A Maricopa County Superior Court judge dismissed a lawsuit challenging a controversial proposal approved last year by the Arizona Corporation Commission to allow utility companies to seek yearly rate increases.
The ruling leaves in place a “policy statement” approved 3-2 by commissioners in December to allow the electric, water and gas companies the commission regulates to seek yearly rate adjustments, sidestepping the traditional rate case system that can take years to complete.
Critics, including consumer advocates, argued the new process weakens the opportunity for the public to weigh in on rate cases.
Others argued commissioners violated state law in creating the policy by bypassing a formal rulemaking process – a concern shared by Attorney General Kris Mayes and the two commissioners who voted against the policy statement, Democrat Anna Tovar and Republican Lea Márquez Peterson.
The Residential Utility Consumer Office, a state agency that advocates for ratepayers, made that same argument in their lawsuit challenging the policy, arguing that the Corporation Commission violated Arizona’s Administrative Procedures Act when adopting the new rate policy.
But Maricopa County Superior Court Judge Susanna Pineda ruled that the APA explicitly exempts the Corporation Commission from its procedures.
Pineda noted RUCO could have challenged the rate policy under a different state statute, but failed to do so within 30 days of the commission adopting the policy.
Commission Chair Kevin Thompson, who voted to approve the policy statement, applauded the ruling dismissing the legal challenge.
“The court unequivocally affirmed our constitutional authority to set policy and rules in our ratemaking capacity," he said.
In a statement, RUCO attorney Sarah Barrios Cool lamented their case was dismissed without review of the substance of the commission’s new rate policy – nor did the judge determine whether that policy is actually a rule, and subject to formal rulemaking.
“RUCO is disappointed with the outcome and evaluating next steps,” Barrios Cool said.
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