How The Corporation Commission Approves Utility Rates

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by Rebecca Wilder, communications director, Arizona Corporation Commission

There has been much discussion in recent articles on the rate request from Payson Water now pending before the commission.

While the commission can’t comment publicly on the case while it is gathering information from the parties and the community — commissioners sit as judges in the case and must remain neutral until the final vote — it may be helpful to discuss the commission’s process in handling rate cases so that you know the status of this request and what to expect.

When a utility company determines it needs additional funding to continue to provide quality, reliable service and to maintain its infrastructure, the company files an application for new rates with the commission; Payson Water filed its application on April 22, 2013.

Commission staff review this request to ensure that it contains all the required facts and figures to support its case; if it does, the application is considered sufficient. If it is insufficient, the commission requires the company to provide the missing information. The commission employs engineers, accountants, attorneys and other experts who will analyze the application to make a determination of what it finds the company’s needs to be and will issue a staff report. This report often differs with the request made by the company, as you have recently read about in the case of Payson Water.

The parties in the case, including the company, commission staff, and other interveners will file testimony and evidence and the commission will hold hearings, presided over by an administrative law judge (ALJ), to fully hear and weigh all the evidence, just as in any court case.

As occurred last Monday, Jan. 13, the commission also holds a public comment session. Written comments on any case are welcomed, at any time, to be sent to the commission by e-mail or postal mail, and will be inserted into the docket for review by the ALJ and commissioners. However, the public comment session allows customers to appear before the ALJ and give comment on their own experience with the company’s service and rates. These comments are also included in the record for further review.

As mentioned in a previous Payson Roundup article, the hearing will resume on Feb. 4, 2014 and is scheduled through Feb. 7, to allow time for the parties to give their testimony and answer questions that the ALJ will present to them.

Following the hearing, the ALJ will prepare a Recommended Opinion and Order (ROO). This often takes a number of weeks as the ALJ studies all the testimony and evidence in the case. The ROO can often recommend rates that are different from what the company requested, and even what commission staff recommended. Once the ROO is issued, the matter will be scheduled to be heard before the commissioners at an open meeting in its Phoenix offices.

During this open meeting, the commissioners will take additional public comment, statements from the parties, and will ask questions to fully vet the matter. The commissioners can also introduce amendments to the ROO to change any part of it that they deem necessary. It is at this meeting that they will ultimately vote to approve the order, deny the order, or approve it with amendments. Only after this vote can the company implement new rates.

The commission wants your voice to be heard and comments from the public are welcomed at any time. They can be sent to mailmaster@azcc.gov or submitted through this link: http://www.azcc.gov/Divisions/Utilities/forms/CommentForm.htm

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