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Lots of sunshine, but no incentives: Arizona's economic development
Shelley Gillespie
Wednesday, April 1, 2009
“Renewable energy and its role in shaping Maricopa's future” was the topic of a roundtable discussion on March 20 at Global Water Center in Maricopa. Moderated by State Senator Rebecca Rios, the roundtable included all the major Maricopa energy players, some state energy/economic development gurus, and a small audience of business people.
Panelists were: David Bentler, Arizona Association for Economic Development and APS; Graham Symmonds, Global Water; Chris Camacho, Greater Phoenix Economic Council (GPEC “solar expert”); Danielle Casey, Maricopa Economic Development Manager; Gina D’Abella, ECO (President, Environmental Concerns Organization, Inc. and Recycling Association of Maricopa); Kevin Evans, Maricopa City Manager; Bill Stacy, Electrical District 3; and Bill Wasowicz, Maricopa Chamber of Commerce (President). John Skelley from Pinal Energy was billed, but did not attend.
An involved presentation by Camacho showed that Arizona is behind the eight ball in attracting the industry the state needs to be a player in the renewable energy world. He likened Arizona’s reliance on construction as the dominant industry to Michigan’s reliance on the auto industry – only Arizona is in worse shape. Michigan has suffered a 31% job loss, but Arizona’s loss is 37%. With Federal solar tax incentives, the projections Camacho showed indicate a national increase in solar-related workers by over 275,000 jobs by 2016. The recently passed American Recovery and Economic Development Act of 2009 would allocate $35 billion to renewable resource programs among various government agencies.
With sunshine 321 days a year in Arizona, it would seem Arizona should be jubilant. Rios stated the picture well. There is the “opportunity for Arizona to be a leader.” We could be attracting “these high paying clean industries.” But, we “have lost some to neighboring states.”
Why are we losing these future industries to other states when we have so much sunshine? The answer repeatedly indicated by the panelists is that Arizona offers no incentives for businesses to move here.
Bentler stated that other states were “more aggressive” in attracting these clean, high paying, renewable resource industries. Even when a manufacturer was located in Arizona, a component supplier located his facility in New Mexico because the incentives are so much more attractive there.
GPEC, of which the City of Maricopa is a member, has had inquiries from Korea, Canada, and Ireland. Camacho said that they’ve all walked away because the “numbers don’t work;” “there are no monetizable incentives.” Six neighboring states have incentives, but we don’t. Sunshine isn’t enough.
Maricopa players tell the story
Despite the State’s lack of foresight in incentives, Maricopa is forging ahead in its efforts to attract renewable resource-based industries.
Locally, Stacy described energy efficiency grants available to homeowners and businesses. The homeowner’s version provides energy resource assistance for people earning up to 200% of the federal poverty level ($44,000 per year). Money is available for things as cost-saving but simple as insulation for doors and water heaters. No one has yet installed a solar panel in Maricopa with the available incentives.
Wasowicz reminded attendees that Maricopa has the educated workforce available to staff the future industries and that Maricopa is a “perfect fit” for these green industries. We have the room and “housing is extremely affordable.”
Kevin Evans described Maricopa’s pluses in attracting additional green energy businesses. Pinal Energy, University of Arizona Maricopa Agricultural Center, and solar rooftops in the area show Maricopa is ready for more green industry. He predicts that the City buildings to be constructed in coming years will be built in the “LEEDS spirit” and that Maricopa will be “very aggressive” in seeking these renewable resource related industries. Shovel ready sites will be “produced.”
Evans said, “Arizona is gonna dig its way out,” but “There’s no gun to draw at the gunfight.” without financial incentives.
Symmonds explained how Global Water is saving water by recycling when possible as it takes less energy to reuse than develop more sources, move, and transport. He indicated that Global Water would be using the required 350-foot setback from other facilities by putting solar panels in this buffer zone. This will make them more self-sufficient.
D’Abella pointed out how effective incentives had been to encourage solar water heaters in the 1980s, but as soon as the incentives were phased out, people stopped installing the heaters. She affirmed that people need “economically feasible” options that are “readily accessible.”
How to fix this
A start on incentives would be Arizona Senate Bill 1403. However, Rios stated that the legislature would not be considering the bill until the current budget is passed.
When asked by this reporter what the likelihood is that the bill will pass, Rios responded, “It is a difficult time in the legislature.” She indicated that, with the budget in deficit, the legislators would need to see beyond the immediate crisis to understand how these incentives proposed in the bill would be a revenue generator in future years. She is obviously for the incentives, even if “for selfish reasons,” as she can see the jobs it will bring to Pinal County, her constituency.
During the question and answer portion of the roundtable, Finn Simmensen, a Maricopa resident and attorney, related how he had just reviewed SB 1403 and found it “dizzying in its complexity.” We could be buried “under heaps of regularity complexity.”
Camacho’s response was that GPEC lawyers had spent years developing the Bill.
In response to a question about the availability of transportation, Evans added that an agreement reached with the Union Pacific Railroad gave Maricopa two miles of siding so that manufacturers could easily ship their goods and receive their raw materials via railroad.
Perhaps most important was Camacho’s final point that big money is coming through the federal economic recovery programs. Guidelines on spending will be published soon. To be in line to receive the funding, shovel-ready sites and plans need to be in place. Maricopa needs those shovel ready sites now.
Meanwhile, Camacho encouraged everyone to contact his or her State legislators to support AZ Senate Bill 1403. It could mean clean, green jobs in Maricopa.
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