Arizona utility regulators could vote to change rulemaking
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Arizona ratepayers could end up paying more for utilities if state regulators decide to change the ratemaking process.
The Arizona Corporation Commission is set to vote on a proposed policy statement today, which would allow Arizona utilities to move from a historical "test year" model to a formula rate plan. A formula rate plan is used to adjust a utility's base rates outside a general rate case, many times because of increases in the average cost of utility service.
Diane Brown, executive director, Arizona Public Interest Research Group Education Fund, called the proposed change "seismic," and is concerned ratepayers could experience "higher utility bill aftershocks on an annual basis," as a result.
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"There appears to be a full-court press to approve a policy statement that essentially upends a long-standing ratemaking process without providing the necessary time and attention to details," Brown contended.
Supporters of formula rate plans said they can help stabilize a utility's rate of return without a full rate case review. Brown argued ratepayers in states using formula rate plans have experienced "higher costs alongside decreased transparency and less opportunities for public engagement." Groups are calling on the commission to grant more time for the decision, to allow experts and consumers a chance to weigh in.
Consumer groups believe the proposed policy statement, which was made public late last month, has been rushed for a vote. Brown argued there is no need to change a system that has worked well, for one lacking specificity, which could usher in unintended effects.
"The commission should slow down the significant shift in ratemaking by addressing questions and requests that stakeholders have presented to commissioners and staff," Brown asserted.
The commission countered stakeholders have had enough time to voice their opinions following workshops held in March and October of this year on the issue, all in an effort to provide Arizonans with reliable service and predictability in utility costs.
