Phoenix, Ariz. —   The Arizona Corporation Commission voted on 17 matters, including securities, electric, and water items.  Highlights from the meeting include:

 Securities

• Edward D. Jones and Co.

 Utilities

• Flagstaff Ranch Water Co., Inc. and Cactus State Utility Operating Company, LLC
• Arizona Public Service Company
• ACC Inquiry into Possible Modifications to the Commission’s Test Year Rules

Edward D. Jones and Co. (S-21347A-25-0 0005) –  The Arizona Corporation Commission has joined a $17 million enforcement settlement with securities dealer Edward D. Jones & Co., L.P. (Edward Jones). This settlement resulted from a multi-state investigation into Edward Jones’s supervision of customers paying front-load commissions for Class A mutual fund shares in light of later moving brokerage assets into fee-based investment advisory accounts.  The four-year investigation was led by a working group of 14 state securities regulators that are members of the North American Securities Administrators Association (NASAA).

Flagstaff Ranch Water Co., Inc. and Cactus State Utility Operating Company, LLC. (E-02502A-22-0324) -  The Commission voted 4-1 , with Commissioner Rachel Walden dissenting, to approve the sale of assets and transfer of the Certificate of Convenience and Necessity of Flagstaff Ranch Water Company, Inc., a nonviable water utility, to Cactus State Utility Operating Company, LLC. There was a dynamic discussion about the 18 cellular antennas attached to its water tank and whether the Commission should grant retroactive approval of the carrier lease agreements, otherwise, the sale would have been jeopardized.  Flagstaff Ranch Water Co. initially failed to seek Commission approval of the leases.  Over half the lease proceeds were used for the system, a little less than half went to the shareholders. A forensic accounting analysis showed that a total of $3.3 million was received through the leases from 2005 to 2022, and that as of December 31, 2022, $1,712,729 of that revenue was used for operations, infrastructure and services, or remained in utility accounts, for the benefit of ratepayers, and a total of $1,595,000 was distributed to shareholders.  The Commission’s lead engineer raised concerns regarding the installation of cellular equipment and the structural integrity of the water tank.  Cactus State, the new owner, agreed to assume full responsibility and assume the costs of any needed repairs to the water tank, assuring the Commission that those costs would not be passed on to ratepayers.  The Commission advised this case serves a warning to other utility companies to obtain Commission approval first, before installing leased equipment on their infrastructure.  “I still have heartburn over the concept that these funds were derived from cell phone tower leases that were not approved by the Commission,” said Chair Kevin Thompson while explaining his vote.  “As Commissioners, we take votes every meeting that set the precedent moving forward. My personal conviction is that those funds should go toward the benefit of the ratepayers.  The ratepayers paid for those water tanks, and the ratepayers should benefit.”

Arizona Public Service Company (E-01345A-22-0144) - The Commission unanimously approved the Power Supply Adjustment (PSA) rate for Arizona Public Service Company (APS) customers to go into effect on March 1, after Commissioners thoroughly questioned the utility about its spending and calculation of the funds.  The PSA will increase by $0.002 per kWh, and according to APS’ calculation and Staff review, the impact on the average residential customer using 1,050 kWh would be an increase of $2.10 per month.  The increase covers the prices the company has already paid to fuel its power plants and purchase renewable energy via Purchase Power Agreements (PPAs). The PSA adjuster is an annual adjustment that would otherwise go into effect automatically unless the Commission decides to review the proposal. The PSA is a pass through cost to account for actual spends by the utility and APS does not earn a profit on the PSA.  “In the interest of saving tens of millions of dollars… per year for the ratepayer, I do support an expedited payoff schedule, and I vote aye,” said Commissioner Rachel Walden while explaining for vote. 

ACC Inquiry into Possible Modifications to the Commission’s Test Year Rules (AU-00000A-23-0012) –The Commission met in executive session to receive legal advice regarding two pending applications for rehearing regarding Decision No. 79647.   Subsequently, at the Open Meeting, the Commission voted 5-0 to deny the pending applications and directed the Office of Legal Counsel to prepare a written order.