[authors: Harris, Greg; Bingham, Matt]
In a letter to the Commissioners last week, Janice Alward, Chief Counsel for the Arizona Corporation Commission (ACC), analyzed a bill currently pending in the Arizona Legislature and concluded that it is unconstitutional. HB 2789 would require the ACC to get legislative approval of "all rules or amendments to existing rules ... concerning public service corporations that are policy decisions, including rules mandating the use of specific sources of energy or imposing or increasing energy efficiency standards or renewable energy standards." Alward concludes that the bill "is unconstitutional insofar as it requires the Commission to submit rules related to ratemaking to the Legislature and the Governor for approval." The primary basis for her conclusion is that the Arizona Constitution gives the ACC exclusive authority over ratemaking and the courts have already determined that the Commission's Renewable Energy Standard & Tariff (REST Rules) -- a clear target of the bill -- falls within that exclusive authority. Alward goes on to conclude that the bill would violate the separation of powers doctrine, is unconstituionally vague and overbroad, and does not consider the practical consequences of the bill on the ACC's rulemaking process.
HB 2789 was introduced by Representative Debbie Lesko (R-Glendale) and is co-sponsored by an additional 29 legislators -- all Republican -- from both the House and Senate. In addition to its legislative support, ACC Chairman Gary Pierce also supports the bill according to this article by the Arizona Republic ("Long term, it probably is a good thing," Pierce said. "I want to have a lively debate by policy makers on energy issues. I don't think making legislation or policy should be easy."). In response to a Feb. 15th editorial about HB 2789, Chairman Pierce sent a letter to the Yuma Sun "reject[ing] the notion that it is constitutionally problematic for the Legislature and the corporation commission to exercise concurrent jurisdiction over utilities in this state." This statement is not controversial since, as pointed out in the Chairman's letter, utilities are regulated by various agencies on matters such as environmental quality, labor and employement, etc. However, the letter does not address the specific question raised in Alward's memo: whether the legislation would infringe on the the ACC's ratemaking authority, which is exclusive and based in the constitution.
Read more here.