Phoenix, Ariz. —The Arizona Corporation Commissioners voted on 10 matters, including electric and water utilities, line siting, telecommunications, and securities items. Highlights from the meeting include:
CEC for 1886 Solar Energy Station Approved
The Commission granted a 5-mile, 500-kV transmission line certificate of environmental compatibility connecting a planned Solar Energy Station to APS's future switchyard in Coconino County, Arizona. The Project Corridor is strategically located near the Solar Energy Station and extends northeast. Regulatory conditions ensure minimal environmental impact and serve as official findings on balancing ecological concerns with energy needs. The Project is deemed to be in public interest due to its benefits outweighing its minimized environmental impact.
Commission Penalized London-based Company for Online Investment Scheme
The Corporation Commission issued a default order against Pips Trailexch of London, United Kingdom (UK) after the company did not respond to allegations about soliciting investors with a trading and investment scheme. The Commission ordered the unincorporated and unregistered entity pay a $25,000 administrative penalty.
The Commission found that, although the business address of Pips Trailexch (Pips) is in the UK, the company’s website and/or domain is hosted in Phoenix, Arizona. Pips fraudulently offered different trading plans and options including foreign exchange (FOREX), cryptocurrency, stock and indices, commodities, crypto mining, exchange-traded funds (ETFs), and gold, which Pips claimed were “100 percent safe.” On its website, Pips misrepresented itself as a licensed member of international regulatory bodies including the Financial Supervisory Commission in the Cook Islands, but the license number belonged to another company. The Commission’s Securities Division is aware of at least one Arizona resident who was targeted by Pips, but no known Arizonans to date have lost money as a result of this ongoing investment scheme.
Rates Approved and Challenges Resolved at Coyote Wash Utilities
Coyote Wash, an Arizona LLC and Class D wastewater utility, has seen its customer base grow from 281 to 823 since its last rate case in 2011. The Company came to the Commission seeking a rate increase after significantly investing in their capacity to treat wastewater. The plant now has a capacity of 235,000 GPD (gallons per day), expanded from 69,300 GPD as of February 2023. However, the plant was not in compliance with ADEQ standards during the test year ending December 2022 due to issues like exceedances in discharge limits. ADEQ issued a Notice of Opportunity to Correct Deficiencies, identifying six key areas of non-compliance, including failure to reduce discharge and emit offensive odors. The Commission requires that the company come into compliance with pertinent ADEQ and Yuma County requirements for wastewater collection and treatment as soon as possible.
STAFF OPEN MEETING
Executive Director’s Report
Developments across various departments include Administrative Services has expanding our workforce to 263 employees. The Corporations Division is supporting multi-agency approaches to reduce sober living housing, deed, and Medicaid fraud. The Hearing Division has a robust calendar scheduled through June 2024, including diverse case types like rate cases and securities matters. We expect the Rio Verde Foothills recommended order to be considered by the end of January. The IT Division boasts a 99.86% network availability and is planning a Data Center Upgrade. The Safety Division is fully staffed and scored highly in a recent audit. Railroad activities include a completed 5-year rule review and a user fee proposal. Securities Division is ramping up public outreach, with a focus on outreach to Spanish speaking communities. Utilities Division is handling a high volume of cases and is working on employee engagement strategies, with 54 out of a possible 73 full-time positions currently filled.
Public Utility Security Planning
The Arizona Corporation Commission was exploring options for public service corporations to report cybersecurity concerns to organizations like the Arizona Fusion Center, also known as the Arizona Counter Terrorism Information Center (ACTIC), a model successfully implemented by the New Jersey Board of Public Utilities. Recognizing the sensitive nature of these issues for utilities and the limited responsiveness from the Arizona Department of Homeland Security (AZDOHS), the Commission estimates that elevating staff capabilities for effective cybersecurity engagement would require 5-6 additional staff members at a cost of approximately $600,000, excluding equipment. The next step involves Director Clark initiating communications with AZDOHS on behalf of the Commission to evaluate next steps.
Alternative Funding Mechanism for Railroad Safety
Despite a limited $800,000 legislative appropriation, the Safety Division has made progress in improving some of the nation's most hazardous rail crossings. To strengthen rail safety in Arizona, the Commission proposes a Railroad Safety Program funded by a modest user fee on freight railroads. This fee-based approach, proven effective in 22 other states, aligns with Commission guidelines and is proportional to the service costs. The additional funding will enable innovations like real-time monitoring, drone inspections, and advanced safety equipment.
Information Learned from Recent Conferences
Chairman Jim O'Connor has been actively engaging with both the industry and the public to enhance understanding of the Commission's role. He is set to attend the upcoming Markets+ leadership forum at APS headquarters on November 1, along with all fellow commissioners. In a recent outreach effort, Chairman O'Connor spoke at Heritage Academy High School, addressing hundreds of students to shed light on the Commission's work. He expressed a strong desire for both staff and commissioners to accept speaking invitations, particularly those aimed at educating the youth and the general public. While acknowledging that public interest can sometimes be limited or based on misconceptions, Chairman O'Connor remains committed to public education as a cornerstone of his leadership at the Commission.
Commissioner Lea Márquez Peterson serves on the advisory council for EPRI, an energy power think tank, and has recently visited Massachusetts to attend a meeting that focused on grid-enhancing technologies and long-term duration storage. She updated her fellow commissioners on the work being done by EPRI on various innovative storage resource research that offer more than 10 hours of energy storage as opposed to the conventional 4 hours. Her visit included witnessing tests that simulate lightning strikes and wildfires to evaluate vendor technologies and new transmission line innovations. In addition to her work with EPRI, Commissioner Márquez Peterson attended a WIRAB/ CREPC (Committee on Regional Electric Power Cooperation) meeting alongside Commissioner Thompson and serves as the vice-chair of the Western Interconnection Reliability Activities Board (WIRAB). While attending, she moderated a discussion with a large customer panel featuring companies like Google, Microsoft, and Freeport McMoRan that focused on future needs for significant resources across the West. Furthermore, she attended the National Association of Water Companies annual meeting with her fellow Commissioners in which she moderated a panel discussion between water utility CEOs allocated across the country focused on emergency preparedness.
Commissioner Kevin Thompson recently attended a conference focused on transmission, underlining the importance of this subject in future regulatory discussions, whether related to joining a Western RTO or Markets+. He is one of only three state regulators selected to sit on a launch committee tasked with crafting mission statements. This committee is also exploring the need for legal interpretations concerning CAISO's governing authority as an independent manager. One of the key questions they are addressing is how to develop plausible pathways for transitioning to a day-ahead market. Through his involvement in these initiatives, Commissioner Thompson is playing a crucial role in shaping the future landscape of energy transmission and market structures.
In the past few weeks Commissioner Myers has visited five different utilities throughout the state to assess their operational status. Many of these utilities had undertaken the task of reviving failing operations and the tours served as a check on their progress. Commissioner Myers has also been actively involved in the development of SPP’s Markets+ day-ahead market. He is serving on the Markets+ Greenhouse Gas Task Force and the Markets+ Resource Adequacy Task Force, which have been developing tariff language to be sent on to the Markets+ Design Working Group. Commissioner Myers’s priority in these task forces has been to ensure reliable and affordable power for Arizonans.
Agenda Item for Public Input at the Next Open MeetingThe Arizona Corporation Commission is considering a vote to encourage staff to engage in rate case settlement discussions. This item will be included in the agenda for the next Open Meeting.