Arizona Affirms Working Group Process, Considers Retaining Consultant For Retail Electric Choice Review

During an Arizona Corporation Commission Staff open meeting yesterday, Commissioners affirmed using a working group and workshop process as the next step for the Commission's retail electric choice investigation, as Commissioners discussed whether to retain a consultant to assist the Commission in the review.

As previously proposed at a workshop last week, Commissioners will file their questions concerning retail choice to assist Staff on issues to be answered.

See more details on last week's workshop here

Utilities Division Staff is gathering information from other states with retail electric choice to develop an extensive report for Commissioners, and reiterated Staff's need for time to conduct due diligence to develop a recommendation that can withstand legal and technical challenges. Staff said that it will not delay the process. Staff will start very soon looking at establishing the working groups, and will see if Staff has the funds to retain a consultant, for either the entire process, or for discrete issues in the investigation (such as the RTO issue).

Summarizing concerns raised by Commissioners at last week's workshop, Chairman Bob Burns highlighted issues facing the Commission as: whether an RTO is needed; customer protection; the impact on renewables; and a rate analysis of impacts from competition

Commissioner Boyd Dunn said that he can't think of a more significant policy issue that the ACC would ever undertake than restructuring, as Dunn said that, before making a decision, he needs to understand what the effects of any decision will be -- on rates, on stranded assets, on the ACC's jurisdiction. Once those questions are answered, then the Commission can determine the best model for restructuring, Dunn said

Dunn reiterated that one of his priorities is the jurisdictional issue, and the risk of losing jurisdiction to California (due to potential RTO membership) and FERC. "How do we do this while keeping control in the state of Arizona," Dunn asked. "I don't want to give up local control," Dunn added

Burns did caution against investigating too long so as to not risk having the issue, "dying on the vine," and said that the ACC should have a plan to keep things moving

Noting the long-lasting impact that the Commission's decision will have, Commissioner Lea Márquez Peterson said that the issues are very complex and that the Commission needs to be thoughtful, though she added that she does not want the process to take, "years and years."

Discussing an RTO, Commissioner Sandra Kennedy said that in the Phelps Dodge case, the state's Court of Appeals determined that the ACC does not have statutory or constitutional authority to order creation of an independent scheduling administrator.