Current through Register Vol. 30, No. 38, September 20, 2024
A. Definitions. In this Section, unless
otherwise specified:
1. "Affiliated entity"
means an "entity" as defined in A.A.C.
R14-2-801
that, in relation to a cooperative, meets the definition of an "affiliate" in
A.A.C. R14-2-801.
2. "Base revenue" means the revenue generated by
permanent rates and charges, excluding:
a.
Revenue generated through adjustor mechanisms, and
b. Revenue generated through miscellaneous
service charges.
3. "CFC" means the
National Rural Utilities Cooperative Finance Corporation.
4.
"Commission" means the Arizona Corporation Commission.
5.
"Cooperative" means a legal entity that is:
a.
A domestic corporation or a foreign corporation authorized to transact business
in this state;
b. Operated as a
not-for-profit or non-profit;
c.
Owned and controlled by its members; and
d. Operating as a public service corporation
in this state by providing electric utility services, natural gas utility
services, or water utility services from an affiliated
entity.
6. "Customer"
means anyone who receives utility service from the cooperative.
7.
"Docket Control" means the organizational unit within the Commission's Hearing
Division that accepts, records, and maintains filings.
8.
"FERC" means the Federal Energy Regulatory Commission.
9.
"File" means to submit to Docket Control, with the required number of copies
and in an acceptable format, for recording under an appropriate docket number.
10. "Full permanent rate case decision" means a
Commission decision:
a. Issued on an
application filed under
R14-2-103
and not under this Section,
b. In
which the Commission ascertained the fair value of a public service
corporation's property within Arizona and established a schedule of rates and
charges for the public service corporation's provision of utility services
within Arizona, and
c. Not issued
under A.R.S. §
40-252.
11.
"Non-price tariff change" means modification of one or more tariff provisions,
either through altering existing tariff language or adding new tariff language,
in a manner that substantively alters a requirement other than a rate or
charge.
12. "Rate schedule" means a schedule of rates and
conditions for a specific classification of customer or for other specific
services.
13. "Rate structure change" means any of the
following:
a. Introduction of a new rate
schedule;
b. Elimination of an
existing rate schedule;
c. A change
in base revenue generated by the residential rate class greater than 150% of
the overall base revenue increase;
d. A change greater than 35% in the customer
charge within a rate schedule for residential customers; or
e. A change in the rate blocks or the
percentage relationship of the prices among rate blocks.
14.
"RUS" means United States Department of Agriculture, Rural Utilities
Service.
15. "Staff" has the same meaning as in
R14-2-103.
16.
"Test year" means the one-year historical period used in determining rate base,
operating income, and rate of return, which shall have an ending date within 12
months before the filing date for a rate application under this Section and
shall include at least six months during which a cooperative's current rates
and charges were in effect.
17. "Timely" means in
the manner and before the deadlines prescribed in this
Section.
B. Eligibility
Requirements. Except as provided in subsection (C), a cooperative may file and
pursue a rate application under this Section rather than
R14-2-103
only if the following eligibility requirements are met:
1. A
full permanent rate case decision for the cooperative has been issued within
the 20-year period immediately preceding the filing of the cooperative's rate
application;
2. The cooperative has not filed a rate application
under this Section within the 12 months immediately preceding the filing of the
cooperative's rate application;
3. The cooperative is
required by law or contract to make a certified annual financial and
statistical report to a federal agency, such as RUS or FERC, or an established
national non-profit lender that specializes in the utility industry, such as
CFC or CoBank;
4. The test year used in the cooperative's rate
application complies with the definition of a test year in subsection
(A);
5. The cooperative's rate application includes the
most recent audited financials for the cooperative;
6. The cooperative's
rate application does not propose an increase in total base revenue amounting
to more than 6% of the actual test year total base revenue;
7. The
cooperative's rate application uses its original cost rate base as its fair
value rate base;
8. The cooperative's rate application proposes changes
in rates and charges and non-price tariff language consistent with subsection
(D) and does not propose
adoption of a new
hook-up fee or another new type of fee;
9. The cooperative's
rate application does not propose a rate structure change except for the
elimination of a rate schedule if the rate schedule has had no customer
participation within the one year prior to the test year through and including
the test year;
10. The cooperative's rate application does not
request financing approval and does not request consolidation with another
docket;
11. The customer notice provided by the cooperative
conformed to the requirements of subsection (F) and was approved by
Staff;
12. For a distribution cooperative, the objections
timely submitted by the cooperative's customers represent no more than 5% of
all customer accounts or no more than 1,000 customer accounts, whichever is
fewer; and
13. For a generation or transmission cooperative, no
member distribution cooperative has filed a timely objection to the
application, and the objections timely submitted by retail customers served by
member distribution cooperatives represent no more than 3,000 customer
accounts.
C. A
multi-jurisdictional cooperative with less than 30% of its customers within
Arizona that seeks only to implement rates for Arizona customers that are
already effective in the jurisdiction where the majority of the cooperative's
customers are located may pursue a rate application under this Section without
meeting the eligibility requirements of subsections (B)(1) through
(10).
D. A cooperative may propose
any of the following in its rate application filed under this Section:
1. Changes to an existing adjustor
rate;
2. Changes to an existing
surcharge rate;
3. Changes to an
existing hook-up fee or other fee;
4. Adoption of a new adjustor mechanism or
surcharge mechanism, if the mechanism has been previously approved by the
Commission;
5. Adjustment to the
base cost of power;
6. Changes to
non-price tariff language, including language that freezes participation in a
tariff to existing customers;
7.
Changes to depreciation rates, if supported by a depreciation study approved by
Staff engineers; and
8. Waiver of
one or more of the eligibility requirements in subsections (B)(1) through
(B)(10), except (B)(3).
E. Pre-Filing
Requirements. Before filing a rate application under this Section, a
cooperative shall:
1. Analyze the
cooperative's eligibility under subsection (B);
2. Submit to Staff, in both hard copy and
electronic (with formulae intact) formats, a Request for Pre-Filing Eligibility
Review, which shall include a draft application including the items and
information described in subsections (G)(1) through (6), and a copy of the
Proposed Form of Notice to be sent to the cooperative's customers;
3. No sooner than 30 days after the date
Staff receives the Request for Pre-Filing Eligibility Review, meet with Staff
to discuss the cooperative's eligibility under subsection (B) and any Staff
modifications to the Proposed Form of Notice; and
4. After meeting with Staff, if the
cooperative decides to pursue a rate application under this Section, file a
Request for Docket Number and Proposed Form of Notice for Staff approval.
F. Notice Requirements.
1. A cooperative shall ensure that the
Proposed Form of Notice submitted to Staff for approval includes, at a minimum,
all of the following:
a. The cooperative's name and contact
information;
b. The docket number assigned to the cooperative's
rate application proceeding;
c. A summary of the
rate relief requested by the cooperative in its rate application;
d. For
a distribution cooperative, the monthly bill impact to a residential customer
with average usage if the requested rate relief were granted by the Commission;
e. For a generation or
transmission cooperative, the estimated rate and revenue impact to each member
distribution cooperative served if the requested rate relief were granted by
the Commission;
f. Instructions for viewing or obtaining filed
documents;
g. Information regarding the Commission's process
under this Section;
h. The deadline to file intervention requests and
objections, which shall be a date no earlier than 30 days after the date Notice
is mailed to customers;
i. Instructions for
requesting intervention and submitting objections; and
j.
Information regarding disability accommodations;
2. After receiving Staff approval for a form
of Notice, a cooperative shall provide notice of its application as follows:
a. If a distribution cooperative, by sending
the Notice, by First Class Mail, to each of the cooperative's customers;
and
b. If a generation or
transmission cooperative, by publishing the Notice in at least one newspaper of
general circulation in the service territory of each member distribution
cooperative served and by sending the Notice, by First Class Mail, to each
member distribution cooperative served.
G.
Filing Requirements. Within twenty days after completing the provision of
Notice as required by subsection (F)(2), a cooperative shall file in the
assigned docket a rate application under this Section, which shall include the
following:
1. The legal name of the
cooperative and identification of the test year;
2. A waiver of the use of reconstruction cost
new rate base to determine the cooperative's fair value rate base;
3. A copy of the most recent certified annual
financial and statistical report submitted by the cooperative to a federal
agency, such as RUS or FERC, or an established national non-profit lender that
specializes in the utility industry, such as CFC or CoBank;
4. A copy of the most recent audited
financials for the cooperative;
5.
The information listed in the table in
R14-2-103(B)(1)
for Schedule A-1, which shall be submitted in the format provided in Appendix
Schedule A-1;
6. The information
listed in the table in R14-2-103(B)(1) for Schedules B-2, C-1, C-2 (if
applicable), E-5, E-7, E-9, and H-1 through H-5, which:
a. Shall be included on schedules labeled
consistently with and containing the substantive information corresponding to
the Appendix Schedules,
b. Shall
conform to the instructions and notes contained on the corresponding Appendix
Schedules,
c. May be submitted in
the format provided in the Appendix Schedules or formatted in an alternate
manner, and
d. May omit information
that is not applicable to the cooperative's operations;
7. The information listed in the table in
R14-2-103(B)(1) for Schedules B-3 and B-4, if requesting a change in
depreciation rates in accordance with subsection (D)(7);
8. A
copy of the Notice sent and, if applicable, published, as required under
subsection (F)(2); and
9. Proof that the Notice was sent and, if applicable,
published, as required under subsection (F)(2).
H.
Pre-Eligibility-Review Objections and Requests. Any person desiring to object
to the cooperative's rate application or to request intervention in the
cooperative's rate case shall file an objection or request no later than the
date specified in the Notice provided pursuant to subsection (F)(2).
I.
Late Objections. In determining the cooperative's eligibility to proceed with
its rate application under this Section, Staff shall not consider any objection
that is filed after the deadline in the Notice provided pursuant to subsection
(F)(2).
J. Eligibility and Sufficiency Review. Within seven
days after the deadline for objections and intervention requests specified in
the Notice provided pursuant to subsection (F)(2), Staff shall:
1. Review the cooperative's rate application,
along with any objections timely filed under subsection (H), to determine
whether the cooperative is eligible, under subsection (B), to pursue its rate
application under this Section;
2.
File either a Notice of Eligibility or a Notice of Ineligibility;
3. If the cooperative is eligible, complete
the following:
a. Conduct a sufficiency review
of the cooperative's rate application;
b. Determine whether the rate application
complies with the requirements of subsection (G); and
c. File either a Notice of Sufficiency that
classifies the cooperative as provided in
R14-2-103(A)(3)(q)
or a Notice of Deficiency that lists and explains each defect in the rate
application that must be corrected to make the rate application
sufficient.
K. Eligibility and
Sufficiency Determinations. Staff's determinations of eligibility,
ineligibility, sufficiency, and deficiency are not Commission decisions or
Commission orders under A.R.S. §§
40-252
or
40-253.
A cooperative or intervenor that disagrees with Staff's determination of
eligibility, ineligibility, sufficiency, or deficiency may petition the
Commission to review Staff's determination by filing a petition in the docket.
A Commissioner may include a petition for review as an agenda item to be
considered by the Commission at an Open Meeting. If a petition for review is
not included in an Open Meeting agenda within 30 days after the date it is
filed in the docket, the petition for review shall be deemed denied.
L.
Request for Processing under
R14-2-103.
Within 75 days after a Notice of Ineligibility is filed, a cooperative may file
a Request for Processing under
R14-2-103.
If a cooperative files a Request for Processing under
R14-2-103,
all further activity under this Section shall cease, and the cooperative's rate
application shall be deemed a new rate application, filed under
R14-2-103,
on the date the Request for Processing under
R14-2-103
is filed.
M. Docket Closure. If a Request for Processing under
R14-2-103
is not filed within 75 days after a Notice of Ineligibility is filed, the
Hearing Division shall issue a procedural order administratively closing the
docket.
N. Action on Notice of Deficiency. After Staff files a
Notice of Deficiency:
1. The cooperative
shall promptly address each defect listed in the Notice of Deficiency and file
all necessary corrections and information to bring the rate application to
sufficiency; and
2. Within 10 days
after receiving the cooperative's corrections and information, Staff shall
again take the actions described in subsection (J)(3).
O.
Substantive Review and Staff Report. After Staff files a Notice of Sufficiency,
Staff shall:
1. Conduct a substantive review
of the rate application;
2. Prepare
a Staff Report that shall include Staff's recommendations and may include a
Request for Hearing that complies with subsection (Q); and
3. File the
Staff Report (and a Recommended Order if no Request for Hearing) within:
a. 150 days after the Notice of Sufficiency
is filed, for a rate application requesting adjustment to the base cost of
power;
b. 120 days after the Notice
of Sufficiency is filed, for a rate application requesting a new adjustor
mechanism; and
c. 60 days after the
Notice of Sufficiency is filed, for any other rate
application.
P. Responses to Staff
Report. Within 10 days after Staff files a Staff Report:
1. The cooperative shall file a Response to
the Staff Report, which may include a Request for Hearing that complies with
subsection (Q) or a Request for Withdrawal; and
2. Each intervenor shall file a Response to
the Staff Report, which may include a Request for Hearing that complies with
subsection (Q).
Q. Request for Hearing.
A Request for Hearing shall include, at a minimum, an explanation of the
requesting party's reasons for believing that an evidentiary hearing should be
held; a summary of each issue on which the party believes evidence should be
provided; and a recitation of the witnesses and documentary evidence that the
requesting party believes could be produced to provide evidence on each
issue.
R. Responses to and Action on Request for Hearing.
1. A party shall file any response to a
Request for Hearing within five business days after the Request for Hearing is
filed.
2. The Hearing Division
shall rule on each Request for Hearing within 10 business days after it is
filed and may require oral argument or other proceedings at its discretion in
considering a Request for Hearing.
3. The Hearing Division may extend the party
response deadline or Hearing Division's ruling deadline for good
cause.
4. If a hearing is granted,
the Hearing Division shall preside over all further proceedings in the
case.
S. Action on Request for Withdrawal. The Hearing
Division shall rule on each Request for Withdrawal and may require party
responses, including oral argument, or other proceedings at its discretion in
considering a Request for Withdrawal. If withdrawal is granted, the Hearing
Division shall issue a procedural order administratively closing the
docket.
T. Requirement for Service. A party that files a
document under this Section shall also serve a copy of the document on each
other party to the case, in accordance with the Commission's rules or as
otherwise authorized by the Commission.
U. Revenue Increase
Cap. No Commission decision issued under this Section shall increase a
cooperative's base revenue by more than 6% of the cooperative's actual test
year total base revenue, unless the cooperative meets the requirements of
subsection (C). In calculating the 6% base revenue increase cap, the Commission
shall not include the revenue derived from a change to the base cost of power,
an existing adjustor rate, an existing surcharge rate, an existing hook-up fee,
or another existing fee or the addition of a new adjustor mechanism or
surcharge mechanism.
V. The Commission may, at any stage in the processing
of a cooperative's rate application under this Section, determine that the rate
application shall instead proceed under
R14-2-103.
W. Recommended Opinion and Order. The Hearing
Division shall issue a Recommended Opinion and Order within 90 days after the
last day of a hearing held under this Section.
X. The Commission may, for good cause, waive
an eligibility requirement of subsection (B).
