Arizona to L.A.: Lights out!

By Aaron Smith, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- Arizona responded to the Los Angeles city council boycott with a suggestion of its own: cutting power to the nation's second-largest city.

The Arizona Corporation Commission, the overseer for the state's electric and water utilities, has offered to pull the plug on Los Angeles, noting that Arizona's power plants supply electricity to 25% of the city.

"If an economic boycott is truly what you desire, I will be happy to encourage Arizona utilities to renegotiate your power agreements so Los Angeles no longer receives power from Arizona-based generation," wrote Arizona Corporation Commissioner Gary Pierce to Los Angeles Mayor Antonio R. Villaraigosa, in a May 18 letter.

"I am confident that Arizona's utilities would be happy to take those electrons off your hands," he wrote.

The letter is in response to the Los Angeles city council decision on May 12 to boycott the state of Arizona and Arizona-based businesses to protest the state's controversial new immigration law, which will take effect in July. Estimates of the economic impact range from $10 million to $56 million.

John LeSueur, spokesman for Pierce, downplayed the threatening nature of the letter, emphasizing that the commission itself does not have the authority to cut power to Los Angeles.

"It's not a threat," he told CNNMoney.com. "It's just pointing out the ramification of what L.A.'s threat would be on the boycott. If they carry out their threat to boycott Arizona, that includes 25% of their power."

LeSueur pointed out that Los Angeles has partial ownership in two of the Arizona power plants, including a 5.7% stake in the Palo Verde nuclear power plant, and a 21% stake in the Navajo Generation Station on a Navajo reservation.

The law

The Arizona law requires enforcement agents to "determine the immigration status" of anyone under "reasonable suspicion" of being an illegal alien. In other words, the law provides state police with the power and responsibility that is normally accorded to federal immigration authorities.

The bill's proponents are concerned about the federal government's failure to crack down on illegal immigration and the growing sense of lawlessness in the border region with Mexico, where an American rancher was murdered in March.

The law's opponents are concerned that the bill endorses racial profiling. Gerry Miller, chief legislative analyst for Los Angeles, said in a May 11 analysis of the boycott that the Arizona law will "promote racial profiling, discrimination and harassment."

President Obama, in a meeting with Mexican President Felipe Calderon at the White House on Wednesday, called Arizona's law a "misdirected expression of frustration."

But it's not clear how much power Los Angeles actually has in boycotting Arizona.

Paul Senseman, a spokesman for Arizona Gov. Janice Brewer, told CNNMoney.com on May 13 that the Constitution "specifically prohibits economic blockades by a state or city against another."

Officials in Los Angeles spoke in support of the boycott, including Mayor Antonio Villaraigosa and Austin Beutner, general manager of the Los Angeles Department of Water and Power.

Beutner said he doubted that Arizona had the ability to turn off the lights, because L.A. was part owner of two of the power plants.

"As such, nothing in the city's resolution is inconsistent with our continuing to receive power from those LADWP-owned assets," he said.

Beutner added, "As the city's job czar, I would welcome any conventions or meetings that were going to be held in Arizona to come to Los Angeles. We have fantastic facilities and incomparable weather and we'd welcome them to the City of Angels." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,039.49 60.36 0.36%
Nasdaq 4,532.10 5.62 0.12%
S&P 500 1,992.37 5.86 0.29%
Treasuries 2.41 -0.02 -0.78%
Data as of 7:48am ET
Company Price Change % Change
Bank of America Corp... 16.16 0.64 4.12%
eBay Inc 55.89 2.49 4.66%
Hewlett-Packard Co 37.00 0.00 0.00%
Intel Corp 35.15 0.65 1.88%
Apple Inc 100.58 0.01 0.01%
Data as of Aug 21

Sections

U.S. food chains are constantly looking for ways to appeal to local tastes -- think red bean Frappucinos and mango pizza. More

The Heartbleed bug is to blame for the hospital hack that stole 4.5 milliion patient records. If true, brace yourself for similar, mega data breaches. More

This Canadian startup founder faced the threat of deportation because he was on the wrong visa. Problem is -- there's no startup visa for entrepreneurs. More

This month, Delaware became the first state to pass a law giving heirs the right to access the online accounts and assets of someone who has passed away. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.