Phoenix, Ariz. —   On Friday, June 13, 2025, the Maricopa County Superior Court dismissed a lawsuit brought by the Residential Utility Consumer Office against the Arizona Corporation Commission seeking to invalidate the Commission’s Formula Rate Policy.  The court upheld the policy and dismissed the lawsuit. General Counsel for the Commission, Thomas Van Flein, stated that “the judge was exceptionally thorough and granted the parties an unprecedented three hours for oral argument after extensive briefing. In addition, the court was prompt and efficient.  The decision is well-reasoned if not impeccable.”

 In December 2024, the Commission approved a Policy Statement that provides another method for a utility to propose a rate adjustment.  The Formula Rate Policy is not a requirement or a change to existing rules.  Furthermore, if a utility decided to use the Formula Rate mechanism, the underlying rates will still be based on a historical test year, the constitutional requirements on value and any adjustments to rates will still have to be decided by the Commission.

 “Today’s ruling is a significant win for the Commission and Arizona,” said ACC Chair Kevin Thompson. “The court unequivocally affirmed our Constitutional authority to set policy and rules in our ratemaking capacity. With today’s decision, we are able to move forward with reducing regulatory lag, with this tried and proven framework, while promoting greater reliability in our grid and protecting customers from unexpected and significant rate increases.”

 "I’m pleased with the Superior Court’s decision to uphold the Commission’s Formula Rate Policy,” stated ACC Vice Chair Nick Myers.  “I want to extend my sincere thanks to the judge for the thoughtful and thorough consideration given to this case. The court’s ruling affirms the integrity of our process and allows us to move forward confidently. I look forward to evaluating future formula rate proposals from utilities in a way that ultimately benefits Arizona’s ratepayers by promoting transparency, regulatory efficiency, and accountability."

The Ruling and all documents related to this case can be found at https://www.superiorcourt.maricopa.gov/docket/civilcourtcases Docket No. CV 2025-011288.