PHOENIX – The Arizona Corporation Commission held its monthly Open Meeting on May 17 and 18, 2022, to discuss and vote on various securities and utilities items. Highlights from the meeting are below:
ACC Establishes Community Solar Working Group and Approves Arizona Public Service Company 2022 Renewable Energy Standard Implementation Plan
Commissioners voted to approve an application from Arizona Public Service Company (APS) for approval of its 2022 Renewable Energy Standard Implementation Plan (REST Plan). The approved 2022 REST Plan has a budget of $100.5 million dollars, including $90.6 million that will be collected through the Renewable Energy Adjustor Charge (REAC-1). APS currently has six REAC-1 categories: residential, extra small commercial, small commercial, medium commercial, large commercial, and industrial. REAC-1 adjustor surcharges are applied based on kWh usage, with a monthly cap for each category.
Chairwoman Lea Márquez Peterson offered two amendments which were adopted. The first lowered the monthly cap limit for all six REAC-1 categories. The new monthly cap limits for each category are as follows: residential is capped at $3.00; extra small and small commercial is capped at $50.00; medium commercial is capped at $200.00; large commercial is capped at $500.00; and industrial is capped at $2500.00. Her second amendment removed language from the proposed order because it replicated a Residential Battery Pilot program approved in APS’s existing 2021 Demand-Side Management Implementation Plan and the DDSR Aggregation Tariff that has been underway since 2020.
Commissioner Sandra D. Kennedy offered an amendment which was adopted that reduces the Solar Communities bill credit by one cent per month, from $50.00 to $49.99. This change simplifies tax paperwork for both APS and customers participating in the program.
Commissioner Anna Tovar offered an amendment which was adopted that creates a working group to examine the development and implementation of community solar and community energy storage projects in Arizona. The working group will meet at least every other week beginning in June 2022 and will present their findings to the Commission. This will help guide the Commission’s future action on potentially implementing a community solar and community battery storage projects. These projects allow customers who might not otherwise have direct access to solar energy or battery storage, such as residential and commercial tenants, the opportunity to subscribe to a portion of a shared off-site solar array and receive the direct benefits on monthly bills, similar to if they had rooftop solar on their home or small business.
The APS REST Plan consists of various programs accessible by residential and commercial customers. The Green Choice Program allows those who choose to contribute to green energy programs the ability to meet their individual environmental goals, while reducing the total RES adjustor load on other ratepayers. WattPlan is an online educational tool which allows residential customers the ability to receive an objective estimate of the costs and benefits associated with installing rooftop solar systems with or without battery storage.
All documents related to this agenda item can be found in the Corporation Commission’s online docket at https://edocket.azcc.gov and entering docket number E-01345A-21-0240.
EPCOR Water Arizona, Inc. CAGRD Adjustor Fee Decreased
Commissioners voted to amend a previous decision to reduce potential rate shock to EPCOR Water Arizona, Inc. (EPCOR) customers in the former Johnson Utilities service territory. EPCOR filed an application on May 6, 2022, seeking to change the adjustor fee methodology used by Johnson Utilities to revert to collecting the CAGRD fees in arrears rather than in advance. Under the new CAGRD methodology customers within the Phoenix Active Management Area will have their fee reduced from $5.36 per 1,000 gallons to $2.83 per 1,000 gallons, a decrease of $2.53. Customers within the Pinal Active Management Area will have their fee reduced from $1.29 per 1,000 gallons to a credit of $0.03 per 1,000 gallons, a decrease of $1.32.
All documents related to this agenda item can be found in the Corporation Commission’s online docket at https://edocket.azcc.gov and entering docket number WS-02987-08-0180.
Arizona Public Service Company Lost Fixed Cost Recovery Adjustor Approved
Commissioners voted to approve an application from Arizona Public Service Company (APS) for approval of its 2022 Lost Fixed Cost Recovery (LFCR) mechanism adjustment. The LFCR is a rate design mechanism intended to assist in the recovery of a revenue requirement due to lost fixed costs due to the Energy Efficiency savings and Distributed Generation requirements. For customers on a three-part demand rate, the LFCR is calculated on a per Kilowatt rate each month. For customers on a two-part energy rate the LFCR is calculated on a per Kilowatt-hour rate each month. Costs recovered through the LFCR include the portion of distribution costs included in base rates, less what is already recovered by the Basic Service Charge, and 50-percent of demand revenues associated with distribution.
The new LFCR rate will be changed from $0.372 per kW to $0.775 per kW per month for customers on a demand rate and from $0.00125 per kWh to $0.00263 per kWh per month for customers on an energy-only rate. This increase translates to an approximate monthly bill increase of $2.46 for customers on a demand rate and an increase of approximately $1.45 per month for customers on an energy-only rate. The overall impact on retail revenues from the new LFCR rate is an estimated recovery of $59.1 million.
Commissioner Anna Tovar offered an amendment which was adopted that requires APS to work with interested stakeholders to develop one or more proposals for Commission consideration in its next rate case to eliminate the LFCR entirely, and to address revenue deficiencies from customer programs that enable distributed energy resource investment.
All documents related to this agenda item can be found in the Corporation Commission’s online docket at https://edocket.azcc.gov and entering docket number E-01345A-22-0042.
Commission Penalizes Tucson Investment Adviser Rep for Deceiving Clients, Suspends IAR License
The Corporation Commission ordered respondents Nathaniel S. Barnhart of Green Valley and Cornerstone Wealth Management, LLC to pay a $10,000 administrative penalty for committing investment advisory fraud. The Corporation Commission also suspended Mr. Barnhart's investment adviser representative license for five months.
The Corporation Commission found Mr. Barnhart was recruited by William Andrew (Andy) Smith and Christopher (Chris) Cox to form Cornerstone Wealth Management, LLC (Cornerstone) in order to take over servicing the investment advisory clients of their firm, Smith & Cox, LLC. During this time, Andy Smith, Chris Cox and Smith & Cox, LLC were respondents in a pending 2018 Commission enforcement action alleging securities fraud and investment advisory fraud.
The Corporation Commission found Mr. Barnhart and Cornerstone told clients misleading statements about Smith & Cox, LLC “rebranding” to Cornerstone Wealth Management, LLC while failing to disclose the Commission’s 2018 enforcement action against Smith & Cox, LLC and other negative facts.
In settling this matter, Mr. Barnhart and Cornerstone admit to the Commission’s findings, including that they committed investment advisory fraud, for purposes of this proceeding and agree to the entry of the consent order.
This consent order does not require Mr. Barnhart or Cornerstone to pay restitution because Barnhart’s former advisory firm, AE Wealth Management, LLC, has paid all restitution owed to the investors as required by Commission’s Decision #78219 dated September 1, 2021.
All documents relating to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket number S-21104A-20-0103.