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Retail Choice Advocates Seek To Set Next Steps In Arizona Review Of Electric Choice

Offer Policy Statement That Would Direct Investor-Owned Utilities To Propose Programs For Direct Access Or Buy-Through

December 10, 2018

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Reporting by Paul Ring • ring@energychoicematters.com

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The Arizonans for Electric Choice and Competition ("AECC") and Calpine Energy Solutions, LLC ("Calpine") have requested that the Arizona Corporation Commission adopt a process for its next steps in reviewing electric choice issues, and sought the adoption of a policy statement that would direct all investor-owned electric utilities to include proposals allowing for customers to permanently transition to Direct Access service and/or buy-through service as part of the rate period after their next general rate case

In a motion, AECC and Calpine said that, although Staff proposes to hold three more workshops in 2019 (January, April, July) to address other potential electric industry rule changes currently housed in the same docket as the electric choice review, "there is no indication of how the issues of integrating competition and choice under Arizona's current energy regulatory framework will move forward."

"Additionally, Staff does not identify a deadline for providing the Commission with a draft set of rules to consider in order to implement direct access should it ultimately decide that choice and competition in electricity is in the public interest," AECC and Calpine said

"AECC and Calpine recognize the importance of other topics the Commission wishes to address in this broad rulemaking proceeding. However, as was made abundantly clear during the December 3, 2018 workshop, a substantive discussion involving retail electric competition must encompass several issues, including but not limited to utility buy-through programs that can be implemented to bring choice to a wider array of consumers in a more immediate timeframe (e.g. Arizona Public Service Company's AG-X program), energy market structure, transmission planning and access, system reliability, municipal and community choice aggregation, the role of Electric Service Providers, the legal impact of the Phelps Dodge decision, default service and consumer protection. AECC and Calpine submit that addressing such retail competition issues warrants a separate docket and procedural schedule that can run in parallel with the instant proceeding. Indeed, one of the first determinations that the Commission should make is whether the existing Retail Electric Competition rules can work as a framework for the implementation of direct access, on whatever scale, or whether the Commission should be considering a whole new set of rules. This is a determination that the Commission should make early in the process, and not sometime after all the other workshops have been concluded in this proceeding at the end of July 2019. Similarly, if the Commission determines that integrating an AG-X type buy-through program for all investor-owned utilities serves the public interest, such a policy should be adopted prior to the filing of individual rate applications by these same utilities," AECC and Calpine said in their motion

To this end, AECC and Calpine encouraged the Commission to adopt the following policy statement on retail electric competition during its December 17, 2018 Open Meeting:

"It is the policy of the Arizona Corporation Commission to encourage the development of Direct Access and other market opportunities, such as buy-through service. The Commission directs all investor-owned electric utilities to include proposals allowing for customers to permanently transition to Direct Access service and/or buy-through service beginning in the rate effective period following their next general rate cases. These market options should also be incorporated into their integrated resource plans of these utilities and, when possible, be used as an option to defer or displace the need for acquiring incremental utility generation resources."

AECC and Calpine also requested that, in addition to adopting the above policy statement, the Commission also issue an order in this proceeding that:

1. Requires the Commission and all interested parties and stakeholders to address direct access and retail electric competition in the docket specifically opened to address these issues, E-00000W-13-0135, with a procedural conference to establish a procedural schedule to be held no later than January 10, 2019; or

2. Directs Staff to open a separate rule making docket specific to the existing Retail Electric Competition rules, with a procedural conference to establish a procedural schedule to be held no later than January 10, 2019, and

3. Under either scenario 1 or 2 above, establishes a deadline for a proposed set of Retail Electric Competition rules for the Commission to consider no later than December 31, 2019.

Docket RU-00000A-18-0284

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