I have been involved with utilities and regulatory work for almost 40 years. During that time I have seldom seen an administrative law judge understand and articulate the issues at hand with the clarity and knowledge Judge Teena Jibilian did recently.
A few days ago Judge Jibilian filed her Recommended Order on whether APS should be granted its request to immediately raise the solar charge from $5 to $21.
Her recommendation to the Arizona Corporation Commission was that the APS request should be denied. In addition, she said any changes to the solar charge and any other rate design issues should be done in the next APS rate case.
I applaud Judge Jibilian’s recommendation – not just because her suggestions mirror precisely what I and others have been advocating – but because it is simply the right prescription. Judge Jibilian now joins a long list of parties that have been arguing any changes should be done in a rate case.
That list included most interveners, other electric utilities, the commission staff and myself. Remember, Tucson Electric, UNS and Tri Co all filed similar requests, though they subsequently pulled their filings and are now advocating for rate cases to address the cost shift issue.
The law judge saw through the APS filing shenanigans. Reminding everyone that the original order said a long-term solution would be worked out in the next rate case where all issues are looked at and everyone can participate.
Additionally the recommended order discussed how the $70 cost shift claim by APS has not undergone any scrutiny and is widely challenged by others as being too high.
“Our subsequent determination … to remove the requirement for APS to file a rate case in June 2015 did not alter the need for examination of the fixed cost recovery issues in a manner that will allow all interested parties to provide evidence to support their positions on the issue and to cross examine expert witnesses. Just because the rate case was delayed doesn’t change that,” wrote Judge Jibilian.
She went on to state that the cost shift problem is minimal at this time and there are other contributing factors like energy efficiency that cause more cost shift than solar and that APS didn’t ask to change that.
The judge questioned the wisdom of addressing this single issue now given that APS will be filing a rate case in a few months and this issue would be considered again. Many other issues in the APS filing were addressed but her conclusion was, “(APS) arguments have not established an urgent need for commencing a proceeding on the Reset Application at this time. Any proposal presented outside a rate case to address the recovery of fixed costs on an interim basis would be severely limited in scope.”
So where does this leave APS and the commission? The commission staff and the judge have both recommended that long-term solutions be pursued in a rate case. In all likelihood the commission will vote on the recommended order in the next open meeting on August 18th and 19th.
The ACC can accept, deny or modify the recommended order. Here’s hoping the answer is to pursue a solution through a rate case, not because it is what I have long advocated, but because that answer is, quite simply, the right one.
— Pat Quinn is the former president of Qwest Communications in Arizona and served as director of the Residential Utility Consumer Office during Gov. Jan Brewer’s administration.
Mr. Quinn hit the nail on the head. ALJ Jibilian is correct in her decision. Also, by moving prior to the scheduled rate case, the cost to litigate the same issue twice would prove overly burdensome for all ratepayers thus overriding the benefit initially perceived.