Phoenix, Ariz. — Four Arizona Corporation Commissioners recently wrote to Governor Hobbs requesting intervention on behalf of customers of the federally-run San Carlos Irrigation Project (SCIP). The customers were recently informed of massive price increases to their monthly utility bills as a result of the federal government's inability to purchase power on the open market at a reasonable cost. SCIP is a federally-run utility and is not subject to regulation by the Commission or the State of Arizona. Roughly 10,000 customers in Central Arizona are members of SCIP, including approximately 80% located on non-tribal lands.
In the October 11th letter led by Commissioner Thompson and signed by Commissioners Márquez Peterson, Myers, and Chairman O’Connor, the group noted previous attempts of the federal divestiture of SCIP. In 1991, former Congressman Jim Kolbe introduced H.R. 1476 (San Carlos Indian Irrigation Project Divestiture Act of 1991). The bill experienced bipartisan support from Arizona’s delegation and was signed into law in December 1991. Unfortunately, the plan to complete divestiture and release SCIP customers from the federal authority never fully manifested. The Commissioners urged the Governor to reignite collaborative discussions with federal partners to explore a solution for customers that is responsive and accountable to Arizonans, including possible divestiture.
Additionally, the Commissioners urged the Governor to explore interim financial protections the State could provide to SCIP customers to increase the safety net and protect vulnerable ratepayers most impacted by the recent dramatic rate shock. The Commissioners highlighted possibly accessing the roughly $13 million recently provided by the federal government to Arizona in “grid resilience formula” grants. The Commissioners also noted federal funds could be requested to provide necessary and costly maintenance and improvements to the SCIP grid.
Finally, the Commissioners noted that while the Governor heard from Arizona utilities in July that customers were not at risk for losing electricity service due to financial hardships or nonpayment during the hot summer months, similar federal protections do not exist for SCIP customers. The Commission has adopted protections for Arizona customers of utilities regulated by the Commission, ensuring vulnerable customers’ power will not be shut off during the most dangerous parts of the summer. The Commissioners expressed concerns that dangers will continue to emerge for SCIP customers once high temperatures return, short of any assurances from the federal government that vulnerable customers will be protected.
Please see a copy of the letter, attached.