With the planned closure by Arizona Public Service of the Cholla Plant in Joseph City to bring economic hardship to the region, Joseph City Unified School District (JCUSD) is seeking funding from the utility to create a financial glidepath and avoid a financial cliff. Tax revenues from large coal power plants provide significant funding for school districts. As state allocations for public schools in Arizona have diminished, this is yet another loss for districts impacted by coal plant closures. While JCUSD has been proactive in efforts to reduce costs and find new revenue sources to mitigate some of the potential loss the district cannot make up the total loss on its own.
APS is currently seeking a rate increase, a process that involves going before the Arizona Corporation Commission (ACC) to justify the need for increasing consumer pricing. Utility rate cases are an opportunity for those looking for Coal Community Transition (CCT) funds from
APS to make their cases in front of the ACC.
JCUSD is the first school district to seek remedy directly from a utility through intervention in a rate case. The outcome of this case will set a precedent for all school districts, and possibly other public entities, located in communities associated with coal plants across Arizona.
Superintendent Bryan Fields is scheduled to present at a hearing before the ACC on Sept. 6. To support its case before the commission, JCUSD commissioned an economic analysis of the impacts of the plant’s closure on their schools. The study documented the need for $20 million to be paid by APS over 20 years to compensate for catastrophic losses.
It should be noted, that in unincorporated communities such as Joseph City, the school district goes beyond providing an education as it is also a hub for community activity and provides important extra-curricular activities.
While JCUSD will be the first school district to present its request before the ACC, in 2020 the Navajo Nation negotiated a settlement with APS, with APS agreeing to fund a $144 million transition package. However, the ACC significantly reduced that package to just $10 million in cash and other provisions, such as a commitment to purchase renewable energy produced on the Nation. Advocates for the Navajo Nation, the Hopi Nation, the Sierra Club and other clean energy organizations intervened in the 2020 case and are again intervening in this rate case, asking for adequate funding for CCT.
Hearings for the APS rate case commenced this month. The case is not expected to be decided by the five publicly elected commissioners until the end of 2023 or beginning of 2024. The hearings are scheduled through mid-September and can be listened to live here by visiting the ACC website at azcc.gov.
The Cholla Power Plant is the first of four coal plants in Arizona to be decommissioned. Other plants include the Coronado Generating Station in St. Johns operated by Salt River Project, Springerville Generating station in Springerville operated by Tucson Electric Power and the Apache Generating station in Cochise operated by the Arizona Electric Power Cooperative each of which will be closing in the coming years and significantly change the economics of the region and the people that live in these communities.
