Corporation commissioner considers hearing to dig into deregulation

Dismayed by the combative stance adopted by critics and proponents of electricity deregulation and dissatisfied by answers he’s received so far, a state regulator is mulling a court-style hearing to dig deeper into the pros and cons.

Bob Burns, a member of the Arizona Corporation Commission and former Senate president, told colleagues in a letter Tuesday that he’s dismayed by the tone of the deregulation debate and lamented that stakeholders are missing the chance to work constructively with commissioners.

Burns said he had expected interested parties and stakeholders to provide information in a way that would facilitate a “cooperative atmosphere” and help the commissioners make a decision.

That’s not what he’s seeing, he told the Arizona Capitol Times.

Instead, some deregulation critics don’t even want the commissioners to discuss the idea of breaking up the monopolies, he lamented.

“Part of our job is to think, and part of this rhetoric has been advising us to not even think about this issue. The message has been: ‘Drop it – don’t do it. Don’t even think about it,” he said.

Burns said what’s unfolding, alongside efforts to persuade commissioners that one side’s arguments are technically superior, is a public relations campaign that has “hampered” their ability to get clear answers.

“It’s almost a scare campaign. People are being told there will be blackouts and all kinds of bad things that are going to happen. How do we know that?” he said.

Burns laid out his frustrations in a letter to colleagues early this month.

Burns didn’t cite specific names, but his dismay was directed at deregulation critics and, to a lesser extent, at proponents.

Chiding both sides, he said he had expected that deregulation critics to welcome the “fresh exchange of ideas” that could lead to recommendations about how to improve the current system.

He added he had hoped proponents would provide “detailed answers” to his questions about how a deregulated market would work in Arizona.

To find the answers, Burns is suggesting an evidentiary hearing at the commission, where both sides can file briefs, present witnesses and cross examine witnesses – just like in a full-blown court in trial.

Typically, evidentiary hearings at the commission deal with rate increases that utility companies are seeking. An administrative law judge presides over these hearings, and a court recorder is present. Commissioners may sit as a co-judge and could also pose questions to witnesses.

A hearing could take a day or two months, depending on its complexity.

An evidentiary hearing on something as complex as electricity deregulation is likely to take weeks, if not months, to complete.

Such a hearing could also be expensive, as stakeholders might have to hire lawyers and experts.

In his letter, Burns wanted clear answers on five points, where both sides have offered conflicting data, such as whether Texas is experiencing capacity issues or is generating sufficient energy to meet that state’s energy demand.

Meanwhile, Commissioner Brenda Burns is organizing a series of stakeholder meetings, explaining that she still has much to learn about electric retail.

The first stakeholder meeting is scheduled this Friday at 10 a.m.

The topic is about the legal complexities surrounding electricity deregulation, including a discussion of Phelps Dodge v Arizona Electric Power, the 2004 Court of Appeals decision that struck down key deregulation rules adopted by regulators in the 1990s.

The Goldwater Institute’s Nick Dranias and Michael Grant of the Arizona Investment Council have been invited to make presentations.