PHOENIX – The Arizona Corporation Commission held its monthly Open Meeting on December 6, 2022, to discuss and vote on various utilities, railroad, and securities items. Below you can find highlights from the meeting:
Coal Impacted Communities
Commissioners voted 3-2 to deny a proposed order from Commission Staff which denied using ratepayer funds at this time for Coal Impacted Communities. The docket deals with assistance to those in areas where coal generation power plants have been closed or will be closed soon, often ahead of their expected lifetimes. Specifically, this docket is a response to Arizona Public Service Company (APS) announcing in 2020 that it would be closing Four Corners Power Plant in 2031, seven years sooner than its expected retirement date of 2038.
During recent rate cases for both APS and Tucson Electric Power Company (TEP), assistance packages were contemplated for those in the affected areas where those utilities were closing power plants in various locations in Northern Arizona, often on tribal lands. Those power plants are typically the largest, or one of the largest employers and economic engines in those communities. Because of that, the Commission considered ways to alleviate the impact of the closures on the communities while balancing the impact to ratepayers.
In 2021, as part of an APS rate case, the Commission allowed $10 million to be paid to the Navajo Nation, $1 million to the Hopi Tribe, and $500,000 to communities in Navajo County to be recovered through a renewable energy surcharge on APS customer bills. Since 2021 however, the tribes, public interest groups, and non-governmental organizations associated with the tribes have asked the Commission to award more payments by ratepayers to ameliorate the future harms of early retirement and to compensate the past harms of operating coal plants on tribal land.
At the Commission’s 2022 Regular Open Meeting, the commissioners voted 3-2 to reject the proposed order from Commission staff, which would have required APS to honor its prior commitments to the Navajo Nation without assessing ratepayers additional charges. By rejecting the proposed order, however, the Commission left open the possibility of giving more funds to the tribes in the future.
All documents related to this agenda item can be found in the Corporation Commission’s online docket at https://edocket.azcc.gov and entering docket number E-00000A-21-0010.
Arizona Public Service Company Financing Application Approved
Commissioners voted to approve a financing application from Arizona Public Service Company (APS). The application from APS is an update to a previously approved financing application from 2020. In the 2020 Decision, APS was authorized to issue, sell, and incur continuing long-term debt in an aggregate amount not to exceed $7.5 billion for a period of more than 30 days, and to issue, sell, and incur continuing short-term debt in an aggregate amount not to exceed 7-percent of APS’s capitalization plus up to an additional $500 million. In its 2022 application APS requested it continuing long-term debt authorization be increased to $8.0 billion and to have the definition of long-term indebtedness revised to exclude Purchased Power Agreements that are finance leases.
All documents related to this agenda item can be found in the Corporation Commission’s online docket at https://edocket.azcc.gov and entering docket number E-01345A-22-0083.
Rose Valley Water Company Rate Increase Approved
Commissioners voted unanimously to approve a rate application and a financing application from Rose Valley Water Company (Rose Valley). Rose Valley is a Class C public service corporation providing water service to approximately 2,400 customers within the City of Peoria in Maricopa County, Arizona. The utility’s current rates were set in 2018.
The Recommended Opinion and Order (ROO) adopts a rate base of negative $292,817, consistent with the company’s request, which is a result of the impact of AIAC and CIAC. Rose Valley will be authorized to incur debt in the amount of $1,491,503 in order to move forward with infrastructure improvements. The utility will be able to collect the debt service on the loan through a loan surcharge of approximately $5.26 per customer per month.
Under the new rates, a residential customer on a 5/8 x 3/4-inch meter with a median usage of 8,468 gallons will see their monthly bill increase by $4.12, or 15.04-percent, from $27.39 to $31.51. With the inclusion of the loan surcharge and the rate case surcharge, the average bill will increase by $10.26, or 37.46-percent, from $27.39 to $37.65.
All documents related to this agenda item can be found in the Corporation Commission’s online docket at https://edocket.azcc.gov and entering docket numbers W-01539A-22-0065 and W-01539A-22-0064.
Commission Finds Tucson Man Fraudulently Promoted Cannabis Investment Online
The Arizona Corporation Commission ordered Richard J. Daratony of Tucson to pay a $20,000 administrative penalty for committing securities fraud while not registered to offer or sell investments in Arizona.
The Corporation Commission found that Daratony, doing business as Dr. Richard's High Desert Naturals and High Desert Natural(s), posted an advertisement to Craigslist in the Phoenix, Arizona section that requested investors for a cannabis grow in California. The Commission found the online advertisement requested a minimum investment of $1,000, and a maximum investment of $100,000, referenced "investments" through loans and "contracts," and directed viewers to send an email to Daratony to receive a contract.
However, the Commission found the contract contained a false statement that Dr. Richard's High Desert Naturals, an Arizona LLC was the borrower, when no such LLC existed, and contained a materially misleading statement implying that the securities referenced in the Craigslist.com advertisement were not subject to regulation.
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-21134A-20-0388.