will probably get through.

Jim Small:
I think. So Governor Brewer has a long history of being pro-life. And these are issues that are definitely in the wheelhouse for many pro-life lawmakers.

Ted Simons:
There was a little -- it's an interesting story regarding rules changes down there in the house. What’s going on?

Jim Small:
Well, the house yesterday announced that it is proposing about a half dozen rule changes to the rules that govern the way the body operates. Some of them are conforming to the senate. Some a little bit more benign. But rankled Democrats down there that saw the changes as a way to maybe pull the shade a little bit further on government operations and try to hide things a little bit more. They were especially, I think, torqued off about a change that would eliminate public notices for conference committees in the house. Currently you have to post a notice the day before, by noon or by 5:00 depending on when the meeting is held. And this would get rid of that completely. And another change that would let the speaker decides if he or she wants to enter into litigation. Right now they have to take it to the entire body. I spoke to Kirk Adams the other day, and he says anyone who says it hurts the transparency of the body and that it’s hogwash. They don't have anything do with openness, transparency and as far as the litigation aspect; he brought up a lawsuit brought up by the league of cities and towns over a portion of the budget that they ultimately won. He says, you know, as a legislature we should have had a chance to weigh in, but we couldn't because we weren't in session and the case went on without us.

Ted Simons:
Were these ideas kicked around in the past, the previous speakers try to get this through or come out of the blue?

Jim Small:
For the most part, out of the blue. A couple of ideas of them have percolated for a while. The litigation issue was something that I know came up last year and discussed by Republican staff members but for the most part, out of the blue. And frankly, that may be another reason why the Democrats see these as hostile moves because they didn't know they were coming and found out 15 minutes before they had to give a presentation on them.

Ted Simons:
Before we let you go, it seems like déjà vu all over again. We’ve got a fireworks bill going around.

Jim Small:
Fireworks bill that would let sparklers and other small firecrackers be legal. Something that gets pushed by all political stripes. And generally it gets killed because of public safety issue. Lawmakers don't want to be responsible for people losing hands and fingers and there's always a fire concern. Especially Fourth of July. You get a lot of fireworks here. It’s the desert and hot and dry.

Ted Simons:
And is there any thought that because of the configuration, the way things are now, you could get yourself a fireworks bill finally after all of these decades, passed?

Jim Small:
You never know what is going to happen down there. But the big issue is the senate, since they're not hearing any bills until the budget is done. Anything moving in the house is going to stand and wait for the senate to keep up.

Ted Simons:
If the senate keeps doing what it's doing, we may not have time for the Fourth of July. Jim, good to have you here.

Jim Small:
Thanks for having me.

Renewable Energy Tax Credit Bill

  |   Video
  • The President and CEO of the Greater Phoenix Economic Council talks about a bill recently introduced by state lawmakers that offers economic incentives to renewable energy companies that move their headquarters or manufacturing facilities to Arizona.
Guests:
  • Barry Broome - President and CEO, Greater Phoenix Economic Council
  • Joel Dickinson - SRP
Category: Energy

View Transcript
Ted Simons:
State lawmakers have introduced a bill that offers economic incentives to renewable energy companies that move their headquarters or manufacturing facilities to Arizona. It’s an effort to create high-paying jobs, stimulate the economy, and make Arizona a leader in renewable energy. That’s something Arizona Corporation Commission Chair Kris Mayes fully supports. During a recent appearance on “Horizon,” she mentioned higher renewable energy standards for utilities and more capacity for transmission.

Kris Mayes:
Probably folks don't know how important transmission is. You can have all the standards, 15%, 25%, but if you can't get the energy to the cities and the people who need it and who would use it, what's the point? A lot of the energy, for instance, we've got about 10,000 megawatt in the desert available for solar energy. But we need the -- solar energy but we need the power lines to get it into Phoenix and potentially Los Angeles and when do you that, you'll see 100 megawatt, 200 megawatt projects built out in the desert and start to see manufacturers of that solar equipment locate in the state of Arizona and that's what we want to see. We want to bring ourselves out of this situation we find ourselves in where we're totally dependent and tied to the housing industry. Why not diversify our economy with something that we have?

Ted Simons:
Here to talk about the renewable energy tax credit bill is Barry Broome, president and CEO of the greater Phoenix economic council. Good to have you on the program.

Barry Broome:
Thank you for having me.

Ted Simons:
This sounds like -- could this be described as a stimulus bill?

Barry Broome:
I wouldn't want to refer to it as a stimulus. Part of the business plan of Arizona is understanding how each of these industries we have a chance to compete on need to be effected through a state policy. So there's a lot of pent-up capitol and interest. I think it will have a run rate faster. From that standpoint, it will stimulate but I think it's a business plan for Arizona's future for the next 25, 30 years.

Ted Simons:
What kind of renewable energy firms are targeted?

Barry Broome:
It could be biomass or fuel cells. Wind technology and even wave technology. And a lot of these technologies are going to have very intensive engineering and manufacturer components so big materials connections. Obviously, there's one renewable that is part of the future of Arizona and that's solar. Due to the propensity for sun here in Arizona, solar is 40% more efficient in our state than typical states. Our proximity to California really gives Arizona a chance to be an export player in technology to a place like California, plus service our own energy needs.

Ted Simons:
What kind of jobs are we talking about? Manufacturer, headquarters jobs?

Barry Broome:
Both. Solar cells are a similar technology to semiconductor. So when you hear things like A.P.S. project, which is a concentrated solar power investment, a farm out in rural Arizona, the permanent job impact on a project like that might only be 85 jobs but the materials connected to the industry is similar to semiconductor. So Arizona is one of the number two markets in the US in providing semiconductor talent. So feeds to the strength of our workforce, as well as the obvious of having the sun.

Ted Simons:
Are you looking right now because of the nature of the beast at international firms?

Barry Broome:
The breakthrough in solar has occurred in Japan, Spain and Germany. and what makes it exciting to us is Japan, Germany are the number two investors year and year out and especially Japan solar has reached parity with traditional power costs and Germany is now from an industry standpoint to target the united states and target California as a place to do business and I think that puts Arizona in an excellent position. Plus, California, a place of great innovation, Silicon Valley is going to lead the United States in solar technology, California’s cost of doing business really makes Arizona a natural for this industry to gestate. But there's competition. New Mexico, Texas, Colorado, Washington and Oregon have all made greater advances than Arizona.

Ted Simons:
And this bill in particular, how will this put us on a par or even ahead of the other states you mentioned? What does it do and compared to what has already been done?

Barry Broome:
I think it's important to understand what the role is of a state strategy or state incentive. It isn't to replace overall competitive positions. The reason Arizona is poised to succeed is because of the work of the Arizona corporation commission. The vision of Tucson electric power, our universities and a nice job by our legislators of keeping government small and keeping the cost of business competitive. What an incentive does is actually gives a company a chance to evaluate your state with other states that have similar capabilities. Arizona has almost an identical workforce to Oregon. New Mexico and Texas have similar sun patterns and we all have the ability to service California, so this would be a 10% tax investment on capital. Like the house bill that passed. For 10 years, it will put Arizona probably in a top three in the nation from an incentive perspective and I think it will guarantee Arizona is one of the states that solar clusters.

Ted Simons:
As far as salary and healthcare, talk to us about it.

Barry Broome:
One of the problems in Arizona's budget is we're home to a lot of working poor. A lot of people that work full time that cannot afford healthcare. This budget gets out of control because of things like AHCCCS. And if you look at Arizona's economy, we create a lot of jobs in the small business sector and healthcare is out of reach for small businesses to provide in their employees and AHCCCS as a backstop. In order to get an incentive, the company has to provide a traditional healthcare plan and 125% of the average of Arizona's median wage and in addition to the excitement around solar and renewable, this sets the standard for how all economic policy ought to be evaluated. Is this an industry we can compete in? Is it going to move us off of construction jobs? By the way, it's greater than Michigan’s dependence on automotive. And industry, this strategy, fulfills all of those requirements.

Ted Simons:
I want to get to diversify the economy in a second and expand on what you're talking about. As far as this bill is concerned, how does it compare to previous legislative efforts?

Barry Broome:
Well, it's the first bill ever introduced in Arizona that requires a company to pay higher than average wages in the state and provide healthcare to get it. It’s a trendsetter in good public policy. The second piece we really like about this is before the company gets this incentive, it has to actually be up and operational. So you're not front-ending the incentive. And if the company doesn't stay operational in Arizona for 10 years, the company pays back the incentive in the event it leaves. If you look at Arizona's incentives right now, they're poorly constructed around poor wage jobs and lack discipline and don't require the companies to perform and there's no penalty for nonperformance. I don't think it's just an incentive on steroids. I think it's smart for how Arizona does economic development.

Ted Simons:
How is it affecting what Arizona is trying to do regarding solar in particular?

Barry Broome:
What we should be doing -- if you've read the book “Good to Great,” they have something called a hedgehog philosophy. Arizona needs to be the dominant force in solar technology. And if you look at solar in the United States, it's spiking. By 2016 projecting 40,040 new jobs in solar. President Obama has appointed a Secretary of Energy from California who is a solar professional and the president is talking about renewables and his key expert is a solar leader, Arizona is a solar state. The chance to walk to the store right now and change the future of Arizona is in front of us right now. Yes, we have a budget crisis, but what is it? It’s an indication that the economy is too dependent on short term economic models that don't provide long term success. You can't fix the budget without fixing the economy and solar renewables gives us the best platform going forward.

Ted Simons:
And as far as solar is concerned, some will argue you can't prop up an industry that doesn't seem ready to stand on its own.

Barry Broome:
In Japan, the price of solar is already below the price of traditional power and already -- this is not a static situation. The price of solar power is coming down and the price of traditional power is increasing dramatically. We expect by 2012 the price of solar power in California will be cheaper than the price of traditional power and that's just around the corner. If you think of Arizona as an exporter instead of a service economy, that means we're ripe to buy solar technology from Arizona. So I think all new technologies go through a period of correction and solar is one of those. But if you look at the achievements in the industry, the price is coming down and the price on traditional power is going up. The second piece on that, which has to be a factor, 70% of our energy we input from a hostile territory to the United States. We are importing from the Middle East and getting off that is an important national security issue. And if you talk to some experts, 30 years out, we're running out of energy. Solar is renewable and it's going to liberate us from foreign oil and gives us a chance to be a serious player since the invention of steel, automotive, computers. We have a chance to be a real winner.

Ted Simons:
Go team! Thank you for joining us. And finally tonight, Larry Lemmons shows us how one Arizona company is using the sun's energy to beat the heat.



Larry Lemmons:
Cold from hot, that's the basic principle behind solar thermal cooling. At the Arizona Department of Emergency and Military Affairs, SRP installed a demonstration solar absorption cooling system.

Joel Dickinson:
Right now, conventional air conditioning is a major load for SRP and if we can try to explore these solar cooling technologies and avoid the peak demand with the solar, we would be in a really nice position.

Larry Lemmons:
It might look complicated but it's a fairly straightforward process. It starts with a heat pipe.

Joel Dickinson:
Each of these vacuum pipes is an individual process and what they do is take the working fluid inside of this vacuum pipe, is in a puddle at the bottom, the sun beats down, and transfers the energy to the pipe and boils that water inside that vacuum tube. The vapor travels up the tube and on the manifold of hot water and this is the hot water we use to drive our solar chilling process. All of the hot water we harvest with the solar array gets stored in this tank and the cooler water from the bottom is piped out to the array, through this pump. And then it goes through the array, the water is heated, and then it comes back and it's dumped into the top of the tank. So the water is cooler at the bottom and hotter at the top and the hot water gets stored in this tank. Now we have a tankful of hot water created by the solar array and that hot water drives the absorption chiller and piped over here in this pipe and then the hot water is converted to cold water by the chiller and in a vacuum. The cold water is piped over to the building. So the chilled water being created by the absorption chiller is pumped up through these -- absorption. It's a conventional air handling unit that utilizes the cold water and hot air in the building. The hot air goes over the cold coil and we get cold air in the building.

Larry Lemmons:
This is a pilot program. SRP and the National Guard have teamed up to see how the system works. It is producing air conditioning for the Guard’s Eco-Building.

Paul Aguirre:
It's a project that the Arizona National Guard did years ago. It’s made out of recyclable materials. It's solar powered. And to add this solar chiller unit to that really underscores the eco-building intent, which is to be environmentally friendly and use renewable power sources more and more for the Arizona National Guard.

Joel Dickenson:
SRP has spent quite a bit of money putting a data acquisition system and this solar air conditioner so we can harvest information and from that, we're going to hire a third party and do an energy study and what are the true economics of this system? How much are we saving by using the solar hot water to drive the cooling process and then over time, I think we would like to get that information out to the public so that they understand what are the paybacks and return of investment for this type of technology.

Larry Lemmons:
SRP hopes the technology becomes smaller so the system will be more practical for home use.

Joel Dickenson:
Right now we're dealing with a 10-ton chiller. They came out with a 5-ton version. so that would be a nice evolution, I think, to see it move into the home.

Larry Lemmons:
Progress has been made here in the valley of the sun to employ solar technology. a challenge has always been the cost.

Joel Dickenson:
We have all of this free energy we can harvest with the sun. the trick is to figure out how to make this cost effective and I think we've been evolving over the last number of years to that goal and I think we're getting close.

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