The Arizona Corporation Commission is working to clarify its legal authority to allow electric customers to choose their energy providers.
The commission voted Wednesday to draft a letter to seek a legal opinion from Attorney General Mark Brnovich on its authority to open the state’s retail power markets to competitive providers, especially in light of a 2020 Arizona Supreme Court decision that supporters say requires a competitive electric market in the state.
The commission also wants the attorney general to consider a 1998 state law requiring competition, the state constitution, and a 2004 appellate court decision that essentially nullified the state’s competition rules.
“It might be time to get clarity regarding these questions before we proceed with any use of staff time or resources, and this is a way we can receive that clarity,” Commission Chairwoman Lea Márquez Peterson said at an open staff meeting.
Commissioner Justin Olson was the sole vote against drafting the letter.
Olson said he was concerned that seeking the attorney general’s opinion would delay proceedings to approve applications filed by would-be energy competitors, including a recent filing by Green Mountain Energy Co. to serve homes and businesses in the Arizona Public Service and Tucson Electric Power Co. territories with renewable energy.
Olson said the commission is clearly required to act on the applications, under state law and the Supreme Court ruling in the unrelated case of Johnson Utilities, which he said gave the Legislature primary authority over utility policy beyond rates. Green Mountain has made the same argument in its filing.
“The Johnson Utilities ruling makes it clear that statute has authority over the commission, because this is a policy question; it’s not rate-making,” Olson said, adding that an attorney general’s opinion is unnecessary.
But the corporation commission’s top lawyer said the regulators need not wait for the attorney general to begin studying the legal questions in preparation for possible proceedings on competitors’ applications.
Corporation Commission General Counsel Robin Mitchell said the commission’s legal and utilities staff can begin studying issues such as whether the commission can approve competitors under the old rules or if it must amend or pass new rules, to prepare recommendations to the panel.
