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Phoenix, Ariz. – Today, the Arizona Corporation Commission voted on a consequential rate case – UNS Gas, our state’s first formula rate case.  The Commission is responsible for ensuring that our regulated utilities provide just and reasonable rates and gather information during each rate case to make their determination.

Upon review of the Recommended Opinion and Order by the Administrative Law Judge, it was evident to me that there was insufficient information to convince me of the customer benefits of the formula rate design or an ARAM (annual rate adjustment mechanism) that the company proposed.

In 2024, I voted against the formation of the formula rate mechanism as a policy statement at the Commission. I did not support the process in which the Policy Statement regarding formula rates were implemented, as I felt that the process was not transparent nor did it adequately allow stakeholders and the public to weigh in.  My actions today were specific to this particular rate matter.

I presented an amendment to the Recommended Opinion and Order for UNS Gas to disallow the formula rate or ARAM structure, as I did not believe it was in the best interest of UNS ratepayers. Unfortunately, my amendment did not receive support from a majority of my fellow Commissioners. I remain concerned that the ARAM, as approved in the Decision, will not provide the gradualism that the company projects and may lead to upward pressure on customer bills rather than the alleged benefits.

Additionally, the Administrative Law Judge proposed a pilot program for the ARAM, which was a new concept for our state utilities. This was a compromise to allow the company to move forward with a formula rate while allowing the Commission to learn the actual impacts on customers during the period of time. I supported this effort, and the company did not oppose the pilot program, but unfortunately, it was not supported by the majority of the Commission.

Ultimately, I could not vote in support of the UNS rate case as it developed. I take this vote very seriously and have carefully considered its implications. However, I remain unconvinced that the ARAM or formula rates are a benefit to ratepayers in this case, nor that they will lower the overall cost to UNS Gas customers in the long run.