If you are a member of the media, please email ngarcia@azcc.gov or call (602) 542-0728.
If you are a member of the media, please email ngarcia@azcc.gov or call (602) 542-0728.
Phoenix, Ariz. – The Maricopa County Superior Court has issued a stay in the Residential Utility Consumer Office (RUCO) v. Arizona Corporation Commission (ACC) legal proceedings. The case involves a challenge to the Commission’s adoption of the Formula Rate Policy - an adjustable rate mechanism for utility ratemaking. Since the main legal challenge is still pending in an Arizona appellate court, the Superior Court decided to issue a stay, halting a hearing in this matter. The Superior Court ruled that it would be a waste of judicial time and resources to conduct further legal proceedings while the case goes through the appeals process.
By way of background, the Commission adopted the new ratemaking policy in December 2024, which allows electric, water, wastewater, and gas companies to use an annual rate adjuster mechanism (ARAM) to help determine utility rates in a manner that reduces costs, reduces potential rate shock and reduces regulatory lag, all of which provide financial protections for ratepayers.
Chairman Nick Myers stated, “The use of adjusters, including the ARAM, is an important policy in reducing rate shock to consumers and reducing regulatory lag. We will continue to utilize this mechanism and defend it in court.”
RUCO, along with other organizations, disagree with the adoption of the ARAM policy, contending that these adjusters must be enacted as a formal rule under the Administrative Procedure Act (APA). RUCO filed a lawsuit in the Maricopa County Superior Court challenging the ARAM and its recognition by policy. In June 2025, the Superior Court dismissed the lawsuit against the ACC. RUCO filed an appeal with the Arizona Court of Appeals, and in November 2025, the appellate court remanded the case back to Superior Court for a hearing on whether the ARAM policy should have been adopted as a rule through the APA procedure.
Several major utilities, including Arizona Public Service (APS), Tucson Electric Power Company (TEP), UniSource Energy Services, Southwest Gas, Arizona Water Company, and EPCOR Arizona have already integrated an ARAM in their current rate case applications.
Ultimately, the Arizona Court of Appeals will resolve this legal challenge, which will have a significant impact on the future of utility ratemaking in Arizona, and ratepayers’ monthly bills.