RESA Offers Suggestion On Any Implementation Of Range Of Rates In Arizona Electric Choice

In comments to the Arizona Corporation Commission, the Retail Energy Supply Association made a suggestion on how any range of rates, a potential avenue to implement retail electric choice, should be implemented

The Phelps Dodge Court of Appeals opinion previously held that the ACC cannot rely on market forces alone to set electric rates, as such reliance would not meet the ACC's constitutional mandate to ensure rates were just and reasonable

However, the Phelps Dodge decision also holds that, in determining what is just and reasonable based on a Fair Rate of Return on Fair Value Rate Base, nothing prescribes a single rate rather than a range of rates

Consequently, the court said that, assuming the Commission establishes a range of rates which is just and reasonable, the Commission does not violate the constitution by permitting competitive market forces to set specific rates within that approved range.

RESA said that in establishing any range of rate RESA suggests the ACC conduct a single docket on retail electric competition and establish a range of rates within which all new market entrants must agree to participate.

"That is not only administratively efficient, but also avoids the ACC picking winners and losers in the retail markets," RESA said

"Perhaps the ACC could create a standard application format for potential ESP participants in the pilot program or restructured market. The approach would also help with individual pricing confidentiality," RESA said

Docket No. RE-00000A-18-0405