by Matthew Holloway | Dec 7, 2024 | News
By Matthew Holloway |
The Arizona Free Enterprise Club released a statement on Wednesday severely criticizing the Arizona Corporation Commission (ACC). The statement came after the ACC, which is charged with protecting Arizonans from a non-competitive energy industry, voted to abdicate its duty by allowing formulaic rates that increase automatically year over year, as opposed to every increase being subject to public scrutiny and requiring approval.
The vote on Tuesday was carried 3-2 with commissioners Anna Tovar and Lea Márquez Peterson dissenting. According to the ACC, its policy statement “allows regulated utilities to propose formula rates in future rate cases. Under this approach, the ACC reviews and accepts as the rate a formula for calculating the utility’s cost of service, including clear definitions of inputs to that formula and a process for updating rates every year as the utility’s costs change.”
The commission claimed, “Formula rates will still be monitored closely to ensure that the utility does not over-earn relative to the cost of service for providing service (plus a reasonable return on invested capital), while continuing to provide service safely and reliably.”
The Arizona Free Enterprise Club responded in a statement saying:
“Following contentious double digit rate hikes being approved and ESG Resource Plans committed to going ‘Net Zero’ by 2050 being rubber stamped, the Commission has rushed through approving new rules masquerading as a mere ‘policy statement’ that could insulate utilities and the Commission from having to face ratepayers in future rate cases. The ‘policy statement’ would depart from traditional rate making and pursue ‘formula based rates’ offloading risk from investors to ratepayers and baking in automatic rate increases with little transparency or opportunity for ratepayer engagement.
“The only support for this ‘policy statement’ came from the utilities themselves. The Commission is charged to protect ratepayers by regulating the utilities, not the other way around. The Commission should pump the brakes, not rush through major rulemaking decisions in a lame duck session.
“The Arizona Free Enterprise Club is committed to protecting ratepayers, ensuring affordable and reliable energy in Arizona. We will continue to work to ensure utilities will not be able to force their captive ratepayers to foot the bill, especially through automatic rate hikes, for their costly goal to go ‘Net Zero’ by 2050 by shuttering reliable sources of energy generation to build out expensive and unreliable wind, solar, and battery storage projects.”
Attorney Dan Pozesfsky of Arizona’s Residential Utility Consumer Office (RUCO), expressed a similar view according to 12News saying, “Trying to implement formula rates through a policy statement rather than through rules is inappropriate, illegal and in this case denies due process.”
The outlet reported that the ACC, ignoring its own plans for the vote, rushed to schedule it noting that in a previous meeting Commission Chairman Jim O’Connor had told stakeholders, “Give us feedback. Bring us guardrails.” He added, “I eagerly look forward to that kind of input at our next workshop.” However, no workshop occurred and no published legal opinions were issued.
Diane Brown of the nonprofit Arizona PIRG Education Fund stressed that the vote was conducted with critical questions about the scheme remaining unanswered. She said, “This is precisely to me why it was so important to have the legal memo that this Commission said they would get. While there are statements that there will be increased transparency, I’m not seeing evidence of that. It is troubling to me that we haven’t heard from the ALJ (administrative law judge). We have not heard from Staff.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Matthew Holloway | Nov 26, 2024 | News
By Matthew Holloway |
With Democrat Commissioner Anna Tovar absent, the Arizona Corporation Commission (ACC) voted 4-0 vote on Friday to direct its Office of General Counsel to launch an investigation into alleged legal and ethical violations by Tovar.
The vote was conducted during a Staff Open Meeting and addressed specific allegations of ACC Code of Ethics and Arizona Administrative Code violations.
At the start of the meeting, Chairman Jim O’Connor said he couldn’t “help but share that I’m disappointed in Commissioner Tovar,” for not “hav(ing) the courtesy to show up,” after she reportedly indicated she would do so. “It’s very, very disappointing,” he added.
The Commission then entered into Executive Session for approximately thirty minutes before returning to the public-facing meeting.
Upon returning to the public meeting O’Connor announced, “It is with a deeply troubled heart that I will now make a motion to authorize our Office of General Counsel to undertake an official inquiry to determine whether Commissioner Tovar and her office staff have violated our code of ethics as amended to include the code of conduct, the Arizona State statutes, and the Arizona Administrative Code regarding: interference in and disclosure of confidential personnel-related information and whether she or her staff have harassed public servants of the State of Arizona employed here at the commission.”
He then directed General Counsel Tom Van Flein: “With respect to two things: that that would go back to include, the examination, all the way back to last year with respect to J.P. Martin in terms of potential harassment there, to investigate that. To do that expeditiously and return to the commission in ten days with a recommendation.”
According to Juan ‘JP’ Martin’s LinkedIn profile, he served as Legislative Liaison & Public Information Officer to the ACC from January to December 2023 before leaving the commission to become Deputy Communications Director to Arizona Secretary of State Adrian Fontes.
Van Flein said in a statement that the ACC Office of General Counsel will begin the investigation immediately and complete the inquiry on behalf of the Commission within ten days. This would put completion of the probe on or about December 2nd or 3rd.
Tovar, formerly an Arizona State Senator and Senate Minority Leader, announced in February that she would not seek reelection. She is due to step down from the Commission in January 2025.
Announcing her decision in a post to X at the time, Tovar wrote, “The current Corporation Commission needs a shake-up to gain renewed focus on actually serving the people of our State and that’s why I will not be seeking a second term on the Commission. I look forward to doing all I can to support candidates who will bring new voices and perspectives to this vital work.”
Tovar is the only Democrat presently serving on the commission. Along with current Chairman Jim O’Connor, she will be replaced by newly elected Republican commissioners Rene Lopez and Rachel Walden in January.
Before serving on the commission and in the Senate, Tovar served as a member of the Arizona House and Mayor of Tolleson after working as an educator.
AZ Free News reached out to Commissioner Tovar requesting comment, however, she did not reply by the time of publishing this article.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Matthew Holloway | Sep 12, 2024 | News
By Matthew Holloway |
During its meeting on September 5th, the Arizona Corporation Commission (ACC), led by Republican Commissioner Nick Myers, voted unanimously to approve a Certificate of Environmental Compatibility (CEC) allowing the Midtown Reliability Project of the Tucson Electric Power (TEP) company to move forward.
The project is a comprehensive upgrade to the now-overloaded 46 kV high-voltage transmission lines that run through midtown Tucson to a “more flexible, higher voltage” 138 kV monopole line above ground, according to a press release from the Commission.
A major controversy unfolded with some in Tucson calling upon the ACC to select a partially underground routing that would increase the cost of the project by millions of dollars and meet the expense through an end-user fee.
Commissioner Myers commented after the vote, “I understand why some Tucson residents would want this project constructed below ground. However, constructing the project below ground is not needed for safety, reliability or other utility operational reasons; therefore, it is not acceptable for all TEP customers to shoulder the $67 million cost for undergrounding the project.”
He added, “I am pleased the Commission approved this important grid-reliability project, while at the same time protecting TEP customers from unnecessary undergrounding expenses.”
In a corresponding press release, TEP explained, “The ACC voted unanimously today to authorize above-ground construction along TEP’s preferred route for the project, which primarily follows West Grant Road, North Park Avenue, Euclid Avenue and East 36th Street to link two TEP substations to the planned Vine Substation north of the University of Arizona campus. The ACC also authorized construction along an alternative route. An interactive map of the approved corridors can be viewed online.”
The utility added a timeframe saying, “With growing energy demands nearly reaching the capacity of existing, lower-voltage facilities, TEP will work to complete the transmission line and substation by the summer of 2027 to maintain service reliability.”
Myers’ fellow Republican, ACC Chairman Jim O’Connor, told KOLD, “A big kudo to the parties for finding a solution that will enable this project to move forward. This transmission project will further enhance reliability and modernize a critical portion of our electric grid in Tucson.”
The local outlet noted that a sticking point for the project has been pushback from the midtown community and many advocating for subterranean lines. In 2023, KOLD’s Jack Cooper wrote in a post to X that the opposition to the above-ground routing were “worried about property values and want the lines buried.” However, as the ACC noted in its release, “The Commission unanimously decided to protect ratepayers from that financial impact.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
by Daniel Stefanski | Aug 12, 2024 | News
By Daniel Stefanski |
Arizonans are using a lot of energy throughout this hot summer in the Valley of the Sun.
Last week, the Arizona Corporation Commission issued a press release to alert readers that Arizona electric utilities had “set new records for peak energy demand.”
According to the communication from the state government agency, the record for peak energy was reached on Sunday, August 4, between 5-6pm, when the high temperature for that day was 116 degrees Fahrenheit.
Republican Corporation Commissioner Kevin Thompson told AZ Free News, “Our utilities have done an exceptional job of keeping the lights on and air flowing through new record setting peak demand this summer. There’s no coincidence to the fact that despite our extreme heat and load growth, Arizona hasn’t suffered the same crippling energy pitfalls of California. Arizona regulators have focused on an ‘all of the above’ generation approach bolstered with dispatchable baseload to keep our grid reliable and affordable. This Commission has worked relentlessly to do away with energy mandates that cost ratepayers more money and get in the way of what utilities should be primarily focused on: generating electricity.”
“Our utilities continue to deliver reliable power in the face of excessive temperatures and ever-increasing electricity demand. Arizona continues to be ranked in the top ten of states with the most reliable power—a critical statistic for which each of us is thankful during these record-breaking temperatures,” said Chairman Jim O’Connor.
Arizona Public Service (APS) used 8,212 MW on August 4 (compared to 8,162 MW on that date in 2023). Salt River Project used 8,219 MW in 2024 (compared to 8,163 MW in 2023). And TEP / UNS just barely missed out on the record, finishing with 2,917 MW on July 8 (compared to 2,969 MW in 2023). On August 4, TEP’s peak demand reached 2,661 MW.
“Our utilities are facing unprecedented challenges in balancing the needs of our energy demands during this hot summer while ensuring energy reliability at the most affordable rates,” said Commissioner Lea Márquez Peterson. “Their summer preparedness planning for peak demand is vitally important to keeping our families safe and cool in the summer.”
The Commission shared that these utilities have made assurances “that they are prepared to produce a combined total of more than 23,000 megawatts of electricity to meet customers’ daily summer demands.” APS has 1.3 million customers; SRP, 1.1 million customers; and TEP / UNS, 719,000 customers.
At the end of its release, the Commission “encourages Arizonans to be mindful and help reduce electric demand during peak hours. Actions, such as lowering energy use during peak hours and signing up for demand response programs can contribute to reducing overall customer demand and reducing monthly electric bills.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
by Corinne Murdock | Feb 9, 2024 | News
By Corinne Murdock |
A vote by the Arizona Corporation Commission (ACC) earlier this week moved to limit energy companies’ push to meet Environmental, Social, Governance (ESG) goals.
The ACC voted 4-1 on Tuesday to draft rules to repeal existing rules and mandates for renewable energy as well as electric and gas energy efficiency: the Renewable Energy Standard and Tariff (REST) Rules and the Energy Efficiency Standards (EE), also known as the Demand Side Management (DSM). Per the commission, the rules and mandates for REST and EE/DSM resulted in incentives for renewable energy projects and services, since utilities were required to file proposals describing REST compliance.
Commissioner Ana Tovar was the sole “no” vote on the motions. The standards behind EE/DSM expired in 2020, but previous commissions didn’t repeal the rule.
The commission noted in Wednesday and Thursday press releases that the rules, tracing back to 2006 for REST and 2010 for EE/DSM, have cost customers nearly $3.4 billion through corresponding surcharges. REST surcharges have cost ratepayers nearly $2.3 billion, while EE/DSM surcharges cost nearly $1.1 billion.
Commissioner Nick Myers said in Wednesday’s press release that the rules and mandates were unnecessary and would result in a drastic cost increase to consumers.
“I believe it is time for the Commission to consider repealing these rules and mandates that appear to unnecessarily drive-up costs,” said Myers. “Utilities should select the most cost-effective energy mix to provide reliable and affordable service, without being constrained by government-imposed mandates that make it more expensive for their customers.”
In Thursday’s press release, Chairman Jim O’Connor — who filed the motion to repeal REST — said that the commissioners from nearly 20 years ago were “well-intentioned” in their vision for reducing the state’s carbon footprint through the REST rules, but that no cost controls were ever implemented, at the detriment of ratepayers.
“In 2006 when the REST rules supplanted the EPS rule, concerns by the dissenting Commissioner cited the lack of cost control measure that would negatively impact ratepayers, and the then-Chairman Hatch-Miller intended that the Commission review annually whether it was in the best interest of the ratepayers. Those reviews never occurred and costs were never considered,” said O’Connor.
O’Connor further remarked that contracts in pursuit of environmental mandates ultimately burdened the ratepayers.
“We began the steps needed to repeal a rule that has cost ratepayers billions of dollars in out of market priced contracts,” said O’Connor. “Mandates distort market signals and are not protective of ratepayers.”
Commissioner Kevin Thompson — who filed the motion to repeal EE/DSM — stated in the press release that the repeal marked a victory for ratepayers, and the end of “feel-good programs” that lack affordability and reliability.
“Arizona utilities have collected over a billion dollars in ratepayer surcharges for efficiency initiatives that have done little to avoid the need for new generation and have benefitted a select few,” said Thompson. “Energy efficiency programs are routinely pushed by vocal special interest groups where the economic benefits favor a small group of customers, and the large majority of ratepayers foot the bill.”
Prior to the ACC acting on the draft rules, the commission will open up multiple public comment opportunities. The draft rules and intake for public comment will be located on the following ACC dockets: gas utility energy efficiency, electric utility energy efficiency, and renewable energy.
The entire rulemaking process will take over a year, according to commission staff. The REST and EE/DSM repeal are part of a greater, five-year review of existing ACC rule packages.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
