Arizona Chairman Sees Utilities Eventually Being Wires Only Companies

Speaking at the National Energy Marketers Association (NEM) Western Energy Policy Summit, Arizona Corporation Commission Chairman Bob Burns said that he envisions a transition in the industry under which monopoly utilities eventually become wires-only companies

"I believe that we will end up, at some point in time, with the monopoly utilities being basically wire companies," Burns said

"Now I don't know how long it will take; I assume I'll probably be long gone from office by the time it makes it to that point," Burns said

Burns identified two scenarios as producing such an outcome. The first, he said, is evolution, driven by customer demand and technological advancements, particularly distributed generation and energy storage, and declining prices

"The other way to get there is through a revolution," which is up to the Commissions in each state, Burns said

Also addressing Arizona issues, ACC Commissioner Boyd Dunn highlighted the need for any future action to conform with court precedent concerning the ACC's unique role in the state in determining just and reasonable rates.

Dunn stressed that under Arizona law and the state constitution, the ACC is the sole authority which is granted the power to determine just and reasonable rates.

A court case (Phelps Dodge) previously ruled that a prior ACC decision which allowed the market to determine just and reasonable rates did not conform to the ACC's constitutional charge to ensure such rates

While that case is not "absolute" in a lot of ways, Dunn stressed that, "We have to keep in mind that we have to be involved with that rate process, to a significant degree, to avoid having that problem."

A memo from an advisor to another ACC Commissioner recently addressed how electric choice could be harmonized with Phelps Dodge, see our prior story here for details