The Arizona Corporation Commission (ACC) says it had the legal authority to repeal the state’s Electric Energy Efficiency Standards without review from the Arizona Attorney General’s Office. The decision has renewed debate over the commission’s constitutional powers and the role of the attorney general in overseeing regulatory changes that affect utility customers.
The repeal comes weeks after Attorney General Kris Mayes blocked a separate effort by the commission to repeal another utility-related rule, setting the stage for another potential legal dispute.
Authority
The Republican-controlled Arizona Corporation Commission argues that repealing the Electric Energy Efficiency Standards falls within its constitutional ratemaking authority.
According to the commission, rules adopted under Article 15, Section 3 of the Arizona Constitution are part of its exclusive authority over utility rates and regulation.
ACC counsel Thomas Van Flein said in a statement that longstanding court precedent supports the commission’s position.
“Under long standing court precedent, rules based under Article 15, Sec. 3, are implemented under the Commission’s ratemaking authority. The Attorney General does not have any role to assert in this rule making,” Van Flein said.
Dispute
Arizona law generally requires state agencies to submit administrative rules to the Attorney General’s Office for review unless the rules are directly related to utility ratemaking.
Attorney General Kris Mayes recently rejected another commission rule repeal, arguing it required her office’s review. However, the commission maintains that the energy efficiency standards fall into a different legal category because they relate directly to ratemaking.
Interestingly, when the standards were originally adopted in 2010, the commission submitted them to the attorney general for review. At that time, commissioners acknowledged that some utility rules could include both ratemaking and non-ratemaking elements.
Mayes chaired the commission when those standards were approved but has not publicly commented on the latest repeal.
Standards
The Electric Energy Efficiency Standards were adopted in 2010 to encourage utilities to reduce electricity consumption through energy-saving programs.
Under the rules, Arizona’s electric utilities were expected to achieve energy savings equal to approximately 22% by 2020 through efficiency initiatives offered to customers.
The current commission says utilities have already exceeded those targets, making the standards outdated and no longer necessary.
| Standard Detail | Information |
|---|---|
| Adopted | 2010 |
| Energy Savings Goal | About 22% by 2020 |
| Current Status | Repealed by the ACC |
| Review Dispute | Whether Attorney General review was required |
Utilities
Several of Arizona’s largest electric providers supported repealing the standards.
Utilities including Arizona Public Service (APS) and Tucson Electric Power (TEP) backed the commission’s decision, agreeing that the original efficiency goals had already been met.
The repeal also comes as Arizona experiences growing electricity demand driven by expanding data centers and other large industrial developments, increasing pressure on the state’s power grid.
Concerns
Although utilities supported the repeal, consumer advocates and former public officials have raised concerns about eliminating the review process.
Former Arizona Attorney General Terry Goddard said the attorney general plays an important role in protecting consumers when regulatory rules are changed.
“Invariably, what the Arizona Corporation Commission does is going to impact consumer interests, and therefore, outside of the ratemaking process, the AG has a huge interest in making sure that they get it right,” Goddard told KJZZ.
He also said independent legal review helps ensure that significant regulatory changes receive careful examination before taking effect.
Outlook
The commission acknowledged that its legal position could ultimately be tested in court. In its own statement, the ACC noted that the Arizona Supreme Court, if asked, may not necessarily agree that the energy efficiency rules were entirely authorized under the commission’s constitutional ratemaking authority.
Whether the repeal faces a legal challenge remains uncertain. For now, the debate highlights broader questions about the balance of authority between the Arizona Corporation Commission and the Attorney General’s Office, as well as how future utility regulations will be reviewed.
FAQs
What did the ACC repeal?
The Electric Energy Efficiency Standards.
Why did the ACC skip attorney general review?
It says the repeal falls under ratemaking authority.
When were the standards adopted?
The standards were adopted in 2010.
Which utilities supported the repeal?
APS and Tucson Electric Power supported it.
Could the repeal face legal challenges?
Yes, the issue could ultimately reach the courts.
