News Release   
 For Immediate Release | 5-8-18   
 Media Contact | Holly Ward   
 Direct | 602-542-3847   
 E-Mail | hward@azcc.gov   
     
 
May Open Meeting Addresses Railroad Safety, Tax Reform Telecommunications Rates, and Water Issues
 
 

PHOENIX — The Arizona Corporation Commission today held its monthly Open Meeting to discuss and vote on various water, electric, securities, and tax reform agenda items. Here’s a brief recap of the meeting highlights:
 
Burlington Northern & Santa Fe Railway Company Grade Crossing Ordered Closed by Commissioners
Today Commissioners unanimously voted to order BNSF Railway Company to close the grade crossing at 35th Avenue and Indian School Roads in Phoenix to vehicular traffic unless public safety improvements are agreed upon by stakeholders prior to May 19, 2018. This decision was made to address grave public safety concerns that Commissioners have for the well-being of the motoring public who traverse that intersection daily.  
“This is dangerous. What has happened to fix this up to this point has not met the mark,” said Corporation Commission Chairman Tom Forese.
On August 16, 2013, the Corporation Commission issued Decision No. 74043, allowing ADOT, BNSF and the City of Phoenix to complete railroad grade crossing upgrades at 35th Avenue and Indian School Road in Phoenix. ADOT’s application to the Commission stated that a pre-signal would be installed south of the existing crossing for northbound traffic at 35th Avenue as a protective measure to ensure public safety.
“I think we need to send a message here that public safety is our top priority,” stated Commissioner Boyd Dunn. “I don’t think we have any other choice at this point but to move forward with this matter to keep stakeholders at the table to find a resolution, because this is a huge liability issue for them.”
 
The City of Phoenix was given 15 months from the Order being signed to complete the project, which was not met. Earlier this year, the City of Phoenix installed new traffic signals on the north side of the existing crossing, not on the south side as was directed in the Order. This has led to confusion for motorists approaching the intersection, creating a hazard to public safety. This particular intersection is the worst grade crossing in the nation according to data from the Federal Railroad Administration, with over 90 incidents since 1972, the year such data began being collected.
Arizona Corporation Commission Chairman Tom Forese docketed a letter to the Commission’s online docket April 13, 2018, asking staff to work with the City of Phoenix in a spirit of diplomacy to ensure that the grade crossing at 35th Avenue and Indian School Road in Phoenix meet satisfactory safety requirements as ordered by the Commission. Because stakeholders have yet to come to a satisfactory resolution to this issue, the Commission made the decision today to exercise its authority under A.R.S. 40-377 to order BNSF to close the intersection to the motoring public unless a fix is agreed to by May 19, 2018.  
 
All items relating to the Burlington Northern & Santa Fe Railway Company can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number RR-02635B-13-0034.
   
UNS Electric, Inc. and UNS Gas, Inc. Pass Tax Savings on to Ratepayers
UNS Electric, Inc. and UNS Gas, Inc. on March 19, 2018, filed with the Commission its applications to refund and defer portions of its savings as a result of the Tax Act. UNS Electric, Inc. reports that the Tax Act will result in a total annual tax savings of approximately $3.8 million, while UNS Gas, Inc. estimates a total annual tax savings of approximately $2.9 million. Both companies propose to refund the tax savings through a combination of customer bill credits and deferments of a portion as a regulatory liability. UNS Electric, Inc. expects that a residential customer with an average monthly consumption of 835 kWh will see a monthly bill credit of approximately $3.07. UNS Gas, Inc. estimates that a residential customer with an average monthly consumption of 40 therms will receive a bill credit of approximately $2.20. The Company plans to refund 100% of its tax savings back to both electric and gas customers during the remaining seven months of 2018 beginning in June.
Following Commissioner Olson’s January 31 Utility Tax Reform Workshop, Commissioners unanimously voted to approve the requirement of all public service corporations listed in the docket to address ratemaking impacts resulting from the recent federal tax reform. Commissioners are committed to ensuring that all utility customers receive tax break benefits by requiring utility companies to pass on any financial gains made from the new tax cuts to their ratepayers. Commissioners in February enacted a requirement that all public service corporations listed in the docket must file appropriate information with the Corporation Commission by April 7, 2018, to address how they will pass tax reform savings on to ratepayers.
All documents relating to UNS Electric, Inc.’s application for approval of a bill credit related to federal income tax rate reduction can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number E-04204A-18-0065.
All documents relating to UNS Gas, Inc.’s application for approval of a bill credit related to federal income tax rate reduction can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number G-04204A-18-0066.
 
Century Link
On March 16, 2018, Century Link filed an application for a rehearing of Decision No. 76595. Century Link claims that the Corporation Commission has no authority to review the impact of the Tax Act upon its rates because Century Link is a competitive carrier and its rate are not set using cost-of-service ratemaking, also arguing that Decision No. 76595 is contrary to competitive pricing rules. As a result, Corporation Commission Chairman Tom Forese asked that the Commission discuss the potential reopening of Decision No. 73354 (August 21, 2012) which authorized streamlined ratemaking for Century Link to determine whether its rates continue to be just and reasonable given recent events.
During the January 2018 Tax Reform Workshop held at the Arizona Corporation Commission, Century Link asked to be excluded from the utility tax reform effort, arguing that competitive telecommunications companies do not set their rates and that the Commission does not approve their rates. During this exchange, Commission Justin Olson stated that the Commission still has a role in establishing a maximum and a minimum rate that these competitive companies can charge. Commissioner Olson proposed reducing these maximum and minimum rates down to account for the tax savings that resulted from federal tax reform.
All documents relating to Federal Tax Income Tax Reform Rate Adjustment can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number AU-00000A-17-0379.     
All documents relating to Century Link can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number T-0105B-11-0378.                                     
  
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ABOUT US
The Arizona Corporation Commission was established by the state’s constitution to regulate public utilities and business incorporation. The five Commissioners elected to the Corporation Commission oversee executive, legislative, and judicial proceedings on behalf of Arizonans when it comes to their water, electricity, telephone, and natural gas resources as well as the regulation of securities, pipeline, and railroad safety. To learn more about the Arizona Corporation Commission and its Commissioners, visit azcc.gov.