Arizona Staff File Draft Rules For Retail Electric Choice, Would Limit Eligible Customers To Certain Classes, Sizes

Staff Propose Allowing Municipal Aggregation, With CCAs Allowed To Serve All Customers

Retail Supplier Services Subject To Approval Via Tariff

July 2, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Staff of the Arizona Corporation Commission have filed a report regarding "possible" modifications to the ACC's retail electric competition rules

The report represents an initial draft. Staff noted that the proposed rules may yet undergo further substantial revisions after the workshop process and informal comment before a formal rulemaking process begins.

Notable is that under the draft rules, customers eligible for retail electric choice would be defined only as all non-residential consumers who use more than 100 kW demand monthly.

Under the draft, non-residential consumers who do not meet the monthly demand of 100 kW may, within the same service area, aggregate to combine and consolidate their loads, the aggregation of which must total at least 1 MW.

The draft would allow for Community Choice Aggregation ("CCA"), also known as municipal aggregation. A CCA is defined under the draft as a program that allows local governments to "procure" power on behalf of their "residents, businesses, and municipal accounts," from an alternative supplier while still receiving transmission and distribution service from their incumbent utility.

The definition does not address opt-out authorization for CCA service, nor is opt-out authorization explicitly addressed elsewhere in the draft

However, a portion of the legacy rules, for which no modification is proposed, provides that no customer shall be deemed to have changed provider for any service authorized under the rules (e.g. competitive supply) without "written authorization" by the customer

Staff is proposing that CCAs be allowed in Arizona only for municipalities

The draft leaves the date for electric choice to begin as "to be determined"

As a result of Phelps Dodge and the ACC's constitutional mandate, the daft would strike the provision in the legacy rules which states that a retail supplier's market rates shall be deemed just and reasonable

Instead, each Electric Service Provider (retail supplier) would be required to have on file with the Commission tariffs describing the minimum, current and maximum rates for its services, and the services may not be provided until the Commission has approved the tariffs

Concerning renewables, the draft would provide that any LSE must meet the applicable requirements, unless otherwise ordered by the Commission. The draft would provide that incumbent utilities would recover the cost to meet the renewable standards in "base rates" as part of the System Benefit Charge. However, the draft further provides that retail suppliers would also receive a pro rata share of funds from the System Benefit Charge

In a change from the current legacy rules (but not current operations), the draft would provide that the Incumbent Utility will be the meter service and meter reading service provider.

The draft also removes the current reciprocity requirement in the legacy rules

Staff will be hosting a stakeholder meeting to discuss the Commission's retail electric competition rules on July 30, 2019

Docket E-00000A-18-0405

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