SB1319 - 502R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 40, chapter 2, article 1, Arizona Revised Statutes, is amended by adding section 40-203.01, to read:

START_STATUTE40-203.01. Commission jurisdiction; municipal water utilities; rates; nonresident consumers

The commission shall regulate the rates to be charged by a municipal corporation for the service and delivery of water to consumers outside of the municipality's corporate limits.END_STATUTE

Sec. 2. Section 40-246, Arizona Revised Statutes, is amended to read:

START_STATUTE40-246. Complaint alleging violation by public service corporation of law or rule or order of commission; exception; joinder of complaints; notice of hearing

A. Complaint may be made by the commission of its own motion, or by any person or association of persons by petition or complaint in writing, setting forth any act or thing done or omitted to be done by any public service corporation in violation, or claimed to be in violation, of any provision of law or any order or rule of the commission, but no complaint shall be entertained by the commission, except upon its own motion, as to the reasonableness of any rates or charges of any gas, electrical, water or telephone corporation, unless it is signed by the mayor or a majority of the legislative body of the city or town within which the alleged violation occurred, or by not less than twenty‑five consumers or purchasers, or prospective consumers or purchasers, of the service.

B. All matters upon which complaint may be founded may be joined in one hearing, and a complaint is not defective for misjoinder or nonjoinder of parties or causes, either before the commission, or on review by the courts. The commission need not dismiss a complaint because of the absence of direct damage to the complainant.

C. Upon filing the complaint, the commission shall set the time when and a place where a hearing will be had upon it and shall serve notice thereof, with a copy of the complaint, upon the party complained of not less than ten days before the time set for the hearing, unless the commission finds that public necessity requires that the hearing be held at an earlier date. Service may be made as a summons in a civil action is required to be served, or may be made in any manner giving actual notice, and no irregularity in the service is an excuse or defense.

D. This section applies to complaints filed regarding the rates charged by a municipal corporation for the service and delivery of water to consumers outside of the municipality's corporate limits. END_STATUTE

Sec. 3. Section 40-256, Arizona Revised Statutes, is amended to read:

START_STATUTE40-256. Time periods for rate decisions; calculation; simplified filing rules; interim rates and charges; definitions

A. From the date on which a utility's rate filing is determined to be sufficient in accordance with this section, the commission shall issue a decision establishing rates and charges for service within the following time periods:

1. For class 1 utilities, within two hundred seventy days.

2. For class 2 utilities, within one hundred eighty days.

B. For the purposes of calculating the time periods prescribed in subsection A, a rate filing shall be deemed sufficient if it substantially complies with the commission's rules governing the filing requirements for applications for increased rates or charges for utility service. The utilities division shall review each rate filing to ascertain whether it substantially complies with the applicable rules and shall submit its findings to the commission not more than thirty days after the date of the rate filing. If it is determined that a rate filing does not substantially comply with the applicable rules, the utilities division shall notify the utility, in writing, of the basis for its determination to allow the utility to cure its filing. If this written notice is not provided within thirty days after the date of the utility's rate filing, the rate filing is presumed to be in substantial compliance with the applicable rules and the applicable time period established in subsection A begins. If any deficiencies in the rate filing are identified and written notice is given to the utility, the applicable time period begins on the date the rate filing is amended to cure the deficiencies.

C. On the motion of any party to the contested case proceedings relating to the rate filing or on its own motion, the commission may determine that an extraordinary event that would substantially alter the relief requested in the utility's rate filing has occurred. If such a determination is made, the time period prescribed in subsection A begins again from the date of the determination.

D. To expedite the issuance of final decisions and to minimize the fees and expenses incurred by utilities, the commission shall promptly adopt rules providing for simplified filing requirements and procedures for rate filings by utilities whose annual operating revenues do not exceed two hundred fifty thousand dollars.

E. If a decision in the rate filing has not been issued within the required time period, the commission shall provide that the utility may implement reasonable modifications to rates and charges based on those proposed in the rate filing, on an interim basis, and subject to refund, pending the issuance of a final decision. Notice of the implementation shall be given by keeping open for public inspection new schedules stating the modifications to be made in the schedules then in force and by mailing a written notice to all customers of the utility advising them of the modifications at least thirty days before the effective date of the modifications. Any party to the contested case proceedings relating to the rate filing, including the utilities division, or the commission on its own motion may request that a hearing be scheduled for the limited purpose of determining whether the utility should be required to file a bond approved by the commission in such amount and with sufficient security to ensure prompt payment of any refunds to the persons entitled to them, including an interest rate of not more than the maximum interest otherwise allowed by law, if the modified rates or charges placed into effect are finally determined by the commission to be excessive. The utility may substitute for the bond other arrangements satisfactory to the commission for the protection of the parties involved.

F. For the purposes of this section:

1. "Annual operating revenues" means gross utility operating revenues derived from a utility's jurisdictional operations, including the requested rate relief.

2. "Class 1 utility" means a utility with annual operating revenues of one million dollars or more.

3. "Class 2 utility" means a utility with annual operating revenues of less than one million dollars.

4. "Combination utility" means a utility that provides more than one of the commodities or services in paragraph 7. For combination utilities, departmental operating revenues shall be used for classification purposes.

5. "Decision" means a final order, decision or determination of the commission that disposes of all issues involved in all parts or phases of the proceedings before the agency concerning a rate filing.

6. "Rate filing" means an application filed by a utility for the permanent modification to any rate or charge for service requiring the commission to determine the fair value of the utility's jurisdictional property used for the provision of utility service and the rate of return.

7. "Utility":

(a) Means a public service corporation that is engaged in supplying electric, gas, telephone, water or sewer utility service in this state and that is subject to the jurisdiction of the commission.

(b) Includes a municipal corporation that delivers water to consumers outside of the municipality's corporate limits. END_STATUTE