Economic development: Start with a Tucson metropolitan microgrid

posted Friday, January 23, 2015        

Economic development: Start with a Tucson metropolitan microgrid

By Terry Finefrock Special to the Arizona Daily Star Arizona Daily Star

January 23, 2015

There is great potential that electricity costs could be reduced, increases avoided, system reliability improved and recurring economic benefits provided by establishing utility-scale photovoltaic solar electric facilities within and adjacent to the Tucson distribution grid.

By using rapidly developing energy storage equipment on feeder circuits we can manage fluctuations in demand or supply, essentially creating a metropolitan microgrid.

Why is this move to multiple solar facilities dispersed around the area so important?

The cost of electricity has a great impact on our economy and all residents, businesses, ratepayers and taxpayers, especially those with little or no discretionary income. Energy, like water, is not a discretionary expenditure.

Conventional fossil-fueled generation of electricity via coal or natural gas simply costs more than solar electric generation technology. Here are just two examples why: “Freight” costs for transmission infrastructure account for about 10 percent of an electric bill; another 3 percent pays for the energy lost during transmission requiring incremental generation costs and surcharges.

Additionally, there are environmental costs. Coal combustion emits carbon and natural gas mining emits methane. Both emissions trap heat in the atmosphere, result in higher average temperatures, greater energy consumption and costs, and less local precipitation.

Methane is cleaner than coal but traps 26 times more heat than coal/carbon.

Generation of electricity via steam and turbines loses to evaporation billions of gallons of potable water each year.

That water, so precious now, will be even more so in the future. As David Modeer, general manager of the Central Arizona Project, has stated, the cost to develop alternative water sources is 10 to 50 times more than the cost of current sources. Not only will future water bills rise, but so will the cost of food crops.

I believe we should not continue to incur the operational expenses of obsolete technology such as coal-fired plants or attempt to upgrade and prolong their life for a short period of time.

Instead, I’m advocating that ratepayer revenues should be invested in new technology that avoids these expenses.

By accelerating the reduction and displacement of conventional generation with solar and energy storage, we minimize those costs and allow continued harvesting of prior investments until those assets are fully depreciated.

According to the Arizona Corporation Commission, Tucson Electric Power’s 2014 cost to generate electricity via pulverized coal is 12.5 cents/kWh; the least costly generation technology is 8.8 cent/kwh; rapid-response generation, used to balance supply and demand, ranges from 26 to 29 cents/kWh.

Local utility-scale solar photovoltaic facilities can be established at less than 5 cents/kWh, and incur no fuel, emissions, water or transmission-related costs. Pima County recently contracted solar facilities at a much smaller scale for 5.7 cents/kWh.

Considering conservatively projected annual increases in utility costs, satisfying their electricity requirements via self-generation could reduce the county’s operational costs by $663 million over 30 years. Since the city of Tucson uses about twice as much energy as the county, the combined savings would total about $2 billion over that time period. (That would fill a lot of potholes or pension funds).

Federal energy-program funding for a metro microgrid could be acquired; local governments could provide zero-cost leases of public land in exchange for fixed energy prices.

In addition to electricity cost reductions, the demand for the equipment would help our economic development organizations to entice higher-wage manufacturers and solar-system providers to locate here and supply the Western U.S. and Mexico who are implementing a renewable energy mandate. The resulting population growth would increase property values, local and export trade and the various tax revenues required for community improvements.

If you believe a private-public partnership to implement some form of these concepts has merit, contact your Tucson City Council ( and Pima County Board of Supervisors (, and ask that they establish a project team to work with TEP, the Arizona Corporation Commission, Residential Utility Consumer Office, and our Arizona congresspersons to make this happen.

Terry Finefrock, a Tucson resident since 1956 and a graduate of the University of Arizona and the Eller Graduate School of Management, is a former high-technology manufacturing operations and supply chain director. He has provided testimony and comment to the Arizona Corporation Commission. Contact him at


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