Arizona Corporation Commission July Open Meeting Highlights
Phoenix—The Arizona Corporation Commission completed its monthly Open Meeting today followed by a Staff Meeting to discuss and vote on various water, electric, pipeline, and securities agenda items. Here is a brief recap of the meeting highlights:
Commission Finds Phoenix Man Defrauded Hispanic Christians with Promissory Notes
The Corporation Commission ordered Jaime A. Verdugo of Phoenix to pay $381,954 in restitution and a $20,000 administrative penalty for committing securities fraud. The Commission found Mr. Verdugo was not registered to offer or sell securities in Arizona when he solicited multiple promissory note investors, most of whom were from Hispanic Christian communities. The Commission found Jaime A. Verdugo told investors, on behalf of Verdugo Enterprises, LLC, that their money was going to purchase home decor products to fulfill online orders.However, the Commission found Mr. Verdugo mislead investors by stating their money was safe while knowing at least eight prior investors did not receive any investment returns. Also, the Commission found Jaime A. Verdugo failed to inform investors about the company’s unwritten policy to limit payouts to $6,000 every two weeks, which is contrary to the explicit terms of the promissory notes.
All documents relating to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket number S-21064A-18-0402.
Commissioners Briefed on Backlog of Blue Stake Requests
Qwest Corporation, dba CenturyLink QC, briefed Commissioners on its delay in compliance with the Commission's Blue Stake Law, A.R.S. § 40-40-360.21 through 40-360.32. When an excavator is going to dig, they must contact the 811 center and request a “locate ticket” by phone or online at azbluestake.com.It is then the responsibility of the facility owner, in this case, CenturyLink, to go out and mark all their facilities in the area within two days of the locate request.The excavator cannot dig until all the facilities in the excavation area have been marked.
During Wednesday’s meeting, CenturyLink addressed how it originally committed to catch up on its backlog by June 8, 2019, but has lagged on this and is still behind. CenturyLink's plan is to work with its location services contractor and the Commission to resolve the backlog as soon as possible. During the meeting, CenturyLink ensured it will eliminate the backlog of requests no later than August 2, 2019. The parties also agreed that CenturyLink, CenturyLink's location services contractor and Commission Pipeline Safety Staff would hold weekly status update meetings and will file weekly status updates in this docket each Monday between now and August 31, 2019.
All documents relating to this agenda item can be found in the Corporation Commission's online docket athttps://edocket.azcc.govand entering docket number T-01051B-19-0135.
Commission Approved Utility Rate Increase for Ajo Residents
The Commission approved the joint application Ajo Improvement Company filed for an increase to its authorized rates and charges for the company’s water, wastewater and electric divisions. The company is a class C public service corporation providing water, wastewater, and electric service to approximately 1,000 connections each in a one square mile area of Ajo in Pima County. The company has made over $47.8 million of capital improvements since its last rate case, to repair the water, wastewater, and electric division systems. In the company’s application, it requested a 20 percent operating margin for its water and wastewater divisions and 15 percent operating margin for its electric division. In the final decision reached by the commissioners, the company’s rate increase was approved, using a five percent operating margin. The increase will be implemented over a 10-year period. The company will not be allowed to collect lost revenue and interest caused by the phase-in. Other provisions require the company to not file a new rate case until 2027 and to file future rate cases for only one division at a time. The company has agreed to provide $20,000 per year in bill assistance in years one and two of the new rates and $25,000 per year thereafter as an alternative to a low-Income tariff as proposed by Commissioner Kennedy. Lastly, the Commission adopted the Kennedy Amendment that will require the company to make available programs for assistance to deployed service members and a discount to disabled military veterans.
All documents relating to this agenda item can be found in the Corporation Commission's online docket athttps://edocket.azcc.govand entering docket number WS-01025A-17-0361, -0362, -0363.
Arizona Electric Vehicle Policy Implementation Plan Approved
Commissioners voted Wednesday to move forward on electric vehicle policy in Arizona. In January, Commissioners directed staff to develop an implementation plan for its policy on electric vehicles, electric vehicle infrastructure, and the electrification of the transportation sector in Arizona. Two stakeholder meetings were held to gather input for the draft implementation plan that went before Commissioners Wednesday. The approved implementation plan provides guidelines to public service corporations regulated by the Corporation Commission on how to best implement the policy. The plan includes guidelines for electric vehicle pilot programs including a focus on infrastructure, education and outreach, location of charging stations, best practices/consumer protections, rate design, incentives/rebates, and cost recovery. The public service corporation must submit electric vehicle pilot programs for Commission approval.
The plan and all documents related to this agenda item may be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number RU-00000A-18-0284.
Commissioners Approve TEP Electric Vehicle Policy Implementation Plan
Commissioners approved two new tariffs for TEP that allow customers who own electric vehicles to charge at home during off-peak hours at a savings when compared to TEP’s existing tariffs. Guidelines for the electric vehicle pilot programs include a focus on infrastructure, best practices/consumer protections, rate design, incentives, and rebates. The tariffs are intended to incentivize electric vehicle charging during off-peak hours. The proposed rates are optional and are based on existing time-of-use rates. Under the terms of the tariff, customers must have a highway approved battery electric vehicle or plug-in hybrid electric vehicle and appropriate home charging equipment to qualify for the rates. The residential Electric Vehicle Super Off-Peak Time-of-Use Electric Vehicle tariff is very similar to the Existing Residential Time-of-Use tariff. The proposed new rates also encourage customers to charge during off-peak hours.
All documents relating to this agenda item can be found in the Corporation Commission's online docket athttps://edocket.azcc.govand entering docket number E-01933A-17-0250.
Interconnection of Distributed Generation Facilities
Commissioners moved forward with rulemaking on the interconnection of distributed generation facilities Wednesday voting to create a new Article 26 within Arizona Administrative Code Title 14, Chapter 2.
The rules will establish standards for how distributed generation facilities are connected to the existing grid. A distributed generation facility can be any energy-producing source that lies outside a utility's grid, such as rooftop solar, a battery system,or a windmill that generates electricity for its owner's rural property. The rules are intended to ensure that each energy source is safely connected to existing grid infrastructure.
Following Wednesday’s decision, the Commission will have a supplemental proposed rulemaking published in the Arizona Administrative Register. An oral proceeding will be held on September 13, 2019, to allow for oral comments. Written comments may be submitted to the docket.
All documents related to this agenda item can be found in the Corporation Commission's online docket athttps://edocket.azcc.govand entering docket number RE-00000A-07-0609.
APS Request to File RFP for Biomass Facility
Commissioners voted 3-2 to not require Arizona Public Service to file a request for proposal (RFP) to convert a coal-burning unit of the Cholla Power Plant in St. Johns to biomass. On May 9, 2019, APS filed a report summarizing the results of an evaluation of the possibility and potential cost of converting a unit at the Cholla power plant to burn biomass. APS may file an application for approval to make this conversion if it so desires.
All documents relating to this agenda item can be found in the Corporation Commission's online docket athttps://edocket.azcc.govand entering docket number E-00000Q-17-0138.
Consumer Complaint Against Arizona Public Service Company
Commissioners made a motion to reconsider a citizen complaint against Arizona Public Service Company (APS) Wednesday and determined the relief sought in the complaint has been adequately met with a Commission order for APS to file an application for new rates by October 31, 2019.
Commissioners, in their comments Wednesday, noted the importance of this order which includes requiring the utility company to fund and implement a new and targeted customer outreach and education plan, to provide ratepayers information about their current usage and what their bills would be if on their most-economical plans, and to allow customers six months to switch rate plans.
The Corporation Commission Hearings Division submitted an amendment on the Recommended Opinion and Order that was reconsidered by Commissioners Wednesday to outline key decisions made in the APS rate review decision issued last month. The amendment outlines 12 requirements within the Commission’s APS rate review decision including an order to require APS to identify ratepayers whose bills increased by more than nine percent under its current rates, or who are not on their most economical plans, and provide targeted education to help those ratepayers find the best plan for their electricity use.
All documents relating to this agenda item can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number E-01345A-18-0002. The Commission’s rate review docket may be found under docket number E-01345A-19-0003.
Johnson Utilities, LLC Matters Held due to Court Action
A temporary restraining order prevented Commissioners from voting on a proposed 3-year capital improvement plan for Johnson Utilities, LLC. The utility company filed the order in Maricopa County Superior court Wednesday. The judge held a telephonic hearing and, stating she did not have time to research the issue, she signed the temporary restraining order effectively preventing Commissioners their ability and duty to vote on Johnson Utilities matters. Johnson Utilities provides water and wastewater services to the public in portions of Pinal County, Arizona.
All documents relating to this agenda item can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number WS-02987A-18-0050.
Code of Ethics Update
Commissioners amended the Code of Ethics to put in more stringent requirements regarding campaign contributions. Commissioners prohibited campaign contributions of any amount from regulated utilities and their employees. There is an exception for Citizens of Clean Elections Act candidates. It covers candidates running for the Commission, sitting Commissioners running for reelection and Commissioners running for any other local, federal, or state office.
All documents relating to this agenda item can be found in the Corporation Commission’s online docket at http://edocket.azcc.gov and entering docket number AU-00000E-17-0079.
A complete list of agenda items and a broadcast of the Commissioner’s July Open Meeting is available on the Corporation Commission’s website: http://azcc.gov/live.
The Arizona Corporation Commissionwas established by the state’s constitution to regulate public utilities and business incorporation. The Corporation Commission is Arizona’s co-equal, fourth branch of government.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, visithttp://azcc.gov.