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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
utility; resource plan; commission review
Purpose
Requires the Arizona Corporation Commission (ACC) to require an electric public service corporation in Arizona to prepare and submit an outlined integrated resource plan to the ACC for review and approval at least once every three years.
Background
The Arizona Constitution deems all corporations, other than municipal, engaged in furnishing gas, oil or electricity for light, fuel, power, water for irrigation, fire protection or other public purposes, or in furnishing, for profit, hot or cold air or steam for heating or cooling purposes as public service corporations. Corporations, other than municipal, that engage in collecting, transporting, treating, purifying and disposing of sewage through a system for profit or that transmit messages or furnish public telegraph or telephone service, and all corporations other than municipal, operating as common carriers are also deemed public service corporations (Ariz. Const. art. 15 § 2).
The ACC
regulates investor-owned or privately-owned utilities that provide gas, water,
electricity or telephone service (ACC).
The ACC has the power to inspect and investigate the property, books, papers,
business, methods and affairs of any corporation whose stock is offered for
sale to the public and any public service corporation doing business within
Arizona (Ariz.
Const. art. 15 § 4). The ACC has the power and authority to enforce its
rules, regulations and orders by the imposition of such fines as the ACC may
deem just (Ariz.
Const. art. 15 § 19). The Arizona Constitution allows the Legislature to
enlarge the powers and extend the duties of the ACC and to prescribe rules and
regulations to govern proceedings by and before the ACC
(Ariz.
Const. art. 15 § 6).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires the ACC to require an electric public service corporation in Arizona to prepare and submit an integrated resource plan to the ACC for review and approval at least once every three years.
2. Requires the integrated resource plan to:
a) project energy demand for the next 15 years, including at least three scenarios that project low, medium and high load growth scenarios;
b) summarize and quantify all existing electric generation plants the public service corporation uses to meet existing and future demands, less any planned retirements, and identify each electric generation plant that is scheduled to retire or that the ACC has approved to retire within the next 15 years;
c) identify all electric generation plants that are not yet constructed or that are not currently owned, operated or used by the public service corporation and that could be constructed or could be purchased, operated or otherwise used or relied on to meet the difference between existing generating capacity and future energy demand in the next 15 years;
d) analyze the total estimated capital and operating expenditures for each outlined electric generation plant, combination of plants and combination of ownership structures over the useful life of each plant or combination of plants;
e) analyze the total reliability value, including effective load carrying capability, for each outlined electric generation plant and combination of plants to ensure reliable electric service is available to retail electric customers in each year for the next 15 years;
f) using the ratepayer impact measure test, determine the combination of outlined electric generation plants and ownership structures of the plants and that result in:
i. the lowest overall lifetime revenue requirement for the electric public service corporation over the useful life of the relevant plants;
ii. the safest and most reliable electric service for retail electric customers in each of the next 15 years; and
iii. the intent or design not being meant to satisfy any carbon or emissions reduction goal;
g) when evaluating total estimated capital and operating expenditures, provide a cost analysis that assumes any subsidies, grants or credits that are currently available to the public service corporation will continue to be available to the public service corporation over all or part of the next 15 years;
h) as a separate analysis and if feasible, provide the total estimated upstream and downstream carbon dioxide emissions and greenhouse gas equivalents of each outlined electric generation plant and combination of plants over the useful life of each plant and includes:
i. scope 1 emissions, scope 2 emissions and scope 3 emissions for each plant;
ii. the parts, minerals, metals, materials and components of each plant; and
iii. the manufacture, production, transportation, decommissioning and recycling of each plant and each plant's respective parts, minerals, metals, materials and components; and
i) include a description of all modeling assumptions that are used in each portfolio.
3. Requires the ACC, before the ACC approves or denies a public service corporation's integrated resource plan, to obtain and review an evaluation that is conducted by an independent third party and that:
a) verifies the public service corporation's information;
b) presents alternative information, estimates, analyses, evaluations or assumptions related to:
i. the public service corporation's low, medium or high load growth scenarios;
ii. the public service corporation's estimate of total capital and operating expenditures for each plant or a combination of plants or ownership structures for those plants over the useful life of each plant;
iii. the public service corporation's measure of reliability, such as effective load carrying capacity for a plant or combination of plants; and
iv. whether the public service corporation could safely and reliably meet projected demand at a lower cost with less capacity if more reliable and dispatchable sources of power were included; and
c) using the ratepayer impact measure test, makes a recommendation regarding the combination of plants and ownership structures for those plants that result in the lowest overall lifetime revenue requirement and reliability requirements.
4. Requires the cost analysis to take into consideration the statutory deadlines and a cost analysis that assumes subsidies, grants or credits will not be available to the public service corporation over the next 15 years.
5. Stipulates that, if the ACC approves a public service corporation's integrated resource plan, the ACC's decision is not binding on future rate cases.
6. Requires an integrated resource plan that complies with outlined requirements and that has been approved by the ACC to serve as evidence of all relevant conditions known, or that in the exercise of reasonable judgment could have been known, by an electric public service corporation during the three year period between integrated resource plans, unless the public service corporation provides substantial evidence of new or alternative conditions that the public service corporation became aware of after the ACC approved the integrated resource plan.
7. Prohibits a public service corporation or a parent company, holding company or affiliate of the public service corporation, to ensure the convenience, comfort and safety of and to preserve the health of the public service corporation's customers, from adopting, implementing, administering or enforcing any policy, program or system of employee or independent contractor compensation that measures an employee's or independent contractor's performance or amount of compensation in whole or in part based on achieving a goal, objective, unit of measure or metric that conflicts with the public service corporation's obligation or ability to serve the public, including the ability to provide safe and reliable service at an affordable rate.
8. Defines ratepayer impact measure test as a test that measures the change in customer bills or rates due to changes in the utility's capital and operating expenses caused by the utility's investment or procurement decisions in a particular electric generation plant, combination of plants or combination of ownership structures associated with the plants.
9. Defines commission, electric generation plant, electric service and retail electric customer.
10. Becomes effective on the general effective date.
House Action
NREW 2/18/25 DP 6-4-0-0
3rd Read 2/26/25 31-28-1
Prepared by Senate Research
March 14, 2025
SB/slp