Q&A: Phoenix mayor says local government must lead on clean energy

WASHINGTON – Communities across the United States that rely on federal funding to transition away from fossil fuels are scrambling to keep programmes on track after President Donald Trump froze tens of billions of dollars of aid.

Under the 2022 Inflation Reduction Act (IRA), tax credits, called direct pay, have helped local governments and nonprofits to make renewable energy projects financially feasible.

Trump halted this and other spending in an executive order issued on the day he took office. In February, 133 local elected officials from 39 states and Washington, D.C., urged federal lawmakers in a letter to preserve direct pay credits, which more than 1,200 groups, including over 500 local governments, have used in the past year.

One of the signatories is Phoenix Mayor Kate Gallego, a Democrat who also chairs the national Climate Mayors group of 350 mayors. She spoke with Context in March.

What's unique about Phoenix's energy needs and clean-energy opportunities?

Phoenix is blessed with more days of sun than almost any city in the country. So we want to take advantage of that to be the Saudi Arabia of solar energy, as it were.

We also have a fair amount of solar manufacturing, as well as companies that do utility-scale renewable energy. We don't have a cold winter, but it can get quite hot in Phoenix, so the high energy bills for us are in the summer.

What have the IRA and direct pay credits meant for Phoenix?

One of the things that was really exciting about the Inflation Reduction Act is it gave so many tools for residents to manage their energy bills. With energy audits, you could do efficiency upgrades to reduce your bill or do onsite renewable energy.

For many people, the summer energy bill can be hard to manage, and this gave us a chance to reduce emissions while giving people more money for their families. It's also been really valuable to our school districts, which have taken advantage of direct pay to help do energy efficiency upgrades.

It also helped bring a Chinese solar manufacturing company to west Phoenix, an area that is a predominantly Latino with a higher rate of unemployment. These were great high-wage jobs in an area that really benefited.

I am concerned that if the Inflation Reduction Act and other provisions don't go forward that these companies might choose to manufacture in China, where labour costs are cheaper.

How has the administration's policies affected your community?

The biggest impact in the Phoenix metro area has been in the electric vehicle and battery production area. We've had some companies decide to not continue with their Arizona sites. From our small businesses, we're hearing a lot of concern about the uncertain environment. Many of our companies in the energy area made investments based on government commitments.

There's also a huge amount of uncertainty about which of our federal grants will be able to continue. We recently received an executive order update that there's concern now about infrastructure for bicycles. For so many of the kids in my city, that's how they get to school, and for so many others it's how they get to work.

What role can cities play in the coming years in ensuring a just transition?

I suspect local government will have to lead the way. We're trying to work with our business, philanthropic and academic communities to get more done. We recently went to our voters with two measures. One is a bond that included investments in energy efficiency and renewable energy, and then at the county level we had a transportation election. More local governments will need to be creative about the funding.

But we also have seen a silver lining of people talking about how important it is to have the support to reduce their energy bills and invest in solar energy.

This interview has been edited for length and consistency.

(Reporting by Carey L. Biron; Editing by Ayla Jean Yackley.)