NewsLocal NewsInvestigations


Lawmakers target AZ Corporation Commission's power, clean energy rules

Arizona Corporation Commission
Posted at 7:52 PM, Feb 02, 2021
and last updated 2021-02-02 21:59:54-05

PHOENIX — State legislators have introduced several bills focused on curbing Arizona Corporation Commission's (ACC) authority to complete proposed clean energy rules that require electric utilities to use 100% carbon-free sources by 2050.

The Commission, a statewide elected five-person board, sets rates and energy policy for investor-owned electric utilities in Arizona.

The rules, which passed 4-1 with bipartisan support in November, are in the final stage of a years-long process to get consensus amongst Commissioners, utilities, and dozens of stakeholders.

While rate making is an explicit constitutional duty for the ACC, some Republican legislators argue that setting the energy policy that determines those rates is outside of the Commission's purview.

House Bill 2248 and its twin Senate Bill 1175 would undo the proposed rules by stripping the Commission's authority to make the changes and give that power to the legislature.

"Their authority is to set rates," Senator David Gowan (R-Sierra Vista), a co-sponsor explained in a January 27 Natural Resources Energy and Water Committee hearing. "That's what's dictated in the Constitution itself. It isn't doesn't say they have the ability to set policy. They're not the fourth branch as they would love to be. There are three branches of government. And we happen to be named the first branch of government in our Constitution."

But former Commissioner Kris Mayes, who co-authored the state's current clean energy rules, told ABC15 the policies and rates are too intertwined to separate between two different governmental bodies.

"It is impossible to divorce ratemaking from energy policymaking because of the way rates are set by the Corporation Commission," said Mayes who served on the Commission from 2003 to 2010.

Rates are determined based on the costs of the investments that utilities make, plus a statutorily allowed return on equity. Mayes said because of its Constitutional requirement to set just and reasonable rates, the Commission has a responsibility to direct utilities to invest resources at the lowest price for ratepayers.

"And today, that means enacting clean energy standards that require the utilities to use the least cost resource, which is solar, wind, biomass, biogas, landfill gas, renewable energy," Mayes said.

Both HB2248 and SB1175 passed the Natural Resources Water and Energy committees in the House and Senate along party lines with Republicans voting in favor and Democrats voting against.

A different bill, HB 2737, would allow a single legislator to direct the Arizona Attorney General to investigate "any decision order or rule" that a lawmaker thinks is beyond the Commission's authority or any statute that a lawmaker thinks the ACC is not enforcing.

If the AG finds a violation, the Commission would have 30 days to come into compliance. If the Commission disagrees, the AG would be required to bring the case to the state Supreme Court. If the Commission loses the case the Legislature would withhold 10% of its budget.

"That legislation is also completely unconstitutional; it almost feels vindictive," Mayes said.

Bill sponsor, Representative Jacqueline Parker (R-Mesa) told ABC15 she was not available to discuss the legislation. It was originally scheduled to be heard by a House committee on Tuesday. but was held by Parker.

Mayes believes each of the bills are in direct response to the passage of the updated clean energy rules.

"The legislature doesn't like the fact that the Commission, and the utilities, and corporate Arizona and the environmental community all are moving forward together at the Commission on clean energy rules to move this state forward," she said.