SEPTEMBER 20 NEWS: ARIZONA CORPORATION COMMISSION (ACC) UPDATES

ACC decides on Tucson Electric Power (TEP) and UNS Electric (UNSE) “Phase 2” rates for distributed/rooftop solar:

• “Phase 2” of the TEP and UNSE rate cases came to a conclusion this month when the Commission acted on the Recommended Opinion and Orders (ROO) issued in April by the Administrative Law Judge overseeing both matters.
• Both cases addressed rate design for rooftop solar. A quick summary of the TEP ROO can be found here.
• At a prior Open Meeting in June, Commissioners heard over two hours of testimony on the TEP matter, including discussion of Commissioner Andy Tobin’s proposed amendment, which would have made a number of modifications to the TEP ROO. Solar advocates opposed these proposed changes.
• At the Open Meeting, the TEP ROO passed 3-to-2 with Commissioners Boyd Dunn (R), Justin Olson (R), and Bob Burns (R) voting in favor. An amendment offered by Commissioner Burns — that was opposed by the Company (see here) — failed.
• UNSE rates were also passed under the ROO, 4-to-1, with Commissioner Tobin voting no.
• Both decisions reject grid access charges, accept Vote Solar’s proposed meter fee, eliminate net energy metering (NEM), and replace NEM with a lower export rate.
• See Vote Solar’s press release describing the decision here.

Hearings end in the Arizona Public Service Company (APS) Four Corners Rate Case. Decision expected by the end of the year:

• Earlier this year, APS filed an application to increase rates to recover ~$400 million for the cost of new pollution controls installed at the Four Corners Power Plant in Farmington, New Mexico. That application was filed in Docket No. E-01345A-16-0036.
• Hearings in the matter began last Wednesday and ended on Friday. Video of the hearings can be accessed here.
• Under the APS rate case settlement agreement approved by the Commission in August 2017; rates to address the cost of these pollution controls must be adjusted no later than January 1, 2019. As a result, a ROO from the Administrative Law Judge is anticipated this fall, and a Commission decision is likely in November or December.
• Groups participating in the hearing included APS, the Arizona Energy Policy Group (a new utility investor group headed by former ACC Commissioner Bob Stump), Walmart, Arizona Community Action Association, Arizonans for Electric Choice and Competition/Freeport McMoRan, the Residential Utility Consumer Office, Commission Staff, Western Resource Advocates, the San Juan Citizens Alliance, Dine CARE, and To Nizhoni Ani.
• There are several issues on the table, including: the total amount of the revenue increase; the fair value rate of return (FVROR); whether or not the depreciation of the plant’s pollution control equipment should be accelerated to align with the expiration of the plant’s current coal contract (which expires in 2031); whether or not limited-income customers should be held harmless from the proposed rate increase; and whether or not APS should begin planning for a just transition of the plant.