State SealARIZONA HOUSE OF REPRESENTATIVES

 

HB 2005: public service corporations; penalties

PRIME SPONSOR: Representative Leach, LD 11

BILL STATUS: Senate Engrossed

                Senate 3rd Read: 16-12-1-1

Legend: ACC – Arizona Corporation Commission Amendments – BOLD and Stricken (Committee)

Abstract

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteRelating to penalties for public service corporations and electric generating resources.

Provisions

1.       Declares the exclusive remedy or penalty for an alleged or actual violation of any constitutional provision, or ACC rule based on a constitutional provision, that specifies the type of electric generating resources that must be acquired or used by a public service corporation as a civil penalty, limited to not more than $5,000.

a.       Includes any alleged or actual violation by or procured by a public service corporation's officer, agent or employee. (Sec. 1)

2.       Makes technical changes. (Sec. 1)

Current Law

A public service corporation includes corporations engaged in furnishing gas, oil or electricity, fuel or power (Article XV § 2, AZ Constitution).

The ACC, established by Article XV, AZ Constitution, has the power to prescribe just and reasonable classification, rates and charges collected by public service corporations and make reasonable rules, regulations and orders that govern the transaction of business in Arizona (Article XV, § 3, AZ Constitution).

In 2006, the ACC approved REST (R14-2-1801), rules that require regulated electric utilities to generate 15% of their energy from renewable resources, including solar, wind, biomass, biogas, geothermal and other similar technologies, by 2025.

Any public service corporation that violates or fails to comply with the AZ Constitution, statute or any ACC rule, order or requirement is subject to a penalty of at least $100 and not more than $5,000, if the penalty is not otherwise provided. Each violation is a separate offense, but violations continuing from day to day are one offense (A.R.S. § 40-425, Article XV, § 16, AZ Constitution). Additionally, every public service corporation officer, agent or employee who fails to comply with, or procures any violation of the Arizona Constitution, or of any ACC order, rule or requirement is guilty of a class 1 misdemeanor unless another classification is specifically prescribed (A.R.S. § 40-426).

Additional Information

In February 2018, an initiative to amend the AZ Constitution was filed that would require affected utilities to provide at least 50% of their annual retail sales of electricity from renewable energy sources by 2030. Renewable sources include solar, wind, small-scale hydropower, and other sources that are replaced by a natural, ongoing process, excluding nuclear or fossil fuel.

In 2011, the Arizona Court of Appeals affirmed that the ACC acted within its plenary ratemaking authority under the AZ Constitution in enacting the REST rules (Miller v Arizona Corporation Commission).

 

 

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Fifty-third Legislature                  HB 2005

Second Regular Session                               Version 4: Senate Engrossed

 

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