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Phoenix, Ariz. — The Arizona Corporation Commission voted on 19 matters, including securities, electric, and water items. Highlights from the meeting include:
Securities
Utilities
ACC
Cornerstone Wealth Management, LLC, et al. (S-21104A-20-0103) - William Andrew Smith of Tucson and Smith & Cox, LLC was ordered to pay a $60,000 administrative penalty for committing securities fraud and investment advisory fraud. The Commission found Smith and his firm breached their fiduciary duty to their clients by misleading them as to the reasons for transitioning to another financial firm. Smith and his affiliated company failed to disclose the Commission’s pending enforcement action against them and risk that they would lose their securities’ licenses
Navapoche Electric Cooperative, Inc. (E-01787A-25-0021)- Navapoche Electric Cooperative, Inc. (NEC) is a rural cooperative providing electric service to approximately 45,000 consumers in eastern Arizona. NEC’s Renewable Energy Standard and Tariff program offered a rebate of $500 per kW with a cap of $5,000 for new solar installations to residential and commercial customers since 2016. The REST fund became deficient in the amount of almost $990,000. NEC had proposed lowering the up front incentive to $500 per new solar installation for residential and commercial customers and implementing a temporary surcharge to collect the REST fund balance. The Commission, at first, discussed denying NEC’s request to implement a surcharge to address the REST program deficiency and directing Navapoche to propose possible remedies to the undercollected balance in its pending rate case. However, after an in-depth discussion, Chair Kevin Thompson proposed a verbal amendment to his own revised amendment, which approved the temporary surcharge with no upfront incentive, and ending the surcharge as soon as the deficiency is collected.
Liberty Utilities (Rio Rico Water & Sewer) Corp., Liberty Utilities (Beardsley Water) Corp., Liberty Utilities (Bella Vista Water) Corp., and Liberty Utilities (Cordes Lakes Water) Corp. – The Commission voted unanimously to approve a settlement reached between all parties to consolidate the four individual water and wastewater utilities, all of which are ultimately owned by Algonquin Power & Utilities, Corp, a publicly traded Canadian company. The parties intend for the Settlement Agreement to be a comprehensive accord to settle all disputed issues regarding rate and financing applications. The parties agreed to an ROE of 9.55%. All parties agreed “this is a good settlement.” Commissioner Rachel Walden sponsored an amendment that removed the costs associated with Board of Directors’ fees and related expenses. “This amendment is based on the principle that corporate governance costs should be borne by shareholders - not Arizona’s families and small businesses through their utility bills,” she said. Chairman Thompson agreed, adding, “Principle matters.”
Arizona Public Service Company (E-01345A-24-0186) – The Commission voted unanimously to deny APS’s requested accounting deferral order. APS states the cost increase associated with APS’s critical wildfire mitigation efforts are not being recovered in the Company’s current rates due to regulatory lag and the requested deferral will minimize the impact of these costs on customers allowing them to be recovered over a longer period of time. The Utilities Division Staff declared it is more appropriate to address the issue and reasonableness of the expenses APS is requesting as part of its review of the upcoming 2025 rate case application. Staff does not believe it is necessary in this case to deviate from the traditional regulatory treatment for the recovery of the fire mitigation expenses. The Residential Utility Consumer Office agreed with Staff’s assessment to deny the request for accounting deferral. APS representatives also state they would support that decision as well.
ACC – Gas Rules (RG-00000A-24-0024)- The Commission voted unanimously to repeal the Gas Utility Energy Efficiency Standards Rules – Article 25 and directed the Utilities Division to file a Notice of Rulemaking Docket Opening with the Office of the Secretary of State. The Hearing Division was ordered to hold an oral proceeding for public comment on September 4, 2025 and anyone interested in providing a written or oral comment must do so by September 4, 2025. “Energy conservation is something everyone is striving for these days. For the most part, the way in which these mandates are being carried out today, in my opinion, is nothing more than a gravy train,” said Chair Kevin Thompson. “It’s free money for developers and builders where so many special interest groups have been able to insert their hands into the pocketbook of ratepayers, and it’s got to end.” A repeal of the rules does not require Gas Energy Efficiency to cease. The Gas EE rules were established by Commission Decision No. 72042 on December 10, 2010.
ACC – Federal Energy Regulatory Commission Docket No. RM25-9: Interstate Natural Gas Association of America - The Commission voted unanimously to direct the Office of General Counsel to file a Motion to Intervene and to file a comment before the Federal Energy Regulatory Commission (FERC) in support of the Interstate Natural Gas Association of America’s (INGAA) petition to rescind Order No. 871 under RM25-9. INGAA’s petition, filed on April 14, 2025, aims to greatly reduce the time it takes to permit and build natural gas infrastructure across the United States. Vice Chair Nick Myers had requested this item on the agenda arguing that “it is important for the Commission to discuss INGAA’s petition because this matter is ultimately about ensuring our state and nation can meet the energy demands of today and tomorrow.”
ACC – Governor’s Regulatory Review Council re: the Commission’s Policy on Undergrounding (ALS-00000A-22-0320) - The Commission voted unanimously to direct the Office of General Counsel to respond to the Governor’s Regulatory Review Council’s (GRRC) review of the Commission’s Policy on Undergrounding. “The undergrounding policy is essentially a ratemaking policy that discusses who pays for the cost of undergrounding; the Commission asserts that the policy is not void, is in effect, and stands as written,” said Tom Van Flein, ACC’s General Counsel. ”The Office of General Counsel will prepare the Commission’s response as instructed noting that the Commission has its own rules process sanctioned by the Constitution and the appellate courts, and that GRRC has been expressly statutorily removed from having the ability to review Commission rules and policies.”
