Arizona Chair Asks If Joining An RTO Absolutely Necessary For Retail Choice, Whether Utilities Can Be Incentivized To Join
Asks If Utilities Divesting Generation Absolutely Necessary For Retail Choice, Whether Utilities Can Be Incentivized To Divest
September 24, 2019 Email This Story Copyright 2010-19 EnergyChoiceMatters.com
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Arizona Corporation Commission Chairman Bob Burns has issued a memo with a series of questions for stakeholder comment and to be addressed in the ACC's consideration of adopting retail electric choice
As previously reported, at the Commission's September 11, 2019 Staff Open Meeting, the Utilities Division Staff
requested that the Commissioners submit to the docket any questions they have regarding retail choice
As exclusively first reported by EnergyChoiceMatters.com, at such meeting, Commissioners agreed to provide Staff with time to conduct research on retail electric choice in other states, with Staff to report to the Commission in January 2020. With Staff conducting such research, the Commission won't, at this time, direct Staff to develop a rules package for full retail electric competition for all customers.
Burns issued the following questions for stakeholder comment and consideration:
1. Is it absolutely necessary for the Arizona utilities to be part of or join a Regional
Transmission Operator ("RTO") or Independent System Operator ("ISO") if we adopt full
retail competition rules? Please explain in detail, why or why not.
2. On more than one occasion, the Commission's Legal Division has stated that the Phelps
Dodge Court of Appeals Opinion ("PD Opinion") prevents the Commission from
mandating that Arizona utilities join or be part of an RTO or ISO. Does the PD Opinion
prevent the Arizona utilities from voluntarily joining an RTO or ISO?
3. Does the PD Opinion prevent the Commission from providing incentives for the Arizona
utilities to voluntarily join an RTO or ISO?
4. Is it absolutely necessary for the Arizona utilities to divest themselves of all generation if
we adopt full retail competition? Please explain in detail, why or why not.
5. If divestiture of generation is a necessity, what is the estimated stranded cost that would
6. The Commission's Legal Division has stated that the PD Opinion does not allow the
Commission to mandate that Arizona utilities divest themselves of generation. Does the
PD Opinion prevent the Arizona utilities from voluntarily divesting themselves of
7. Does the PD Opinion prevent the Commission from providing incentives for the Arizona
utilities to voluntarily divest themselves of generation?
8. If divestiture of generation is not required for full retail competition, would there be any
stranded costs? If yes, please explain in detail why, how.
10. If Commissioner Kennedy's proposal is possible/feasible, would it work better over a
larger area such as all of Maricopa and Pima Counties (to incorporate portions of both
Arizona Public Service Company and Tucson Electric Power, and a Cooperative)?
11. Does the PD Opinion require the Commission to set rates based strictly on Fair Rate of
Return on Fair Value Rate Base ("FVRB") or does it allow the Commission the discretion
to consider a company's FVRB and then set an appropriate range of rates based on the
Commission's evaluation and consideration of that FVRB (i.e., in the exact same manner
the Commission sets rates for competitive telecommunications companies)?