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Home > Industry Data > Arizona Detail Page

Arizona Detail Page

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Alternative Suppliers
A complete listing of approved alternative suppliers in states that have undergone deregulation.
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Contains a listing of the electric companies under state PUC jurisdiction.
Regulatory Summary
A quick summary of the regulatory activity in each state.

Regulatory Summary

06/07: The Arizona Cooperation Commission held an open meeting and set the APS rate increase to approximately 5.7 percent on summer bills and about 3.5 percent on winter bills. Because APS has a variety of rate plans and customer options, individuals’ personal rate increases will vary. Source: Arizona Cooperation Commission

05/06: The Arizona Corporation Commission approved a temporary interim rate increase designed to partially refund money Arizona Public Service (APS) has already paid for natural gas in 2005 and what APS projects it will incur in additional charges for 2006. The increase is necessary to pay down debts that continue growing due to the unprecedented and sustained high natural gas and purchased power prices. APS does not profit from this increase as the monies collected will be used solely to pay fuel costs. The temporary increase represents approximately 7.6 percent on the typical residential customer’s bill. The surcharge will end once APS collects approximately $140 million in fuel and purchased power prices. Source: Arizona Cooperation Commission

03/05: In their first quarter 2005 report, the Electric Competition Advisory Group reported no activity for the fourth quarter of 2004 and the first quarter of 2005. The same group reported no activity since the first quarter of 2004. This inactivity strongly suggests that electricity restructuring in Arizona has been indefinitely put on hold.

3/04: The Arizona Corporation Commission (ACC) and other interested parties are continuing to work on developing a competitive bid process for utilities to use when procuring power for Standard Offer Service customers.

9/02:The Arizona Corporation Commission (ACC) issued its final order on Track A issues. The order instructed the Arizona Public Service Company (APS) and the Tucson Electric Power Company (TEP) "to cancel any plans to divest interests in any generating assets." The order also stated that the previous decisions dealing with the amount of power purchased through a competitive bid process are put on hold. The Commission has designated this issue part of Track B, which will deal with the entire "competitive solicitation process." The ACC specifically stated that if APS pursues acquiring Pinnacle West Energy Corporation's generating assets, then these generating assets cannot "be counted as APS assets in determining the amount, timing and manner of the competitive solicitation process." In addition, the order establishes the Electric Competition Advisory Group, and the ACC staff will "prepare and file reports detailing the activities of the Advisory Group." This order is effective immediately.

8/02: Due of the lack of competition in the state, the Arizona Corporation Commission (ACC) nullified a section of the restructuring law that requires divestiture of generation assets. Arizona's restructuring law does not allow former monopoly utilities to own power plants so the utilities must "move their power plants into a separate subsidiary or sell them to another unrelated company." According to an ACC press release, the Commission stated that the Arizona Public Service Company (APS) and Tucson Electric Power (TEP) "have market power" in their service territories, and "full divestiture would limit the jurisdictional ability of the Commission to protect Arizonans from market power abuses." Also, APS is required to "file a separate application to transfer generating assets from Pinnacle West Energy Corporation to APS." The ACC will discuss this requirement in an upcoming docket.

7/02: An ACC Administrative Law Judge issued a recommendation on electric restructuring issues. In the order, the ACC staff concluded that "the wholesale market is not currently workably competitive; therefore, reliance on that market will not result in just and reasonable rates." The recommended order delays divestiture of generation assets until July 1, 2004, and "removes the requirement that 100 percent of power purchased for Standard Offer Service shall be acquired from the competitive market, with at least 50 percent through a competitive bid process." The recommended order also forms the Electric Competition Advisory Group, and directs the ACC staff to submit periodic reports on the group's activities. Arizona Public Service Company and Tucson Electric Power Company would be required to obtain excess power from "the competitive procurement process as developed in the Track B process." Track B, Competitive Solicitation issues, will be dealt with in another order, and the commission must vote on this order, which will take effect immediately if approved.

1/00: Enron and the Center for Law in the Public Interest filed lawsuits challenging the APS restructuring settlement. The Center for Law in the Public Interest claims the settlement sets electric rates without examining the financial condition of the company to see if they were fair. Enron agrues that the shopping credit has been set too low and will stifle competition and unfair marketing practices may arise since APS is not required to sell its generation assets but is transferring them to a utility affiliate.

10/99: The ACC issued a recommendation to approve Tucson Electric Power's restructuring settlement. The settlement will allow 100 percent recovery of $450 million in stranded costs collected by a Competition Transition Charge (CTC) and recovery of the balance of the $638 million in stranded costs through a "floating" CTC. Twenty percent of the load in TEP's territory will be open to competition by January 2000, and all by Janaury 2001. Rates will be reduced by 1 percent and frozen through 2008. TEP's generation assets are to be transferred to an affiliate company by the end of 2002.

9/99: The ACC approved APS's restructuring settlement agreement. APS will open 20 percent of the load in its territory to competition on October 1, 1999. Residential rates will be reduced 7.5 percent over a 4-year period, and large customer rates 5 percent over a 3-year period. APS may collect $350 million in stranded costs over 5 years. Small commercial customers may aggregate loads. APS is to be the provider of last resort, and must provide adequate transmission import and distribution capability.

4/99: The ACC approved a new plan with 4 options for stranded cost recovery and will begin retail competition with 20 percent of consumers later this year and all consumers by January 1, 2001. Utilities must file their proposals for stranded cost recovery by June. The solar portfolio standard was eliminated as too costly. A hearing process will consider whether to adopt a renewable resource requirement that would include all renewables.

1/99: The ACC delayed competition due to a State Supreme Court decision against the restructuring plans of Arizona Public Service Company and Tucson Electric Power. At issue are the settlements for stranded costs. Also, with the election of a new commissioner on the ACC, the solar portfolio requirement is likely to be dismantled.

8/98: The ACC approved final rules for restructuring the investor-owned utilities in the State (Arizona Public Service and Tucson Electric Power). Retail competition is to phase-in over 2 years beginning January 1, 1999 with large customers. Utilities are to file restructuring plans by September 1998. Plans should include divestiture of all generation assets for utilities to recover 100 percent of stranded costs and rate cuts of 5 percent for residential consumers. The rules retain the 1996 draft order's solar portfolio standard.

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