Alright. Good morning, everybody. So we are starting our February open meeting. And I have 500 monitors here, so bear with me. Alright. So first I guess let's start with a prayer and a pledge. I'll do a quick prayer and Commissioner Thompson will do a pledge. Heavenly Father, we thank you for the opportunity to serve today. We ask for wisdom, humility, and grace in the work that we're gonna do today. Guide our decisions, through your son that we may act justly, speak truthfully, and serve the people entrusted to us with integrity. In your son's name,
we pray. Please join me in our pledge. I pledge allegiance to the flag of The United States Of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice Alright. Thank you. Now we have So for the first item of business, we have, five items on the consent agenda that are subject to, forty two fifty ARS forty two fifty two's. Those items are seven, ten, eleven, twelve, and 13. That's Union Pacific,
Cayetano, Rio Rico, Sunrise, and APS. So you see so if there's any parties to that that that would like to speak, now is the time. I'm not seeing anybody. So now, I guess I'll ask my fellow commissioners if there's other items that are currently on consent that need to be moved to the regular agenda. Nothing. Nothing? Alright. With that, I guess we have everything. There's also an amendment, from hearing on item number five. So, vice chair, if you wanna move the hearing amendment real quick, we'll do that and then do the consent.
Yes. I move, hearing amendment to discussion. Okay. Alright. Hang on. I think we got some technology issues here. That's not working. Okay. These aren't working. Okay. Alright. So because of the technology items or issues, we're gonna go ahead and move to, I guess, the first item and we'll come back to consent. So vice chair, can you go ahead and move, I guess, item number, what is that, 17? Yes. I move item Or 13. Nope. Sorry. Sorry. Sorry. There we go. 17. I'm with you. Move item number 17, Bakar Power, to discussion. Okay. Thank you.
And staff, please proceed. Good morning, chairman, vice chairman, and commissioners. Thomas Abshire on behalf of utility utilities division staff. Agenda item 17 is the application of Bacara Power LLC for a certificate of environmental compatibility authorizing the project project Bacara. The project consists of a new approximately 700 megawatt natural gas fired combustion turbine generation facility collocated with the data center. The project will interconnect to the APS 230 kilovolt transmission system through a new APS
owned substation located on the eastern edge of the project site. The line sighting committee held evidentiary hearings on December 1 through December 4 to receive evidence and deliberate on the application. Subsequently, the committee voted eight to one to approve the CEC. Staff is available for any questions you may have. Alright. Thank you. Do we have Adam Stafford here? Does he wanna say anything about it? Thank you, chairman, commissioners. ARS forty-three sixty asked the committee to balance a number of factors. The need for reliable electric service, the impact on existing and planned land uses, the protection of the environment and public health,
the impact on scenic historic and natural resources and whether unbalanced this facility serves the broader public interest. So the site, the project site's approximately 160 acres it's next to Luke Air Force Base. It's been zoned heavy industrial since 2000 so twenty five years has been zoned for this type of use. It's the sites in close proximity to transmission lines, fiber network, natural gas pipeline and underground propane storage facility. The applicant will conduct a class three cultural resources survey for the entire site.
On the air side, there's their air permit for a non major new source is pending before Merrick County and would limit the plant to an approximately 30% capacity factor and the plant will run on gas natural gas or propane and it will have black start capability with either four tier four diesel generators or batteries and the applicant specifically agreed to tier four which is the lesser polluting than the tier two which currently surround the area for other data centers. When it comes to water the site has a current agricultural groundwater rights of seven
zero eight acre feet a year. The type one conversion will reduce these rights to three eighty two acre feet per year and the anticipated project need is 120 acre feet a year. 120 acre feet a year. The applicant's in the process of getting the site annexed by Glendale. Once that happens, they'll have water and wastewater services from EPCOR, a public service company. The annexation will also allow them to to access treated wastewater from a nearby brewery for most of the plants water needs. The plant's gonna connect initially to ED7 Electrical District Number 7 and that ED7 would later connect to APS's transmission system.
I believe it's the CEC one hundred and ninety eight is the line that runs right past the facility. There was a board member from ED7 who owns property adjacent to the site who made public comment in support of project and he stated that the project will result in a 12.5% to 25% reduction in the cost to ED7's customers namely the cities of Surprise and Elm Mirage. He did not know whether those cities would in turn pass those savings on to consumers. The project would put 700 megawatts of new dispatchable generation inside the greater Phoenix load
pocket that will not be paid for by APS customers. The conditions were additional to this certificate numbers 22 through 26, went a long way to mitigate the impacts of the plant. And so based on the evidence presented in the four day hearing, the committee found the project to be environmentally compatible. I will bail for any questions. Thank you, chairman. Did the, applicant, I guess, Kenneth Davies, want to say anything? Good morning. Good morning. Thank you, mister chairman. I'd like to thank the committee first time and thank you, to, Chairman Stafford, for the CEC process.
It was actually quite a joy. I had a lot of fun and thank you for your team. Awesome. Thank you. Alright. Any questions from commissioners? Commissioner Marcus Peterson. Yes. Thank you, Chair Myers. We had a number of, you know, obviously, consumer input on this that we read through. I know each of us did, and I just wanted to verify some of the data and maybe have you just repeat it for public. First off, there were a number of letters related to national security due to the proximity to Luke Air Force Base. There was comments about flight safety, emergency response coordination. Can you respond to that, please?
Absolutely. We've been working very closely with Luke Air Force Base. Yesterday morning at this time, we had a meeting with the Community Initiatives team at Luke Air Force Base, plus all of the stakeholders. There was over 30 people in the room and four on the conference call from the DoD. We walked out of that with including everything from interference, RF interference, visual impacts, flight safety, and plume analysis. So we had a very productive conversation and I don't wanna speak directly on behalf of Luke but, I think it's fair to say it went very well and,
you know, we addressed everything that, they had previously raised. Okay. Thank you. Is there anyone from Luke Air Force Base on the call or in the room? No? Okay. Thank you. Also, I I heard chairman Stafford speak about water usage. And, obviously, with the increased interest in data centers to the state of Arizona, we're hearing a lot about water. If if you could repeat this or just clarify, understand the project used versus kind of the agricultural purpose that had been used for the land. I think, chairman Stafford, it's 700 and acre 708 acre feet to now 382 acre feet.
Can you talk about, during operations, how much water usage you expect? Sure. So on the data center side first, historically, data centers have used evaporative cooling and the reason they did that was twenty years ago, you know, when the Googles and the Microsofts of the world were making decisions on they should they use energy or should they use water, it's a trade off, they chose to use more water and less energy and that may have been a good decision in the Pacific Northwest. It's obviously not a good decision here. It takes a long time for these big, you know, companies to change their ways, but you're seeing most of the smaller companies,
the colocation providers, they're all using air cooled chillers. So the company that we've partnered with, Montera, the team is all former Google and Oracle, they will be using air cooled chillers for their facility. So the water usage of the data center is really just limited to the filling of the pipes and then that will, you know, transfer the heat from internal to the data halls out to the air cooled chillers and back. So once the data center is built, it really has effectively no water use besides, you know, traditional domestic potable water,
which will come from EPCOR. The power plant, we anticipate to have evaporative, you know, coolers on the front, and that will be consuming water. We're estimating about 100 to 110 acre feet per year of water. What that will effectively do is that will pre cool the hot air coming in down, you know, 120 down to about 85 degrees to get better efficiency of the use of natural gas and the propane. We have the water rights there, you know, as the Chairman noted, but we are currently currently in discussions with a neighboring brewery,
to use their wastewater. They currently are discharging about a million gallons a day, and that is being used for an agricultural use next door. But as the whole area is transitioning to industrial, next door. But as the whole area is transitioning to industrial, the owner of that land is terminating the farm lease and is developing a rail served industrial yard. So that water has no place to go and we are in discussions with the brewery and would like to be able to utilize that water, effectively reducing our groundwater draw to zero.
That's very interesting. Thank you. Because this is a merchant gas plan, I think my question was, if an interconnection agreement with APS is put in place and a substation built in the future, the application states the project would then be available to provide power to the grid as a peaking facility, and would operate with a capacity factor of no more than 30%. So has have you, as a developer, secured clients who have made firm binding commitments to utilize these data centers? Where are you in that progress? So, we are partnered with, Montero. They are in discussions, and we are part of those with, you know,
most of the large, cloud operators that you can, you know, imagine are here throughout the valley. All the large Fortune 10 companies are all looking at this site. None of them made commitments in part because it's pending on this and the air permit. You know, and we anticipate a an RFS or ready for service of the first data center, you know, in late q two or early Q3 twenty twenty eight and traditionally the data centers lease about twenty four months in advance. So we're entering that lease window now and Montero is in active discussions with those
customers today. So there's been no firm commitment, but we are in discussions, including pricing discussions, with those hyperscalers. And have you begun discussions or any kind of timeline projections with APS at this time? So we do have, a applications into APS, for both, the load, and the GEM. Those are two separate processes. The load application went through Electrical District No. Seven and via SPA for a network integrated transmission service. That application was submitted in July 2024 and as of yesterday, we have our signed facility study agreement back from APS projecting an online date of
the two thirty kV substation of 10/01/2030. We hope to accelerate that, but right now that has been limited by the long lead time equipment, specifically breakers, which are about a four year lead time. So that is the load side. The gen side, we have submitted, a generator interconnection request as part of the 2025 cluster study that went in in May 2025. In discussions with APS, you know, we don't anticipate any problems because we are putting Jen in a load pocket.
So, you know, our studies are showing that there's ample transmission available. We have not heard APS disagree with that at all. It's just in the cluster study. We expect a, system impact study back for the gen side of it in May or June of this year. Okay. Very thorough. Thank you very much. No further questions. Thank you for your time. Commissioner Thompson? Of course, I do. I think it's actually interesting that we're seeing a data center that's foregoing the tax incentive in favor of, of cell generation because I think it's something that is being done in other states.
And, and I think it's something that Arizona is going to need more of if we're going to meet this large load requirement and, help take some of the stress off of the utilities to perform. So my question is really more for APS. I know somebody from APS has got to be here. Victim number one. Can you, thanks for being here today. Can you confirm as the project stands right now, you don't have a power supply agreement or any other sort of of contract,
with the data center. Correct? Yeah. Good morning, chairman Myers, mister Wallen, commissioner Thompson. Yeah. At this point in time, no. APS does not have any sort of, obligation in connection with the load here. We don't, we haven't incurred any costs, and we're not anticipating any infrastructure upgrades paid for by our customers, in connection with this, with with this service. You know, we are working through our FERC transmission service agreements, and, you know, we wanna reinforce that APS is not a backstop to ensure service, in the event the electrical district is not able to meet its load commitments.
But, no, from a retail service perspective, we can confirm that we don't have any obligations. We're not providing generation to ensure service, and, and, we're not building additional infrastructure paid for by customers in order to support this project. In terms of its impact on our balancing area, we are gonna be working through the terms of our FERC transmission service to ensure that APS customers aren't exposed to any additional cost or reliability risk as a result of this process, but that's something that we're working through, in in due time. Okay. Perfect. So really, this is, more of a statement,
I guess, for, you know, for the public when and I said this when we were looking at the Lava Run and also with the Project Blue, ESA, is that we as a commission don't set the ordinances or regulate, the project itself. You know, we you know, for example, this is an electric district, which we don't regulate at all. But we with the data center location, we, you know, we don't look at the projects.
We're kind of oblivious to the project. We're really only looking at the CEC approval process, and any ties into the generation side, which our, our chair of Stafford, you know, chairs the linesiding committee and I think does a tremendous job in that respect. And so I just wanted to remind the public that you may not like this project, but that is a in this situation, I believe it's County Island. So that's really a county issue. It's not a commission issue. We're only looking at the Gentai, in this process.
So, that's all the questions that I have. Thank you. Alright. Thank you. Bless your wallet. Thank you. For I just have a question for APS. I know that you had said that, there's not gonna be any cost passed down to the customer. Can you confirm is Taconot paying for the substation that's going to be built? Yes. Yeah. Good morning. Chairman Myers, vice chair Walden. Yes. We can confirm that the the generation customer and or, yeah, the generation customer, I think, in this case, to the extent there are interconnection costs, those are passed on wholly to the those customers are not covered by any APS
customers. Right. And you're because you you are building a substation. Right? Or that's in the in the documentation that there's gonna be a substation that needs to be built? Yeah. Chair Myers, vice chair Walden. Yeah, our understanding is, yes, eventually that that will, need to happen to the extent there is, as the the applicant laid out to the extent that there is, you know, eventual connection, that takes place, that will need to happen. But, again, consistent with our practices in this space, whether it's a FERC interconnection or a trans distribution level interconnection,
those are paid for by the customers. Those are costs that are passed on to, the, the the wider customer base. So it's the individual applicant that is covering those costs. Alright. Thank you. And, thank you to, chair Stafford and the line siting committee. I was gonna ask you about the factors that played into your approval, but you already already explained that. And, I really appreciated too, the land use public comments slides and it talked about the increase of property values in some of the areas that are already near generation stations with property values increasing
from 92% to a 152. So I really, appreciated that and your consideration. And, thank you to my commissioners who've already asked questions because I was gonna ask questions about about the water and those other pieces. So, there's there's a lot of really good things about this, this project. I like that it's already zoned in a heavy industrial location. The data center is looking at bringing its own power, so that's not gonna be anything that we have to worry about customers paying for or subsidizing that power and, there's a lot of other approvals that have to happen as commissioner Thompson,
commented that we are just approving, like, we approve a CEC or a Genti, we're not approving the actual project but this project still has to get an air permit from ADEQ, construction permits from the county, other other permits that are required for, the state historical preservation office and game and fish and all those things that are outlined in the CEC that show that there will be environmental oversight and compatibility. So I don't have any other questions. Thank you. Alright. Commissioner Lopez. Thank you, chair. So, also, I'll kinda reiterate what some of the other commissioners have said.
They, thank you, chair Stafford and all the other, CEC commissioners. Appreciate you and the thoroughness, of your reporting. Again, as a reminder, as I just said, again, we're here to approve a CEC, not this project in general. That is for, county and other, entities in their sandbox. I also wanna thank the applicant on working with water, reaching out and not having blinders on and looking who would what the the neighboring uses are, how you'd be able to innovatively use. You talked about a a a distillery or brewer that you might be able to
use water from, another ag, neighboring that you really pull water from for generation. Again, these these are the innovative things in Arizona. As you as you mentioned, it's great that you had some good advice on saying Arizona is very different from Washington state. Right? It's water is treated very differently here in the state compared to other areas. And so in in in thinking out of the box and actually, knowing your audience and looking around, again, we I really appreciate that. I think the community will also in the future. I do have a question on that though on regarding, timing of your,
ramp up of the data center. So you you talked about some of the lead times. We're talking about generation, kinda two separate projects here phases wise. Where is the intent for generation versus, building out on the data center, and then where are you looking at ramp up, to consuming the is expected that the data center you're designing out would consume the full 700 megawatts or not? So, long term, the data center is anticipated for a peak load of, 500 or 504 megawatts, approximately, utility power. Now that's gonna be the summer peak on the absolute hottest day.
So why are we putting a 700 megawatt power plant? Because that's nameplate, and on those very hot days, you have approximately a 20 to 30% derate of those turbines. So a 39 megawatt turbine, you know, we're likely we're lucky to squeeze 31 megawatts out of each of those turbines on the very hot day. And then because the power plant is being designed to eliminate the use of diesel generators, we need to build an extra redundancy. So the the data center, normally, a project like this would be putting in 700 megawatts plus of diesels,
and there would be a gas plant built likely somewhere else in the Desert Southwest. We're getting a a two for one here, and because of that, we need to build in that extra redundancy. So on those very hot days, you had a 25 approximately percent derate on those turbines and then we have an n plus two. So we're proposing 18 turbines, but we need 16 turbines on the very hottest day to carry 500 megawatts of load. So that is what it is in the steady state once everything is built out. Now how do we get from here to there? You know, currently looking at the first turbines would be RFS in mid-twenty twenty eight and depending
on how fast we can work with APS, to complete the build out of the substation for the load purposes, it's going to be operated as an islanded facility for approx. One and a half maybe up to two years. During that period the data center will be built out. Current expectations is we'd get to about two thirds of the load by the time the substation would come online and then that last third would be, you know, entirely on the grid. Those generators will be put in over time as the load ramps up. One, that's because we don't want to put them all in upfront and have them do
nothing until it's built, but also because of the limitations on the supply chain for gas turbines these days, those are the reservation slots we were able to secure from Siemens. So our first turbines will be coming off the production line in December 2027 out of Sweden, and we're estimating about six to seven months to transport them and install those. And then it's approximately one turbine every couple months until you get to 18 turbines. Yeah. And as part of the contract with APS, is there,
a point if, again, ramp ups on the data center side and there's excess generation available, is there, any provisions in there for that power to be used for the grid for other stability? So we currently do not have any, you know, contract with APS, but the expectation is is once that, two thirty kV substation is there, you know, we will be providing all of that power back to the grid and likely working with a independent wholesale provider, the likes of a BP Shell, Morgan Stanley, etcetera, who would then buy our excess and essentially serve as that balancing entity.
So we rely on a third party, not on EPS. If we're producing zero and the data center is consuming 300, then this wholesale entity is buying 300 out of the market and serving. If they're consuming 300 and we're producing 600, then we're selling that back, but we would essentially be using an independent wholesale entity to balance that in lieu of leaning on APS. Perfect. Alright. Thank you. That's all the questions I had. Thank you. Alright. Thank you. Now I'd like to go ahead and turn to to public comment. And just a reminder,
we're gonna be pretty strict about the three minute, time limit. So first, we have, Supand Alazeta Alazada. You'll have to correct me on that one. I apologize. Alright. Good morning, everyone. Chair, members of the commission, Sepan D'Alessotta with Arizona Technology Council, 2800 North Central Avenue, Suites 1530. Arizona Technology Council is supportive of this project. We have been supportive of this project since December. I, attended the line setting committee meeting in early December, provided comments and support. We need projects like this.
The West Valley is transforming, as you all know. It is becoming the next great tech hub of Arizona. And here we have, Taconic is coming in and building a data center, and they're bringing their own power. This is a great project, well cited project in an industrial area. And to speak about I know we're looking at project agnosticism, but with data centers, the West Valley is really taking the lead in educating the future workers for data centers. Estrella Mountain Community College as well as Glendale Community College have data center academies.
So our point is always, let's educate them at these community colleges. Let's employ them at project Bacara. So with that, just very simple. We hope you all would be supportive of this CEC. Also, one more thing. We did an interview, late in in early January, and I wanted with ABC c fifteen, and I wanna commend the Tukanic team. We had a couple residents reach out to us about, you know, why are you supporting this project? How can you support this project? I directed those residents to the Tukanic team for to answer their questions and, just, you know,
educate them about the project. And those two residents came back to me and said, thank you for connecting me with the mechanic team because they answered my questions, and I'm no longer opposed to this project. Of course, those residents can't join this meeting at 9AM, but, you know, thank you to them. Thank you to Techanic for being upfront, transparent, and being there for the residents. So with that, thank you. Alright. Thank you. Sandy Barr. Good morning. Good morning, mister chairman, commissioners. I'm Sandy Barr and I'm speaking on behalf of Sierra Club and our thousands of
members and supporters project Bacara. We've outlined the reasons for our recommendations in written comments that we filed on Monday and in earlier comments we made at the siting committee. I'm going to highlight just a few. Project Bacara would build a new 700 megawatt gas fired power plant with 18 combustion turbines in a densely populated residential area of Maricopa County to supply power to a new proposed data center. The project would negatively impact thousands of people in nearby residential neighborhoods in the cities
of Surprise, Glendale, and El Mirage. There are about 650 homes within one mile of the site and about 2,500 homes within 1.5 miles. Many residents who live near the project site raised concerns about its impacts on their siting committee shows that the project would have harmful environmental impacts on the neighboring residents, including air pollution, noise, visual impacts, nighttime light including air pollution, noise, visual impacts, nighttime light pollution, and ground water consumption. For example, air pollution from these units would worsen the already poor air quality in the area.
That air pollution would hurt people's health, contributing to respiratory diseases and causing up to 16,500,000.0 per year in increased health care costs for Arizona residents. Bacara is not environmentally compatible with the proposed site, a 700 megawatt gas plant with 18 turbines, essentially large jet engines, and eighteen seventy two foot high exhaust stacks is not compatible. Unfortunately, the c CEC approved by the siting committee does not protect neighboring residents from the
gas plant's effect. The CEC does not include robust mitigation measures to reduce the impacts on air pollution, noise, light, views, or water use. The CEC calls for the applicant to do community outreach about potential visual mitigation measures like a wall or screening, but doesn't actually require it. The applicant has not demonstrated the need for this merchant plan. The applicant claims the project is needed in order to supply power to a proposed
data center and says it would also eventually sell power to the grid, but APS interconnection studies for the project haven't been completed. The applicant hasn't signed any final power purchase agreements to sell power for the project to a data center customer or to a utility. Once it's connected to the grid, the data center may see that it's cheaper to buy grid power rather than relying on on-site generation. I'm gonna have to ask you to start wrapping it. Yep. I'll wrap up. I'm almost done. So, in order to minimize harmful environmental impacts to communities,
Maricopa County's growing electricity demand, including demand for new data centers, they should be, met with clean, renewable energy paired with battery storage instead of polluting gas generation, and we would encourage you to, deny the CEC. Thank you. Deny the CEC. Thank you. Alright. Thank you. And can I just clarify? Because I know you didn't mean to create confusion, but when you focused on the Gentai, I just wanted to make sure people knew. This isn't about the Gentai, it's about that big gas plant today. Thank you. Yeah.
Thank you. Alright. Next we have Elizabeth Mortensen. Good morning. I'm here as one of the residents closest to this project. Our small community has been there for eighteen years or longer. We have never been able to finish construction expansions of non agricultural buildings or improvements for the uses that result in release of any substance into the air that would impair visibility or otherwise interfere with the operating aircraft, such as steam, dust, or smoke. Direct, aircraft, such as steam, dust, or smoke. Direct or indirect reflective light emissions, electrical emissions that interfere with aircraft and air force communications or navigational aid system or
aircraft navigational equipment. Attraction of bird or waterfowl, attraction of bird or waterfowl, explosive facilities, or similar activities. Every single one of these was stated in the letter from Luke Air Force Base as dated 10/08/2025. Why on earth is this being considered in a place so dangerous to pilots and civilians? We should not have to deal with a power plant only to become a convenient location for a developer with deep pockets from out of town. Even if Luke grants compatibility like they've spoken,
this project is against the state statute. We they are missing the Title five permit from ADEQ. So, why is this up for a vote now? You do not have all the facts. To my knowledge, as of last week, the city of Surprise has still not received the water impact study they have been requesting from Tocanec. This city is the most impacted and has been waiting for this information. Why has this developer not supplied this to them? There are too many valuable questions yet to be answered and we, the citizens, the most effective, only get three minutes to make our case here.
I am not a major landowner who can stand to gain from the Electrical District Number 7, like Mr. Justice or Mr. Beals. I am only a one acre parcel that I built my home and made it my home for eighteen years. At the very least, I ask you to have all the facts before making a decision here today. As our elected officials, I'm hoping you will give your constituents more thought than most of the line sighting committees did. They spent more time going over the verbiage to not help the community than they did in minimizing the things for the community.
You had our vote to get elected and sit here today, and I'm asking that you take time to have all the facts before you make a decision that degrades my quality of life so greatly. Thank you. Alright. Thank you, miss Mortensen. Next, we have Cynthia Gonzales. No Cynthia? Oh, there. Hello, and good morning. My name is Cynthia Gonzales. I have been a resident here in Arizona for more than twenty years, and I come and I speak on behalf of my own family that will be impacted by this project that currently reside in, El Mirage.
So I encourage you all to oppose this project for numerous reasons, many that have been touched upon, previously. Like I've been mentioned already, this project is being proposed to be built in a danger zone that goes against the ARS twenty eight eighty four eighty one and potentially compose a danger to the airspace around the place and our airmen base in Luke Air Force. It also endangers the surrounding residents and communities through the emission of tons of harmful gas.
I hope you all have already seen reports in other states that have data centers and have seen the health effects that it is causing the communities, which includes, a higher risk of negative health effects, such as asthma, cancer, environmental conditions with this with the emission of almost 200 tons of greenhouse gases and consumes millions of our desert desert water. It will increase the cost of living also, as there is currently no contracts made for APS. There are no promises made. So I encourage you all to,
as previously stated, look at all the facts, request all the facts before any decisions are made so you can make an informed decision, and to please consider the people over profit. Thank you. Thank you, miss Gonzales. Next, looks like we have online Carrie Deacon. Yes. Thank you. Go ahead, miss Deacon. Thank you. I'm sorry. My camera is not turning on. There it is. Yes. My name is Carrie Deacon. I live in Surprise, approximately two miles from the proposed site. Project Baccarat plans to store over 2,000,000 gallons of fuel and operate 18 natural gas fired combustion turbine engines in an active
flight path. This isn't just irresponsible. It's a profoundly reckless, dangerous abandonment of common sense. Project Baccarat presents a significant hazard to Luke Air Force Base and the surrounding community. We're talking about student pilots maneuvering $100,000,000 jets in this exact airspace. The Baccarat site will be subjected to around 170 overflights a day. That's 170 daily chances for a catastrophic loss of life and property. Have you considered what could happen if a jet crashes into this power plant?
Can you imagine the size of the explosion and the fires that will spread to neighboring homes and businesses? Think about how many hundreds, possibly thousands, of people who live and work in this area who could be killed or seriously wounded. Think of how many homes could be destroyed. Does the city of Surprise, who would be the likely first responder, even have the resources to handle an inferno of this magnitude? This is not an impossible scenario. Loop jets have crashed in areas dangerously close to the proposed site of this power plant, such as the 2013 crash at Peoria and Bullard.
The risk isn't theoretical. It's documented. There are more appropriate sites for this project that won't risk the lives of our military service members and our families. Approving this application would be a gross failure of your duty to protect public safety. I urge you, protect our community and deny this application. Thank you. Thank you, miss Deacon. Next on the list, I have David Krause, also on line. Yes, good morning. I'm a ten year homeowner in the Rancho Gabriela community in Surprise, which is less than one mile from the proposed site.
And I, along with thousands of other residents, am concerned about the proposed project, Pacara. There is a petition opposing this project that has over 5,700 signatures and counting just over four months. No one wants this project near their home. I would like to remind you of the Maricopa County zoning ordinance, section one zero four. This amended zoning ordinance is designed to promote the public health, peace, safety, comfort, convenience, and general welfare of the citizens of Maricopa County to guide, control, and regulate the future growth and development in order to promote orderly and appropriate use
of land in the entire unincorporated area of said county to protect the character and the stability of the residential, business, and industrial areas of Maricopa County. Allowing Project Bacara at this site would violate zoning ordinance section one zero four. Tekinac has zero completed projects at this point. Everything they present about their project is based on some other similar power plant or similar data center, but not their own up and running facility. Much of their data is not hard data, but estimates and mights and coulds and shoulds.
And their data is constantly changing over time since we were notified about this project. This project would not directly benefit the residents of this area, but yet the residents would be subject to all the negative effects it would bring, including, but not limited to, lower property values, noise, emissions, heat, nighttime lighting pollution, higher utility rates no matter what APS says about that, and possible water restrictions and electrical power outages. This project is unacceptable on all fronts at the site proposed,
and it belongs nowhere near any residential area. So please deny this project's approval. Thank you. Thank you, Mr. Kraus. Next, Gavin Costley. Hi. Good morning. Good morning. I, I've lived there for I built that house, my custom house, nineteen years ago. I'm probably the closest house to the project, so maybe a half mile away. And then I have two other acres in that community that that I was never able to build on because of this statute. So acres down the road were going for about 300,000
an acre and I have two acres that have sat there that I've paid taxes on for fifteen years. I haven't read all the the literature on this project. The one that's the one thing that stood out to me is these tanks, these storage tanks that are gonna be on the site and then I've been to Luke Days, I've been to all these shows over at Luke, sat in my backyard and watched the jets just literally come straight at me in awe right over the orchard. I'm like, oh my gosh that jet's gonna hit me and it was just so cool and
they would just fly straight up. And then Luke is a training base and these jets are gonna fly right over that project and if one of those jets were to hit these propane tanks we'd we'd be incinerated. I mean I don't know why, The thing that stood out to me is I don't know why Luke Air Force Base hasn't already shot this down. The guy right in front of me that owns the other acre, he turned in plans and Luke went denied on his plans. Everything went right through Maricopa County and then Luke had this little say denied.
Why is this project not already been denied? I just don't get it. Why is it not being built out in Tonopah or wherever you know way out there where you know Bill Gates bought this 25,000 acres because of the water out there go out and build it in Tonopah like why does this have to be in the city right next to Luke? I mean Luke needs to step up and shoot this down now and you know we've been there for nineteen years. We've raised our kids there. I have two kids left at home that have just started high school. I was like we we don't want to move.
We love the area. Last night rolling up in the house, this huge owl always every night, and he's the big barn owl. There's about five of them. Just came right above my house, and I was like, me and my daughter just stopped. Stopped. My son had a game in Yuma, had to go pick him up at LA, ALA down the road at 12:50 in the morning because the bus came in late and then that owl just came right in. I was like, that owl is going to be gone and I'm not creating any sob story or anything. That owl, all this stuff, all those are going to be gone. So it's a beautiful area and this project and everybody in this room,
they all know if this was going in your backyard every one of you would be would fight this to the death. This has no no place in a residential area so thank you. Thank you, mister Gosling. Next, we have Roy Dunbar. And, mister Dunbar, if you could clarify, are you speaking on behalf of an organization, or is this for yourself? My name is Roy Dunbar, and I'm part of the Project Bacara Opposition Coalition, we call ourselves. About 1,400 members with about 5,500
signatures now in opposition to this project. So let me start out by declaring our total opposition to the Project Pacara. We are simply stunned that a project of this magnitude is so close to established neighborhoods. There are hundreds of homes within one mile of this project. 200 are located one half mile from the project. Many of these homes are valued over $1,000,000 and are situated on large properties. We do expect our elected officials to seriously consider our concerns. The petitioning opposing this project now has over 5,500
signatures with more being added every day, and we have a goal of reaching 10,000 signatures before the final vote by the County Board of Supervisors. We will remember how our elected officials did or did not fulfill the obligation in our view to represent the will of the people and we will vote accordingly. The very detrimental impacts to nearby neighborhoods was barely addressed during the committee hearings. This body simply cannot just ignore the environmental impacts and destruction to our way of life.
The data centers themselves will be a major source of inescapable noise for at least a mile or more. This was not addressed by the committee. The approval process cannot be just the power plant. The data centers must undergo a review. While this commission may say you only have jurisdiction over the power plant, yet project Picara is both a power plant and a data center. It is the business plan of Taconic. They have touted its innovative technology and praised the notion of colocation. The two are inseparable.
We'd like to offer some suggestions on issues that need to be more fully considered by this commission before the final vote. Project Picara still has significant approvals to go. This is a huge fight, and we intend to see that it will intensify. We suggest that to approve the project at this time is unnecessary and may even be counterproductive because of its prejudicial impact on the other decision making agencies who have yet to decide. I hate to say this, but the transcripts of the hearings which I spent hours pouring over demonstrate extreme bias
in our opinion in favor of approval, especially the chairman and member Kreider comments who referred to us as lunatics. Only member Little asked questions that showed concern for the impact in neighborhoods. We also object to the weak and ineffective poll public notification process. Mister Dunbar, thirty seconds. Please. Three minutes does not cut it. I I'm asking for your indulgence. I'll maybe take another minute and a half. Like I said at the beginning, we're gonna stick to a three strict three minute time period so we can get through all of them. Thank you. I don't see how you can do this. They've had four days to present their case.
We get three minutes. We tried to become a party to the proceedings. That was denied us. Alright? So I ask your indulgence to allow me to finish. Yes or no? No. Three minutes. Thank you. Thank you, sir. Next, we have Hillary Weber. This is outrageous, and it shouldn't be allowed. You need to hear the people's voice. Good morning. I'm Hillary Weber. I'm an ASU research assistant and student of public health and sustainable urban development as well as a mother that lives in Surprise. I have three children, eight and under,
one of which has type one diabetes, a horrible autoimmune disease, which actually, we spent the weekend in the hospital because she got a virus, and that put her into DKA. So her health is fragile, and, I'm just coming to you as a mother, as a, woman in STEM, I suppose, someone who knows the future, the actual future of sustainable development. And I'm asking that you please deny Tikhonik. Tocanec's fact sheet claims that this project is compatible with Fluke Air Force Base that is dangerously misleading. As my colleagues have already stated,
it is against AR seven twenty eight dash eight four one, which makes it illegal. As much as Techenic likes to say, they are not a utility. They are an independent power provider. We submitted a letter to the ACC from the department of defense that explicitly said that, they are utility like, and that's still illegal. And we only have their word, because Luke Air Force Base is not here to give us their actual response. They're they are saying only that they're compatible. Luke Air Force Base has not said that in any letter or written communication.
And, again, they're not here to say that it is compatible. We're just supposed to believe this company that has bottomless pockets, who is more than happy to come and destroy our environment, destroy the health of our community, and directly harm our kids and our elderly population as well as everyone else who's immunocompromised. And I just want to ask as well, who's responsible for the direct harm that mechanic will impose on our community? Who's responsible for paying the medical bills? Who's responsible for cleaning the air? Which, by the way,
Maricopa County is about to be classified. As a, serious nonattainment area, which means that any, major new source would have to offset 1.5 tons of every ton of carbon dioxide they emit. Is is trying desperately to not be classified as a major news source so they don't have to help us clean our already horrible air. And I know that no one on the ACC lives in Maricopa County. I realize that. But I just ask you as a parent, as a person that lives in this great state,
can you just imagine if you did live in Maricopa County? Can you please imagine if you did live less than a mile away from the largest power plant in North America? That's the size of four Alcatraz Islands put together. Can you please imagine how you would feel if your family and your livelihood and everything you've put your time and energy into was at risk? I you know, if you're okay with that, I would ask you to buy my home for me. Let us escape to somewhere safe because they are directly they are directly going to harm us,
and it is your job to protect us from that harm. Thank you. Thank you, miss Weber. Looks like, Cesar Coral Corral? Good morning, chairman Myers. Commissioners, thank you for the opportunity to speak today. My name is Cesar Corral, and I work closely with Arizona's skilled trades and energy workforce. I'm here in strong support of project Baccarat. For us in the trades, projects projects like Baccarat are not just energy facilities. They are paychecks, health care, pensions, and careers that allow Arizona families to stay rooted here. They create real middle class careers for electricians,
operators, laborers, iron workers, and apprentices like me who are building their futures in this state. Arizona's growth is undeniable. We're seeing new manufacturing, new housing, new infrastructure, and major employers investing here. That growth requires reliable power. Project Backrush strengthens our grid while keeping energy generation local, built by us, the Arizona workers. What excites me most is the workforce pipeline. These projects give young apprentices like me hands on experience in utility scale, renewable energy, and storage. That means we're not just building a project.
We're building the next generation of skilled trades and professionals. When we talk about reliability, affordability, and long term planning, labor is a part of that equation. And, unfortunately, we're never in that equation enough. A strong grid requires a strong workforce. Project Background supports that. I respectfully urge this committee to support this project for grid stability, for economic growth, and for the working men and women like me who power Arizona every day. Thank you. Thank you, mister Corral. Alright. And I think we have one more. Lisa Everett? Okay. We'll we'll ask for others when we're done.
Thank you for allowing me to speak today. This committee is not here judging whether or not Project Bacara is good or bad for this location. This committee is here making sure that everything proposed applies with your needs as a committee. The reality is a lot of people are upset about this, and I understand. Progress is kind of scary. It's the unknown. And I did not interrupt you. And I just wanna tell you a little bit about my morning.
This morning, I was watching the news and there was a brief story, didn't give a lot of information, usual, so I had to use AI to get more information. To arrive here I used my GPS. And later today I have a doctor's appointment and my doctor is able to see what other physicians that I see have written about my health so that there's not any conflicting treatments. So the reality is all of that takes data and data centers will provide that.
I want to say hats off to you for coming up with a plan to provide power not only for your facility but for the citizens of the West Valley because I have been told more than once that brownouts could eventually come if we don't come up with more solutions for power. And the fact that you're looking at reclaimed water is amazing because we live in a desert. So I just want to say thank you for your innovation.
Thank you for allowing me to use GPS. Thank you for allowing me to speak today. I'm in favor of this project. Data centers have got to quit being a bad word in The United States because future wars will be fought with them. Thank you. Thank you, miss Everett. And, I I will note that we we would like to maintain some decorum in here, so please don't interrupt other speakers. And also, I was handed a list that apparently my online list does not jive with. So if I don't get to you, I will call for extras at the end. The next one I have is April Estrada.
And on this list, I don't know if it's online or in person. No April? Alright. We'll come back to that. Megan Hamlin? Not seeing Megan online either. Kelly Geary? Maybe that's why it's not on my online system. Okay. Elise Eiman, Kaylee Steimer, Jasmine Umalo, Jennifer Mayer, Jason Roche. Alright. Well, if any of those, are here, let me know. Otherwise, I'll ask for other public comments. Go ahead, ma'am. Thank you. Hello. My name is Holly Talmachoff. My husband, Jack, and I live in the one acre community closest to Project Baccarat.
We have four young children, ages nine to two. And while we've only lived in the neighborhood for two years, our roots in the West Valley run generations deep. Most people recognize the Tomichoff name from Tomichoff Farms, but our family's history extends far beyond that. John F. Long, the developer of Maryville, named the community after his wife, Mary Tomichoff. My late grandfather served as a chief at Loop River First Base and moved his family to Maryville where my parents met. One of my mother's first jobs after high school was working as an accounting specialist for John f Long before dedicating the last thirty seven years of her career to
the Maryville School District. Our family of six is built on history, service, and deep Arizona roots, and we're proud of our community that shaped us, and we're fully invested in preserving it. We moved intentionally leaving a suburban neighborhood for a rural one so our children could experience a childhood like the one our families knew. We pull our water from a well, we grow our vegetables, harvest fruit from our small orchard, and raise chickens for eggs and meat. Every day, our children climb trees, race across the grass, check on our neighbor's cattle, and catch toads at sunset. This is the life we hoped for, a childhood connected to land,
community, and simplicity. Project Baccarat planned just just a half mile from our home is threatening all of this. Every night at dinner, our children pray for this project to be moved so they don't have to leave the home they love, and it's heartbreaking to watch them worry about something no child should have to worry about. It's painful to see Arizona push out agriculture and families in favor of massive industrial developments, prioritizing profit over the people who have lived, worked, and built their lives here for generations. Tacking off the company behind this project has shown us exactly how little they value us. They've trespassed on private property using our neighborhood road to gather photos and sound studies,
only use that information against us in their presentations. They have refused to construct a sound barrier on the north side of the property where my home is and instead plan to expand and acquire the only existing barrier now, the Justice Brother Orchard trees. Taconoc continuously changes their estimated water usage site plans and emission outputs, making it impossible for us to feel informed on the project. I was personally singled out by Taconoc CEO Kenneth Davies as one of three neighbors who, in his words, wouldn't agree on what two plus two is if placed in a room for six
months. What he deliberately failed to disclose is that the other two neighbors who previously shared my concerns are now in negotiations to profit significantly from land leases and sales to Takadoc. I was also approached by their project manager, Sarah Justice, and offered donation to improve a local park where my children play, an offer that makes clear they understand the harm the project to my family's health and safety and are attempting to soften exposure rather than address the impact. The company is not here for the community. They're not here for our neighbors. They're here to maximize their profits at our expense,
and they will buy off or buy out anyone who stands in their way. If you could please vote no, I'd appreciate it. Thank you. Thank you. Alright. Is there anybody else that we might have missed? You've already had your three. I'm looking for anybody that hasn't. Nope. Thanks. Sorry. Alright. So at this point, are there any other follow on questions from commissioners? Mister Johnson? Richard? I don't have any questions. I just wanna point out that that Luke Air Force Base, still has their approval to give, and the Department of Defense could stop the project if they wanted to.
Is that correct? Absolutely. You know, regardless of regardless of what happens here, if Luke, you know, comes back with a negative determination, we cannot move forward. Alright. Thank you. K. Mister Lopez? No other questions. Alright. Nothing for me. You've had your time. At this point Point point of order, miss mister chair. Yes. If I may. Legal. We sir, we have to follow certain decorum here, and you're out of order. And you were given a chance to speak in the allotted time that everybody else had. So if you have supplemental comments you wanna write and put it into the docket,
put it into the record, I'm sure the commissioners will be happy at some point to read it. You have made your point in in the time allotted, but you're not allowed to disrupt the proceedings. Okay? And and I would go ahead and say that if anybody wanted to write comments and add them to the docket, you're free to do that on our website. You can also email them to all of us individually if you'd like, and and we will make sure they end up in the docket for you. So, alright. Vice chair Walden, will you please move sample order one? I I move item did you say one? Sample order number one.
Correct? Item 17. 17 for a vote. Alright. Are we good are we good for votes? For both. Just happy roll call? Okay. Caroline, please please call the roll. Commissioner Lopez? Yes. Commissioner Thompson? Yes. Commissioner Marquez Peterson? Aye. Vice chair Walden? Aye. Chair Myers? And I will, explain my vote by saying that as a reminder to everybody, our job today is not to approve or deny the project itself. There's a lot of other steps that have to go through, for zoning and things of that nature. Our job today is to make sure the electric generation meets the CEC requirements as
outlined in the statute. And with that, I believe they do, so I will be voting yes. And with that, item 17 passes five to zero. And let's go ahead and go back to the consent agenda, and go ahead and do that. It looks like we're gonna have to do a voice vote on that as well. I move a consent agenda with hearing amendment number one for a vote. Can we do that all in one shot or do we need to do separately? Okay. In that case, Carolyn, go ahead and please call the roll on the consent agenda with the hearing amendment. Commissioner Lopez. Aye. Commissioner Thompson.
Aye. Commissioner Marquez Peterson. Aye. Vice chair Walden. Aye. Chair Myers. Aye. And with that, the consent agenda and hearing item one passes. Next to, Vice Chair Baldwin, item 18. Yes. I move item number 18, Cypress Creek Renewables for discussion. Thank you. And as soon as the room reconfigures, we will dive into this one. Alright. First up, we have staff. Please go ahead. Good morning, chairman, vice chairman, and commissioners. Adam Beckerman on behalf of utilities utilities division and staff.
Agenda item item 18 is the application of Cypress Creek Renewals, LLC for a certificate of environmental capability or CEC authorizing the cactus flower solar solar genotype project, which includes the construction of a new approximately nine mile long, two thirty kilovolt transmission line within Pinal County. The line signing committee held evidentiary hearing on 12/08/2025 and 12/09/2025 to receive evidence and deliberate on the application. Subsequently, the committee voted nine to zero to approve the CEC. Staff is available for any questions you may have. Thank you. Alright. Thank you. One exciting chair,
mister Safford. I'm available for any questions. Alright. Thank you, sir. Applicant, Bert. Thank you, Chairman Myers, and commissioners. Bert Atkin on behalf of the applicant, Cypress Creek Renewables. Sitting next to me, I have Soheini Hatharimani. She is the project manager. We also have available on the Webex, Danny Sedano, who manages, grid integration for Cypress Creek Renewables, and we are also here and available to answer any questions. I'm excited to bring this project before you. As noted, it received unanimous approval from the line sighting committee in December.
It has county entitlements and plates. It is far along in the development process, had a robust public engagement process. I think the likes of which this commission has advocated for, I think it's really quite frankly the gold standard on public outreach, with letters of support from multiple varied interests including the mayor of Eloy and public comments at the hearing itself. So with that, happy to answer any questions you might have. Alright. Thanks, sir. Commissioner, questions. Yes. Thank you, mister Myers. Thank you for,
your comments on the robust public hearing. I think that is vitally important. I understand that though that two studies have identified thermal loading concerns. If I could ask the applicant how you're handling those issues, please. Thank you, Chairman Myers. Commissioner Marquez Peterson, yes. So as you know, this goes through the system impact study process and we have, this project at the time of hearing, and still is the case, had done two cluster studies, a phase one and a phase two study. The nature of the South Of Phoenix cluster study is that it studies a number
of projects. I believe there were seven projects in total studied in that cluster along with five additional studies that predated the cluster. So those studies assume that all of those preexisting cluster, excuse me, preexisting queue projects as well as all of the projects in the cluster study will come online. So you have somewhat artificial, if you will, assumptions about the nature of the, of what infrastructure is going to go on in this area. But that's how the process has to start.
So that's phase one, and then it goes through this project went through a phase two, all the projects in that cluster went through phase two because one of the projects had changed its request for service. So it had gone from a network resource to an energy resource. So that would trigger to phase two. We have been told that there is now going to be a phase three, which means additional projects in the study have they're withdrawn or now seeking energy resource
interconnection. You know, we don't have those details, but those studies are ongoing. The way I analogize it in my mind, my layperson mind is you start with these studies, it's almost like a funnel where you have to look at all of these projects that are seeking interconnections, in this case, South Of Phoenix, and you go through various stages of of study. And at each stage, certain projects are going to fall out or change their interconnection request, and then so you move down the line. Now we're in phase three. We'll see the results.
We'll see what the network upgrades are required as a result of the phase three or recommended, I should say, as a result of the phase three study. After the phase three study we then go through a facility study which will lead to a large generator interconnection agreement. That large generator interconnection agreement will identify the specific upgrades that this project must pay for, and implement in order to interconnect to the regional grid. One thing I wanted to highlight I think is worth noting. So I guess the short answer is we don't yet know what the network upgrades
for this project are. Those are still being studied. One thing I do wanna highlight is that this project is requesting interconnection as a network resource and I think that's good for Arizona. What that means is they are not asking for non firm transmission capacity, they are seeking firm transmission capacity, and they are willing to pay for it. So whatever these federally required studies require, you know, the end result will be if this applicant wants to connect at a network resource, it's going to have to pay its fair share of that of those,
upgrades. And why is that good for Arizona? This commission knows we have a desperate need for new infrastructure and significant upgrades to the regional grid, and there's multiple ways that that can be paid for. It can be paid through federal grants, it can be paid for by APS seeking approval and seeking to rate base that, or the case you have before you, which is a third party independent power producer who's saying we're gonna pay for those upgrades in order to connect to get the service that we need. So in my mind that's the most efficient and best for Arizona is to have
that independent power producer pay for those upgrades. So we're in the process. We'll see what those look like, but I think my message is you can take comfort that that's a federally regulated process that will ultimately identify what upgrades are specifically necessary in order for this project to interconnect in a reliable and safe manner, and and they'll have to pay for it in order to to do so. Thank you, mister Aiken. And I wanted to ask if APS could join us up here and comment on this since it is connecting via an APS transmission line.
And I can repeat the question if you need. Chairman Myers, vice chair Walden, commissioner Marcus Peterson, yes. Would you mind repeating the question? I can tell by your face. I thought I better repeat. No problem. So I I commented on the two studies that identified thermal loading concerns, and mister Aiken was explaining from the perspective of the developer, but wondered if you could also speak to that since it is connecting via an APS transmission line via new switcher. Yeah. Chairman Myers, vice chair Walden, commissioner Marcus Peterson, I as I stand here today,
I don't have any specific information on that. We are happy to follow-up with additional information if if that would be helpful. I can tell you that from the standpoint of all of our studies and processes that we follow for the purposes of, interconnecting a project like this. You know, there's a uniform process where we evaluate individual generation as it relates to the the bulk transmission system and any sorts of issues that are required to ensure safety and reliability, we communicate that to a project applicant through the study process and they are expected
to provide transmission upgrades in order to mitigate any of those impacts. I have every expectation that that was the process that we we followed here though, again, I don't have anything specific, as to this project with me today. But in general, my understanding would be that those issues are addressed as part of our interconnection process. Okay. Thank you. No further questions. Alright. Mister Thompson? No questions. Thank you. Vice chair Walden. So, thank you, commissioner Marquez Peterson, for your questions on the thermal loading concerns.
So, I don't have any issues with the CEC, but I I do wanna point out because there is, you know, there's different groups that fight over what energy sources we should be using, and I see the role as as tech agnostic. The federal energy regulatory commission does require non discriminatory open access to be granted to any type of generation that seeks to interconnect to the transmission grid and these requirements were set out in 1996 under order eight eight eight for customers and extended to all generators in order 2003.
So as long as the interconnection does not cause reliability issues we must allow them to to interconnect. So I appreciate you addressing that. I I guess I I probably do have a question because we didn't hear from staff about the reliability to, does Brit or Ronel want to weigh in on that? Chair, vice chair, commissioners, Renell Paladino for staff. I'll just reiterate that we agree with what has been said that the concerns, appeared in the study and that they are being addressed as they move through the study process, so we didn't have any additional concerns.
Thank you. No further questions. Thank you. Miss Lopez? No questions. Alright. Public comment. Again, three minute time limit reminder. Looks like we have two. Sepand Alizada again. Welcome back. Good morning again. Supan Dallas out of Arizona Technology Council, 2800 North Central Avenue, Suite 1530. We are in support of this project. As you all know, Arizona Technology Council believes that energy is going to fuel the next growth the next stage of economic growth in Arizona. And Cypress Creek Renewables is a nationally regarded energy developer,
that has a fantastic track record of creating very, very, transformational projects. This project is well cited in an area of Pinal County, you know, away away from, uses that may not be compatible. They've been Cypress Creek Renewables has done a great job in engaging the county with public outreach. And as I said before, and I'll say this again, we need energy in all forms and fashion to continue our economic renaissance, and this project will ensure that that happens. Thank you again. Thank you, sir. And Cesar Querrell again.
Welcome back, Cesar. Thank you for the welcome back there. Chairman Myers, commissioners of the board, thank you for your time today. My name is Cesar Corral. I'm here in strong support of Project Cactus Flower by Cypress Creek Renewables. Arizona workers are ready to build the infrastructure of the future, and project cactus flower represents exactly that opportunity. This project brings high quality construction jobs, strengthens our energy capacity, and positions Arizona as a leader in responsible energy development. For labor, this is about stability. It's about keeping skilled trades people working close to home instead of chasing projects out
of state. It's about giving apprentices real world training on advanced solar and storage systems. And it's about ensuring that our state grows. The jobs tied to that growth stay right here. We often talk about economic development in big terms, investment, megawatts, capacity, but behind every one of those numbers is a worker, a worker who is putting in long hours in the Arizona heat, a worker who is raising a family, a worker who depends on steady projects like cactus flower to provide stability and dignity through skilled work. These projects do more than generate power. They generate opportunity for us.
Commissioners, supporting project project cactus Flower means supporting grid resilience, long term energy planning, and the hardworking men and women who build Arizona's infrastructure. Once again, I respectfully ask for your support. Thank you. Thank you, Cesar. Alright. Any response from our commissioners to the public comment? No? Alright. With that, vice chair Walden, can you please move it? Yes. I move item number 18 for a vote. Alright. And I'm guessing roll call. Alright. Carolyn, please call. Commissioner Lopez? Aye. Commissioner Thompson?
Aye. Commissioner Marquez Peterson? Aye. Vice chair Walden. Aye. Chair Myers. Aye. And with a vote of five to zero, that item passes. And, item number 19, has been pulled at the request of a couple of commissioners, so that one won't be heard until next month. Vice Chair Wallen. Item 20. Actually, I'm hearing we need a break, so let's take a, what, maybe a five, seven minute break? Thank you. Maybe a little longer. Ten ten minutes. I'm fine with that. Whenever we come back. Alright. Everybody's ready, we'll go ahead and pick this back up. A prescheduled dinner.
Alright. Vice chair Walden, I think we left off with you. I move item number 20 to discussion. Thank you. First Judge Nichols. Chair Myers, Vice Chair Walden, commissioners, good morning. Chris Nichols on behalf of the hearing division. Item 20 pertains to the rate application of Monte Vista Water Company LLC. Monte Vista is a class e water utility serving approximately 32 customers in the town of Douglas, Arizona. It is owned and managed by a group of family members who inherited it. Monte Vista operates a single water system consisting of one well,
two storage tanks, one pressure tank, two booster pumps, and 330 linear feet of water main, and 44 meters. Staff concluded that the company has sufficient production capacity, but recommended that the company begin looking into increasing its storage capacity. Staff estimated that Monte Vista experienced water loss of over 30% during the test year ending 12/31/2024. The company attributed the high level of water loss to aging customer meters. Staff found that the company's test year water loss is unacceptable and recommended that the
company add a master meter to its well and file a water loss report within one year of adding the master meter. If the report indicates that the water loss remains above 10%, staff recommends that the company file a detailed water loss reduction plan within eighteen months aimed at reducing water loss to below 10%. Staff concluded that Monte Vista is in is in compliance with ADEQ, but is not in compliance with ADWR because it does not have a system water plan or a current annual report on file. Monte Vista is in compliance with all trackable commission requirements.
However, it does not have an approved curtailment tariff, cross connection, backflow prevention tariff, or emergency water augment augmentation tariff on file with the commission. In its staff report, staff noted that Monte Vista had not paid its 2024 sales taxes. Staff recommended that the company become current on its sales tax and file documentation showing that it has done so within twenty four months. The staff report also noted ongoing bank account issues with fraudulent activity on one of the company's account. During the hearing, miss Holyfield, who represented the company, testified that there were approximately eight unauthorized charges on one of its accounts during 2023
and early twenty twenty four. She testified that the account was closed in October 22 October 2024. Staff recommended that the company open a new bank account within thirty days of a decision in this matter for the use of all of the company's revenues and expenses. Monte Vista's current rates were authorized by the commission in 1974. In March 2019 the commission authorized an emergency surcharge for the purpose of servicing a WIFA loan. Instead of charging its commission authorized rates, Monte Vista has been charging a flat rate of $15 per customer per month along
with the financing surcharge, part of which expired in 2024. Monte Vista is seeking a rate increase in this case to ensure adequate revenue to maintain its arsenic removal water treatment plant and because its consent order with ADEQ requires it to file a rate case with the commission. The company proposed a fair value rate base of $17,589 and a revenue requirement of $15,176. Staff recommends a revenue requirement of $19,000 which based on staff's recommended operating expenses would result in operating income of $16.63
dollars a rate of return of 2.28% on staff's recommended fair value rate base of $73,066 and an operating margin of 8.75%. Staff's recommended revenue requirement would also yield a debt service coverage rate ratio of 3.16 which meets the minimum required DSC of 1.2 for the company's WIFA loan. Monte Vista's proposed rate design includes a monthly usage charge that increases by meter size and includes 6,000 gallons combined with a three tier commodity charge.
The company's proposed rate design would increase the monthly bill of a residential customer using a fiveeight by threefour inches meter with a median usage of 5,565 gallons by $16 or a 106.67% compared to the $15 flat fee currently being used by the company. Staff's recommended rate design does not include any gallons in the monthly usage charge and modifies the company's proposed breakover points and commodity rates to comply with the Commission's small water policy. Staff's recommended rate design would increase the monthly bill of a residential customer with median
usage by $27.46 or a 183.07% compared to the $15 flat fee currently in use. Monte Vista also proposed significant changes to its miscellaneous service charges as well as its service line and meter installation charges. Staff recommended adoption of the company's proposed service line and meter installation charges, but proposed certain changes to the, proposed miscellaneous service charges. Monte Vista also proposed a $13.30 per month and increasing by meter size emergency repair and replacement fund surcharge to fund
arsenic and media replacement. Staff recommends instead an ERRF or emergency repair and replacement fund surcharge of of $13.98 per month per month, which is designed to include funding not only for the arsenic media replacement, but also for a master meter for the company as well. Staff agrees that the should remain in place until further order of the Commission. Staff also recommends that the master meter be installed as soon as the surcharge mechanism has collected sufficient funds, that the e r r f monies be deposited into a separate interest bearing account
to be used only for the master meter and arsenic media replacement, and that the company be required to file an annual report specifying the amount of ERF funds collected and any use thereof. In addition to the recommendations already mentioned, staff recommended that that the company docket a schedule of its approved rates and charges within thirty days, cease charging the WIFFA surcharge as soon as its rates become effective, file a rate application within five years using a test year acceptable to staff, implement a succession plan, file a curtailment, tariff and cross connection backflow prevention tariff within sixty days,
and an emergency water augmentation augmentation tariff within ninety days, use the depreciation rates listed in table c one of staff's engineering report, and implement a or use an annual water testing expense of $1,270 going forward. The recommended opinion and order adopt staff's recommended rate design, but modifies the commodity rates and certain breakover points to eliminate crossovers. For a typical residential customer with a median consumption of 5,565 gallons per month, the company proposed rates would result in a dollar a monthly bill increase of $16
Staff's recommended rates would result in a monthly bill increase of $27.46 and the rue's adopted rates would result in a monthly bill increase of $28.91. The rue also adapts adopts staff's recommended miscellaneous service charges, service line and meter installation charges, and e r r f terms and recommendations. The rue also adopts the remainder of staff's recommendations. As of today's date, no exceptions rue and no public comments have been submitted. And I'm available for any questions you may have.
Alright. Thank you. Thank you, Judge. Staff. Good morning, mister chair, vice chair, commissioners. Britton Baxter for utilities division staff. Staff supports the rue as written and is available for any questions. Alright. Thank you. Do we have anybody from the company? It looks like maybe Linda's online. Iron level one. Would you like to say anything with regards to this item? No. Alright. Well, thank you. Commissioner questions. Commissioner Morquis Peterson. Yes. I wanna thank mister miss Hollyfield for being on the call. I think it's important no matter the size utility,
that we have ownership and those accountable, participating. So appreciate you being on on the line. And just wanted to ask, are you one of the members of the family that inherited the business? Yes. I am. Okay. Great. Thank you. Thank you to the small water ombudsman office for for leading on this. This is a challenging rate case. I mean, this we're we're in a position. We don't have a lot of options. The Roo, as the administrative law judge, defined, and thank you for your work on this, shows a $28, I think, a 91¢ increase or a 192% increase, kind of as the bottom line, which seems shocking.
But I think what's more shocking is that we're at this position to begin with. We have a small water utility that didn't comply with the rates that the commission set in 2019 before any of us. Well, I guess I might have been here, but the rest of us weren't here, and just charged a flat rate. So there is I I started trying to type and capture the issues, and there's many issues. So I don't know if miss Hollyfield or even our small water ombudsman represented by mister Baxter wants to speak to kinda what brought us to this point,
but it's such a small utility with 32 customers. I think the bottom line without me asking this long line of questions is is the family considering miss Hollyfield in selling this business, because I understand that there is a lack of expertise, that man has left that was operating the business, and we've got a lot of different issues of compliance that need to be taken care of. So is what is the plan by the family? The the family isn't isn't thinking about selling the water company. If we sold anything, it would be the whole mobile home park together,
not just the water company. I see. Okay. I've always been of an opinion just as one of the commissioners here that this is a very tough space for small water utility operators to operate in, highly regulated. We're missing annual reports and tariffs that are in place and lack of compliance with ADWR and property taxes that are due, financial disarray, and on and on. So, I would encourage you to work as closely as you can with the small water ombudsman even after this vote occurs and we move forward because that's not the end
of all these various issues. There's so much to comply with. I think the family really needs to look, even in the short term, what's the future of the continued operation of this small water utility? And wanted to ask if, Brit, you wanted to speak to kind of the process. This is probably one of the smallest utilities we've engaged with with only 32 customers. Mister chair, vice chair, commissioners, commissioner Marquez Peterson, if you're asking me about the process post decision, I would just tell miss Hollyfield it was similar to the process we engaged in as we were preparing the application,
that I'm standing by and happy to help with whatever the family decides to do moving forward. If you want me to provide maybe some additional color on what I believe happened, I'd be happy to do so, and miss Hollyfield can either confirm or deny what I believe happened. But if that's what you'd like me so I apologize if I get a little long winded, but 1974 was a long time ago. It was the original CCNN decision. That's the rates that were in effect. In 2019, they had arsenic issue where they worked with DEQ and the small drinking water system
grant program to install arsenic treatment. It didn't cover the full cost of the treatment, so they had to come to the commission with an emergency financing request, which the commission approved. That's the surcharge judge Nichols mentioned in his introduction. So they started collecting the surcharge. They went to WIFA for the the additional financing they needed. WIFA approved it. Based off the documentation I was provided, what I believe happened is at the time with, they do annually calculations on the debt service coverage ratio for the regulated utilities that
they've provided funding to. I believe The staff did that and probably told miss Holyfield that her rates are insufficient to meet the debt covenants. So the $15 that I saw was a fax that miss Holyfield had sent to with a staff saying here's what we're charging. So I believe she maybe just misinterpreted who she was talking to and what the exact nature of the process was. So I don't believe there was any ill intent on miss Holyfield's part. I explained to her prior to, and I appreciate her being here as well.
I explained to her that the commission might not be happy, but they're not going to be mean. So hopefully, the commissioners aren't mean to her. That's She recognizes that there's some issues with the system and that there's some help to get her right with everything she needs to do. So hopefully, she's listening and understanding what the commission has to say, what the decision directs her and her family to do, and is prepared to get the company set up in a better position going forward.
And I believe DeRue help helps her do that. So, hopefully, that helps provide what I know about the the particulars of the system. Yeah. And I I did wanna point out also just as a point of information that for my fellow commissioners, I think we have the only small water ombudsman office in the nation. So I think it's very important that we provide these kind of services, and just wanted to to point that out. So I I'm not gonna ask my long list of questions, miss Holyfield. I think that, we need to just get this right. And please, after this is done today, work with mister Baxter and his team to to figure this out because it it
can't be losing money. It's gotta have the water quality. You've gotta be fully in compliance, reporting, and so on. So please contact mister Baxter tomorrow, and no further questions. Okay. I will do that. Thank you. Mister Thompson. Yes. I I guess this is for either, either the ALJ or staff. Can you confirm that the unauthorized charges were not, being recovered by the ratepayers? Mister chair Sorry, mister chair, vice chair, commissioners, commissioner Thompson. I just heard miss Holyfield say they were not. And I I agree with that just based on the fact that the rates were
from 1974 with the slight modification by mistake in 2019, 2020. So I don't believe that any fraudulent activity was recovered from rate payers. Okay. And for the judge, are there any triggers, for the for the, ERRF that that would end the surcharge once the, meter and the arsenic treatment cost are recovered, or are we just waiting until they come back for another rate case in five years to see if they've recovered that amount? What I'm getting is I I wanna make sure that that the company is not
over collecting but not under collecting either. And so, I guess I'm getting at is is there something that would cause the that would trigger the stop of recovering the once the funds have been recovered. Chair Myers, vice chair Walden, commissioners, commissioner Thompson, I don't believe there is a trigger that would terminate, the the company's authorization to, charge the e r r f. My understanding is that that's, the arsenic media replacement is going to be an ongoing expense and that the company's,
base rates by themselves are not sufficient to be able to cover that. And I I believe staff took the position that, that it would be necessary for the e r f surcharge to continue in perpetuity, hopefully not too long but at least until the company's next rate case because it does need those funds to be able to replace that arsenic media. But, you know, if mister Baxter has anything to add or if I'm if I'm mistaken in any aspect, I'd be interested to hear. I believe that our city media needs to be changed every two years.
Mister chair, vice chair, commissioners, commissioner Thompson, since you're looking at me, I agree with what judge Nichols said. I also agree with what miss Holyfield said. It's my understanding that the media needs to be replaced every two to three years. That particular component of the request, not directly, but indirectly came from DEQ. So they've been helping her with small drinking water system grant funds to replace the media. And it's my under my words, my understanding that they essentially said they need to use those funds to help other trouble systems file a rate case and get rate relief from the commission.
So we believe that this is an appropriate mechanism both to kind of kind of mitigate rate shock rather than building that into base rates, but it also establishes a mechanism that they'll be able to replace that media on a going forward basis until we get the company filing rate cases on a consistent case cadence to be able to recover that. Because even if they file every five years and they're having to replace it every two years, rates might not be sufficient to cover that media replacement. So it's kind of a a joint effort to make sure they're in compliance with
DEQ providing safe water, but they have a financial mechanism to be able to do so. Thank you. Perfect. And for the company, can you tell me what the status of your 2024 sales tax bill is? Has that been paid off? I I'm sorry. I did not understand what you said. For your 2024 sales tax bill, has that been paid? Okay. I have contacted the the sale or the Department of Revenue, and they told me that I need to wait till aft I told them that
we had a case coming up and gave them the information of when. And they said for me to call in after the hearing and then that they would look at the file or the case. I don't know exactly what to call it. And then we could start we could pay what we owe. I called in after we had the hearing originally, and that's what they told me. K. Thank you, ma'am. And then, for the surcharge, do you have,
an expected timeline to complete the, master meter install? No. I don't. As of right now, I do not as far as as the master meter. I don't want the timeline that we're gonna have to have for that. Brad, do you happen to know? Mister chair, vice chair, commissioners, commissioner Thompson, sorry. I missed the question. So I'll try to answer. And if I was off base, please correct me, sir. But it's just the timing of timing of the meter. I believe they're gonna have to build up enough revenue in the ERF bank account to be able to buy the meter and then get it lined up for installation.
So it might be three months or so before they have enough funds to cover it. So the e the e r r f surcharge will go towards both the arsenic treatment and the master meter. Is there a priority of which one gets completed first? And you sorta I mean, you've got a system that is leaking like a sieve, so you really kinda want that master meter installed. But at the same time, arsenic is a big health issue for those that are, that the water is being provided for.
So just trying to figure out priorities, and where they're at as a small water system. Mister chair, vice chair, commissioners, commissioner Thompson, my recommendation would be that the master meter be installed first. And I'm trying to check my memory banks on when the last time the media route was replaced. I wanna say subject to check, it might have been about a year ago. Okay. So I think they have some leeway, and it's my understanding is lasting anywhere from two to three years. So I think she'll have enough time the company will have enough time to build
up the funds to buy the master meter, get it installed so they can start tracking how much water they're pulling from their well so we can do more accurate water loss calculations, and then start building up funds to re for the next media replacement cycle. Okay. Perfect. That's all I had. Alright. Thank you. Vice chair Walden. Thank you. And, wanna thank judge Nichols. I know there's a lot you had to wade through, to get to your recommended order and opinion. And, I appreciate that you developed a rate design that's in compliance with the commission's water policy. So I I do have a question
for, well, for missus Hollyfield and for, for Brit to to weigh in. So in the record, nobody is a trained operator, for this this facility. And I I know, commissioner Marcus Peterson asked about selling it. Is there a recommendation that they retain somebody, like a water management company, who is trained in being an operator for such a company? There is a we do have a commissioner. We do have a water rate, a water cup. We do have Tiro Waters
Supply. I don't know have an exact name. And he does the manic he does the water testing. We have him on we are paying him to do it on a monthly basis. Mister chair, vice chair, commissioners, we can confirm that they're using Tierra Water Management System as their operator. Okay. Thank you very much. And, before so we had an issue where the rates being charged were not the rates authorized by the commission. Missus Holyfield, will you and other members of your company ensure that,
these new rates are billed accordingly so that you do have enough money to maintain the system? Yes. I will say that we will be doing it according to the what we are supposed to be charging. Yes. Alright. Thank you. That's all. K. Commissioner Lopez? Thank you, chair. No real questions, but, again, just to thank you to the the ALJ, the staff, ombudsman. A lot of work. Again, a a pretty old system, small system. But, again, these are are important, you know, health related, especially when it comes to that arsenic,
value. It's great to hear that I had that same concern on the prioritization between arsenic and the master master media. I would think the arsenic would have a higher priority, but it was great to hear that there's a reading. The media is not too old yet, for it to be, have to be replaced immediately. And, again, to the to the owner of the utility, again, we're here to help, reach out when you can. Adherence to the order is gonna be probably heavily looked into to ensure. But, in the end, I think you're all trying to do the right thing. Again, inheriting this, I know, can be a very daunting task for something that you're not familiar with.
But, again, we are here to help. And we're not well, we're kind of from the government, but I wouldn't say, Brits, not the government. So, so, again, thank you for all the efforts put forward. Alright. Thank you. And I don't know that I have any more questions, but I'll just reiterate that, hopefully, this has been a little bit friendly, and not too not too harsh. But, I would like to to reiterate that, we are from the government and we're here to help. So, please take us up on that if you have any issues, miss Hollyfield, because we we want you to be in compliance as much as as I'm sure
you want to be. So, with that, I don't see any public comment on this issue. So vice chair Walden. I move item number 20 for a vote. And we are still voice voting. So, Carolyn, please call the roll. Commissioner Lopez. Aye. Commissioner Thompson. Aye. Commissioner Marcus Peterson. Aye. Vice chair Walden. Aye. Chair Myers. Aye. And with a five to zero vote, this item passes. And vice chair Walden. I move item number 21 for discussion. Alright. Mojave Electric. Looks like staff is first.
Good morning, chairman, vice chair, and commissioners. Jackie Neeson on behalf of utilities division staff. Item number 21 is Mojave Electric Cooperative's application for a rate increase pursuant to the cooperative's streamlined rate case process. Mohave is requesting an increase of 4.44%, which results in a revenue increase of approximately $4,511,595. The cooperatives requested rates would increase an Arizona residential customer's bill with an average monthly usage of 974 kwh by $5.99.
There was one customer objection received as of the objection deadline of 10/31/2025, and there were no requests for intervention in this case. Staff recommends approval of the company's application as specified in its staff report and proposed order, and we are available for any questions. Thank you. From the utility. Thank you, mister chair, vice chair, Walden, commissioners. Megan Grable from Osborne Maladon on behalf of Mohave Mohave Electric Cooperative. Also, remotely with me are representatives from Mohave, Tyler Carlson, its CEO, Jonathan Martel, its COO,
and Ty Weldon, its CFO. And also online is Rebecca Payne, who was our rate consultant for this matter. We very much thank staff for their thorough and efficient review of the streamline rate proceeding and support the staff report as reported. Alright. Thank you. Commissioner questions. Commissioner Marcus Peterson. Thank you. I understand this is a streamlined rate application because it met those qualifications, and that's why I have no questions. No questions. I don't have questions. I just wanna thank the company for coming in regularly for the rate, for the rate cases so that we don't have rate shock and we know there's
sufficient revenue to maintain a healthy system. Thank you. Commissioner Lopez. No questions. And, I I don't have any questions either. Just a a couple of comments that, this particular item, I believe, was done in I don't know if it was record time, but it was certainly fast. Was it like four months or five months? Something like that? Either way, I'll just thank staff for for making this happen, and and, I I love to see rate cases that don't take eighteen months. So, thank you for doing that. I know the the company has personally reached out and said thank you, for the the speed that this took.
So I just wanted to echo that and and, let you guys know. With that said, I don't think we have anything else. So I move item number 21 for a vote. Caroline, please call the roll. Commissioner Lopez. Aye. Commissioner Thompson. Aye. Commissioner Marquez S Peterson. Aye. Vice chair Walden. Aye. Chair Myers. Aye. And with another five zero, the this item passes. And item 22, everybody still good? Mhmm. Mhmm. K. While you're ready, vice chair. I move item 22 for discussion. Alright.
Okay. Staff, you're up. Good morning, chair, vice chair, commissioners. Monica Hev Asevez on behalf of commission staff. Item number 22 is Arizona Public Service Company's application for approval of its 2026 renewable energy standard budget and implementation plan to reset the renewable energy adjustment charge. Staff recommends that the commission approve the APS REST plan as modified by staff as detailed in its memo and proposed order. Staff is available to answer any questions.
Alright. Thank you. Utility? Good morning, again. Thank you, mister Chairman, Vice Chairman Walden, commissioners, Jeff Allman appearing on behalf of Arizona Public Service Company and here with me today is also, miss Carrie Karnes, our Director of Customer to Grid Solutions. APS would like to thank commission staff for their thorough review of the company's application, for approval of our 2026 renewable energy standard implementation plan. The company supports, the staff report and proposed order in this matter. We are available to answer any questions. In addition, at the appropriate time we can offer comments and address questions about specific
amendments. Thank you very much. Alright thank you. Commissioners? Commissioner? Thank you Chair Myers. I don't have questions on the item but on the amendment so I can hold those questions if you'd like. Alright good. No questions, chair. K. How about you? So I have a a a question for staff, on on these the rest rules that our utilities are still required to comply, and we've had several votes in repealing the rules. Do you have a timeline on the next step in the repeal of these rules?
Chair, vice chair, commissioners, Renell Paladino for staff. As far as I'm aware, we have gone through the notice of proposed rule making process and had our oral proceeding. Staff has filed their memo in response to the oral proceeding, and now it is in hearings bucket waiting for the rue for you to vote on. Alright. Thank you. My other comments will be when we get to the amendments. Alright. Thank you. Commissioner Lopez? I I also have comments and questions on the amendments. Making sure I'm not missing anything.
Yes. So question on the, production based incentives on legacy payment programs. Kinda ask that I wanna just close the loop on a couple questions. So on these contracts that have, the lifetime, PBI payments until 2037. Are there any possible early exit clauses that we'd be able to utilize in order to try to recoup or hedge off any long term expenses for the next eleven years? Chairman Myers, vice chair Walden, commissioner Lopez,
these are contracts that we do have with, with customers. They're, you know, certainly subject to provisions that, you know, have, you know, requirements on the customers to continue to produce from their systems and so we are only paying out the incentives under the terms of the contracts if the customer is is producing. And then certainly if, you know, there is a breach of the agreements, there's there are remedies, but specifically, there's nothing that enables us to early terminate the agreements, that we entered into as a result of the the programs that at that time, had us offering the the incentives.
Just as a a a thought, it just came to me right now, though. I mean, no no no term of, like, lemon law. If they're not able to meet contractual obligations for extended period of time or multiple times within a year, there's no way to to say, well, if you're if you're not meeting your contract, we'd be able to exit early. I'm just wondering if there's any Mister chairman, vice chairman Walden, commissioner Lopez, we can certainly take a look at that, you know, to the extent that there are, again, customers who who aren't performing or who otherwise aren't producing, you know, we have the ability to exercise those remedies. And then again, we don't,
pay out unless the contracts under the contracts cost the systems are producing. Understood. Yeah. Just, because my it seemed like these contracts are, again, purchased many years ago. So, again, some of the, the technology advancements has has become a little bit more efficient and effective. So, therefore, there's there's, you know, they tend to be a little bit more expensive above market rate. So that's kinda where we're just looking at opportunities to, you know, try to save the rate payer a little bit of money. And then the other one, I think we're talking about on the website. That's gonna be in amendments.
And, on the, Green Power, Partners program under that, can you explain to me the difference between using and retiring a wreck? This may get into a deeper wreck discussion, but Chairman Myers, vice chair Walden, Commissioner Lopez, you know, tip typically what happens when when someone retires a wreck, that is that essentially means that it's, you know, sort of taken out of circulation, so to speak, that the the the increment of generation that they are essentially using to credit themselves as saying,
we use this amount of green power. The the if it's retired, it's no longer used. And that and and so, that using it, I think we don't really think of them as using it. They're typically just held by the customer as a way to demonstrate that there's some amount of green power, that is being served to them that corresponds with the, the the one megawatt hour that is in the the renewable energy certificate. And so it's we we don't really think of them as being used, I guess I would say.
Maybe, allotted. So that that rec is allotted to a user and so it's being used by them. Maybe an allotted rec would be more appropriate when they're saying a rec is in use or being used. Chairman Myers, Vice Chair Walden, Commissioner Lopez, the it it's in use, we think of it as being in use when the customers make explicit, I guess, representations they're they're buying these wrecks for the purposes of achieving those goals, and so I think I I guess what you can say is that when they are in use,
it is the customer representing that they have been served by that increment of renewable generation. So that renewable generation is allotted to that consumer that is, again, consuming that wreck. But when you say they're retiring, so would again, trying to use layman terms here. When they say they wanna retire the wreck, they may have again, that wreck may be allotted to them, but they're saying they don't wanna give it away to everybody or sell or transfer it to anyone else, and then they can go ahead and take that wreck and remove it from the system, and then that wreck becomes a retired.
So even though that generation would still be and, again, correct me if I'm wrong here though, even though that generation may be generated and sent to the grid, the rec associated with it may be retired and nobody else can use it, and it's just in perpetuity with no rec associated with it being produced on the grid. Is that sound correct? Yeah. Chairman Myers, if I can share Walt, then, commissioner Lopez, yes. That's a that's a accurate description. Okay. And, for another time, not today to produce, but maybe, could we get maybe a listing of those that would render your purview,
APS' purview of reps that have been retired so we would be able to know? Because, again, then you have a growing pool, however many it may be, every year of people that may be retiring. Rex, again, that is green energy that's being produced and put onto the grid that, again, may not be actively tracked per se and or you may be actively tracking it but to to see, how much of retirement is out there. But because that would be, I'm assuming, different than the currently active recs that are in use. Chairman Myers of vice chair Walden, commissioner Lopez, we're happy to provide additional reporting and and sort of public tracking on these.
We we recognize, you know, with the current direction of of the commission and and Vice Chair Walden asked about it a moment ago in terms of the res, being the res regulations being repealed Right. That there is likely a need for some additional Right. Public reporting and accountability. So, yes, we are we are aligned with that goal and and we're happy to help. Perfect. Yeah. It's a perfect segue as, vice chair Walden mentioned. I mean, even though we are inquiring in with staff, and we're calling some of these these rules, I think we're we're gonna do it smartly to ensure some of these reporting functions
can can be retained elsewhere within, Ruse to make sure that, again, we're still tracking something. We still wanna know what kind of generation, renewable and otherwise, is being out there. And I think this reporting can really go a long way in in the public's eyes and also for those that are proponents of renewables that, again, they're still being actively used and on the grid. So, and I think that was my okay. So, one of the other last, within the I don't know how to pronounce the five letter acronym, the rig rig rigus rigus,
systems. So, again, this is an item that is used in order to also track a lot of the, the rec the recs themselves, my understanding. One, giving a little bit overview on the system, one, to make sure ensuring how, APS is ensuring there is no double counting going on. And then two, again, is this a system that already would be able to provide a report of which ones were retired over a, a a time period or, again, those that are in use? Chairman, vice chairman, commissioners, commissioner Lopez, Regis is a, platform that we use to retire reqs for certain customers who have requested it.
They prefer that. We do not retire our own reqs through Regis. We do that in house. And we had been exploring some additional software to make sure that we are we're tracking and reporting in a way that customers are asking us for. They're increasingly asking for additional reporting, hourly reporting, and so we are working to evolve our reporting tools. But at the end of the day, we are absolutely not double counting. We go through, regular auditing processes. It's reviewed frequently and there is no double counting occurring. Okay. Thank you for that and that was my last question.
Thank you, chair. Alright. Thank you. And now public comment. Again, reminder, three minutes for the public commenters. And, we start with oh, my list. Here we go. Autumn Johnson. Good morning, chairman. Are you able to hear me? We are. Good morning. As you stated, my name is Autumn Johnson on behalf of the Arizona Solar Energy Industries Association or yeah. I wanna address staff's recommendation to eliminate funding for the Arizona GoSolar website, because it removes a core transparency and consumer protection tool without identifying any corresponding benefit
or the reasonings for its elimination. The Arizona GoSolar website is a statewide data resource. It consolidates interconnection data across every major electric utility operating in the state. It is the only publicly accessible platform in the state that performs this function. There is no comparable If it goes away, the information does not migrate somewhere else. It would disappear. The annual cost to maintain the website, according to APS's own filing and the staff recommendation, is $360. Arizona Public Service serves approximately 1,400,000 customers, and that works out to about 1 fortieth of 1¢ per customer per year.
Not per month, per year. APS earns more than 600,000,000 in profit annually. It could come up with the cost of the web site if it simply turned over the couch cushions in its executive suite at the Sun's Arena. Eliminating the website does not reduce rates, does not improve affordability, does not meaningfully affect the REACT, it simply removes its statewide transparency and consumer Protection tool for an amount that is effectively zero. This website reduces confusion before customers interconnect. It helps installers and consumers understand utility specific requirements. It's utilized by legislators,
state agencies, researchers, analysts, industry, other utilities, and the media. Chair Myers, you said that your number one goal as chairman is to, make transparency a priority, and that that's not just about access. It's about clarity. This website is clarity, and eliminating it would be the opposite. Eressea is neutral as to whether the Arizona GoSolar website remains with the Arizona Corporation Commission or is housed by the governor's office. But I certainly hope it does not become a political football moving back and forth or that it would go away if there was a change in an election. What matters is that the site exists, remains neutral,
and remains publicly accessible. Regardless of where it is housed, utilities must still be required to provide the underlying data. This is interconnection data, program data, and compliance data? Across the and then, I'll pause on that topic and move to the REX, the issue that, commissioner Lopez was just asking about. Across the country, renewable energy credits or REX are used and retired to demonstrate compliance and prevent double accounting. RECs are governed by accounting principles. A single utility should not be allowed to deviate from what is a national standard. APS argues this is a matter for their customers and not them.
But changing that framework is a major policy decision that deserves a full full rule making, not a side door in a single utility filing. We agree with APS that additional public reporting and accountability are essential, but we don't believe that waiver of the requirement is the way to accomplish that. Thirty seconds. All of all of their recs should be really going through Regis. But to the extent that the commission is interested in learning more about Regis, we'd be happy to help facilitate a meeting with Regis so you could learn more about how it works. I'd ask that you please maintain Arizona GO Solar website, and please do not upend the rec market today.
Thank you for your time, and I'm happy to take questions. Thank you, Autumn. Next, we have, Troy Horton. Good morning, commissioners. Thank you for the opportunity to speak. My name is Troy Horton. I am representing Scientist, Rebellion Southwest and my great grandchildren. I'm a residential APS customer. I'm here today because I'm concerned that this proposal will harm everyday customers like me, not on paper, but in our real lives. The science is crystal clear. If we continue to burn fossil fuels, future generations will not have a livable world.
This is truth. 70 plus percent of Arizonians understand this. Resetting the renewable energy standard should be strengthened, not weakened. For most of us, electricity isn't optional. In Arizona, it's survival. We rely on it to keep our homes safe during extreme heat, to protect our health, and to manage our monthly expenses. When When changes are made to programs that help customers reduce usage or control bills, the consequences are immediate and personal. This proposal moves away from programs that help customers save energy and money,
programs that are voluntary, cost effective, and proven. I'm especially worried for seniors, people on fixed incomes, and families already struggling with rising costs. These programs help people stay in their homes, avoid shutoffs, and get through the hottest months of the year. It is also concerning that this proposal shifts risk away from APS and onto customers. When efficiency and demand side programs are reduced, the more cost that customers are locked into paying for years. If forecasts are wrong or costs rise,
customers bear that burden, not the utility. Arizona's extreme heat is not hypothetical. We experience it every year. Programs that reduce peak demand help prevent emergencies, reduce strain on the grid, and protect customers from outages and price spikes. Weakening those protections makes the system more fragile, not more resilient. Cost control should not come at the expense of customer protection. Short term savings for the utility should not create long term costs for families who have no alternative provider and no way to opt out.
The Commission's responsibility is to ensure electricity remains safe, reliable, and affordable. From a customer's perspective, this proposal moves us further away from that goal. I respectfully ask the Commission to reject or significantly modify this proposal and ensure that customer savings, choice, and protection remain a priority. Please consider the voices of residential customers like me. Thank you. Thank you, Mr. Horton. Next we have Kate Bowman. Good morning,
Mr. Chairman. Good morning, Vice chairman Walden and commissioners. My name is Kate Bowman, and I'm speaking on behalf of VoteSolar. I'd like to address three, elements of the 2026 rest plan. First, I respectfully disagree with the elimination of funding for the Arizona GoSolar website. I agree with, miss Johnson's points and don't want to reiterate what she said already. But we'll just add that this portal makes data and information available for eight utilities. And that data and information is an essential starting point for evidence based policy decisions.
And without the website, stakeholders and regulators will be in the dark when it comes to understanding solar adoption across different parts of the state and over time. So to speak to commissioner Thompson's amendment and and what I think the intent of this amendment is, I appreciate the goal not to end public access to the data, but to have the utility move it in house to a different website. My concern is that, first, like I said, data from seven other utilities apart from APS is on the website right now, and it's not clear what would happen to that information. And second, eliminating this $360 expense doesn't save any rate payer a single cent on their utility
bill. But if stakeholders have to request that data individually from utilities, it's going to be much less efficient and ultimately require more in terms of the time and the expense from utilities if they have to handle requests for for data on a one off basis. Second, I'd I'd like to address the Oracle o Power solar engagement tool. This is in APS's application explaining it gives customers with solar information about their usage to help them understand how to use energy, how to save money, and how to help balance the grid. So to be clear, this tool drives system wide benefits for all customers because it helps the roughly 15%
of customers who have rooftop solar understand how they can use that technology to reduce their impact on the grid. So programs like this are generally very cost effective because when customers have information about their energy usage, they can use the tools available to them to respond in ways that reduce requirement rec retirement provision. Excuse me. RECs are the predominant standard used to track compliance with renewable energy policies and goals nationwide. And altering the treatment of RECs in isolation is opening the door to double counting of RECs. The Federal Trade Commission has published guidance about the treatment of RECs,
and the claims that you can make associated with RECs and has actually investigated a Vermont utility over concerns that the utility was making deceptive claims because that utility was doing exactly what is proposed here. So, without a clear REC standard, private companies that have renewable energy goals goals that want to purchase RECs to meet those goals to show they're meeting their goals can't have confidence that the RECs they're purchasing are valid, and that's going to drive private renewable energy investments to other states that have more reliable accounting. So,
I urge you to protect the value and integrity of renewable investments in the state and deny waiver of the rec requirement and ensure that you look at this in a more holistic sense, in a separate proceeding. And so summary, recommend approval of the programs in the APS, 2026 rest plan as well. Thank you. Happy to take questions. Alright. Thank you, miss Bowman. Amanda Ormond. No miss Ormond? I don't see her online. Okay. Alright. I guess, any other thoughts from commissioners after public comment? Doesn't appear to be any.
So we have we do have two amendments, that the, that have been referenced already by the public commenters. First, vice chair Waldron, would you like to introduce yours? Yes. I would. And, I I'll introduce it, but I will also have a a couple of questions that I'd like to ask APS and staff, that will, I think, strengthen support for the amendment. But I'll start with, introducing it. This is to modify APS's proposed 2026 rest plan. This will remove the funding for the solar watts program that APS rate payers should not bear the responsibility of funding software programs for non participating,
non APS customer research on residential solar photovoltaic and battery storage systems. And then to add and strengthen clarification that the five year rest plan budget of $700,100,000 is not approved. And then should I go into my questions? Please do. So I do have, questions for staff, and I agree with all of your recommendations. This is the only recommendation that I did take exception on. Could you explain, why you approved this particular program? Chair, vice chair, commissioners. Just to give you, kind of our intent behind it,
we looked at the software cost and the other costs that were not already in place, and being used by the utility and looked at those as items that didn't need to be approved going forward, this was an existing program that was already being used and we recommended continuing to use it. Alright. And then, if I could ask, APS, the same question about this program, and your, justification for the program. Thank you, chairman Myers, vice chair Walden. Yeah, the the program began a number of years ago. It was first approved in the 2021.
Our peer utilities offer this program as a tool to help residential customers objectively evaluate, the value of rooftop solar and stored resources for their home and for their household. I want to be clear this is only for APS customers. APS customers are able to basically use the tool to look at data about their usage and compare that against, what essentially, you know, rates and payments would look like if they had a rooftop solar and a storage
system. So other companies, other entities, can't use it to to sort of gather data for themselves. It's only for individual APS customers to use to evaluate, you know, how the systems would work with with them and their households. We do think it's an important tool and that's why we included it in the application. It's one of it's really one of the only objective ways that customers have to sort of take information that they're getting from advertising and other places about rooftop solar
and sort of objectively evaluate that for their own household and so for those reasons given that it does sort of provide all customers that ability to, you know, effectively test these claims in real time in actual circumstances for their household, that's why we included it in the application for for approval. And but with with rooftop solar, you don't you don't sell rooftop solar and you can't guarantee what the costs are going to be for for any household. So you can there's and there's already tools that that exist for that.
But there there is an issue kind of in the industry where there are solar companies that represent themselves as as being part of the of the utility. And so some customers see that as a as a guarantee that they're gonna save a certain amount amount of money or that APS is actually selling them the solar panels, and they don't realize till later that that that's not happening. So, do you have objection or issues with these other tools that are available for making those estimations? Because there's there's a lot of free ones out there. Chairman Myers,
vice vice chair wall then, yes. We we don't have concerns with with those other tools, tools being available and and for customers making use of them. This tool, is integrated with, aps.com and uses the individual customers data, that that we again that we have, and that we're in an ability to sort of share and through the licensing payments, you know, use that individual customer data to make that comparison, so we think our tool does a good job, in the sense of providing again that objective check against representations made by others as
to how solar will perform but, you are correct there are other tools available in the marketplace, and so, you know, that's certainly an option for customers but ultimately, you know, with the tool that we've developed that the Commission approved a number of years ago and that the other utilities have, you know, we again we believe it's an important, part of the services we offer to all customers for evaluating solar claims. And I think that's where you could pay for it. It's a very small amount that you could pay for outside of rates since it's not something that necessarily benefits all customers.
It's a small amount of customers that do solar, and that's something that the company could easily take on. It's a de minimis amount to to maintain that service rather than put that amount in in into, what you're recovering from from your customers. And I and and I do appreciate that you, you know, you wanna provide that service. I think there's an issue with trying to be a fact checker. I I know we have problems with with rooftop solar companies that have that have been predatory, but that really falls under the jurisdiction of the attorney general's office.
I think this is really the kind of, program or software that Arizona would benefit from for for everybody in Arizona, that could be offered out of out of a different agency, especially the agency that's actually tasked with overseeing rooftop solar companies because we we can't do anything about rooftop solar companies or about claims on what people are gonna save about rooftop solar, and those are really complaints that are outside of your jurisdiction and the and the commission's jurisdiction. But it sounds like, you know, for APS,
for what you wanna offer, it could be something that you have to decide if you think think it's worth it that, you wanna add that de minimis amount that, you would not collect from from rate payers. So I I, still, support, the amendment and present it, for for vote and and or for discussion and then vote, in removing this this program, from from the rest plan. K. I think we've already heard from staff and the the company. So, do you guys have anything else you need to say other than than okay. Any other questions from commissioners?
Yes. Yes. Thank you, chair Myers. And, thank you, commissioner Walden. It helped with you asking the questions because those were a lot of the same ones I had. Just clarification, I guess, to APS. Is SolarWatt the same as the Watt Watt plan and solar smart program? Yes. Okay. And my question was, so if this is eliminated, is the data exist out there for solar installation companies to provide that analysis for customers? And it sounds like you've just answered yes. It's simpler because you have actual customer data that you can put into your tool. But if I had my bill and I was an APS customer, I could type it into a free tool and do the same analysis.
Is that correct? Chair, vice chair, commissioners, Commissioner Marcus Peterson, yes. We to to my colleague's point, we continue to propose that we provide this service because it does pull in the customer's actual rate information as part of the calculation to make that a little bit more accurate for our customers. But certainly, the customer can take their bill and go to another tool as well. And type it in. Okay. And what was the cost of just this software? The chair, vice vice chair, commissioners, commissioner Marcus Peterson. It's a $150,000. I see.
Okay. Okay. No further questions. Thank you. Sure. No questions. No. You're good. Go ahead. So my only concern, and I'll be supporting some amendment. I understand that, again, the website is intended for APS customers, and you can bring in your APS bill. But, again, just checking right here. I was able to go onto the website. I'm not an APS customer. I was able to actually get a full financial report on whether batteries, solar, backup would be beneficial to me. So, I didn't have to log in with APS password or anything. So this is exposed to the public.
So, again, that's one of the reasons I'll be supporting this amendment is because, again, anyone can use this and the APS customers are paying for it. So Alright. Vice chair Walden. Yes. I move Walden amendment number one for a vote. And, Carolyn, please call the roll. Oh, pardon me. Yes. Walden revised amendment number one to a vote. Thank you. Carolyn, please call the roll. Commissioner Lopez. Aye. Commissioner Thompson. Aye. Commissioner Marquez Peterson. Aye. Vice chair Walden. Aye. Chair Myers. Aye. And by a vote of five to zero,
this amendment passes. And now we go to Commissioner Thompson. Thank you, Chair. So Thompson revised Amendment one addresses the Arizona GoSolar website. The website came about in 2010 following a direction by the commission directing APS to create the website and make it available or make available information regarding, incentives, workshops, on renewables, and as well as information regarding the status of the utilities efforts towards beating, the energy renewable energy standards. And while this requirement was not a part of the rest rules,
it's it is very much tied to the rest. You know, we often get mixed messages when we're sitting up here about how the utilities aren't innovative enough or they don't, do enough to promote certain programs or incentives that they can't be trusted. Well, here's the perfect opportunity. Get the utility out of the way. All the data is still available. And I'm sure there's some entity out there whether it would be the government or whether it be a private entity that would gladly fill that perceived void into a
better job than APS is currently doing. You know, a lot has changed since 2010. And the availability of this information is far more advanced than it was fifteen years ago. And, if you go to the site today, for example, I'm not trying to no. I'm not trying to throw shaded APS, but it's severely outdated. It was mentioned that other utilities provide data to this website but it's my understanding many, if not most, haven't been providing updated data for quite some time. For example, if you, click on several of the links on the website,
they redirect you to third party websites including the ACC. It doesn't appear that TEP, for example, has even provided any new data since September 2024. I also don't think that it's the place the ACC to be mandating a utility maintain an outdated website regarding solar incentive. If APS wants to provide this information on their own website, they're free to do so as is any other utility. Stakeholders should communicate any perceived lack of transparency to the utility and to the commission.
But sometimes we sit up here at the dias and we look at decisions that prior commissions have made and requirements that end up getting piled on to our utilities as well as our own staff. And it leaves me scratching my head sometimes. Anytime we as a commission have an opportunity to clean up an archaic decision of the past and make things better, we should do so. Last week, I was contacted by, both Eressea and by the Governor's Office of Resiliency about the idea of taking over the website, particularly in the shadow of the decision that potentially could come,
out, for rest if that were to get repealed. And that got that's what kind of started my staff and I thinking and contemplating on whether or not APS or any other utility should be mandated, to maintain a website. So, what my revised amendment would do is in the mandate requiring APS to own or maintain a website, it sets a deadline of 12/31/2026 or sixty days of a repeal of rest if that were to happen, whichever is sooner. It then allows APS to explore options to transfer the domain and the associated information
to another entity whether that That's another government agency or a private entity as long as it's not another ACC regulated entity. It makes it clear that no more rate payer funds, as small as they may be, shall be devoted to the site. And just to be clear, the revised Thompson one makes it abundantly clear that APS is not prohibited from continuing to provide this information on their own website. They're just not going to be mandated by this commission or authorized to maintain this specific website.
And with that, that is Thompson revised amendment one. Alright. Steph, company, any comments on this one? I'm not seeing none. Other commissioner questions or comments? Yes. Just a, I guess, a comment more so. When I I saw this, initially, I questioned it, but I appreciate your explanation. I asked APS, tell me about the views of this website. And I understand it's gone from, in 2020, 14,000 unique views. It's going down to about 10,000 views. I also looked at the website and found some of it outdated. But I do see the value to having a centralized publicly accessible platform that contains
all this data, for customers that are looking to this, but do understand that I think your point, commissioner Thompson. So, wasn't sure sitting down, but I I am going to go ahead and support this revised amendment. Okay. Thank you. Vice Chair? I don't have any questions. Commissioner Thompson covered it in his explanation. Thank you. Alright. Thank you. Commissioner Lopez. Yeah. No questions but again, comments. So again, stated a couple of times for those, opposing this amendment. I appreciate the understanding that this may have very little if no no impact to,
the rate payers bills, but, again, that does not exempt the principal the principality of having rate payers and or the utility paying for things that, not every of the rate payer not all rate payers are utilizing. Those that aren't, this is, again, a tool, I think, that is used by outside entities, it seems like. I mean, I I again, the information here, like, not just being outdated. Again, I I just don't see an average APS customer utilizing as we can see. But as, commissioner Marquez Peterson mentioned, the the decline in usage,
and I'm willing to bet a lot of that hits were probably recently because of this, this decision and the the the public going out there or finding out what's gonna be going away. I again, I just I don't see the purpose. And and even though it is a small dollar amount, it it doesn't mean that the all APS repairs are supposed to be putting this on the back foot in the bill for this, no matter how small. It's the principle of it. So I will be supporting the amendment. Thank you. And, I'll just echo the the comments that my fellow commissioners made. I too had some concerns of the original amendment but, in light of the revised changes to allow the utility time to transition this to
another government organization, I think this is a good amendment and I'll be supporting it. So, Commissioner Thompson. I move Thompson revised amendment one for approval. Alright. Carolyn, please call the roll. Commissioner Lopez. Aye. Commissioner Thompson? Aye. Commissioner Marcus Peterson? Aye. Vice chair Walden? Aye. Chair Myers? Aye. And with a vote of five zero, this amendment passes. So, vice chair Walden as amended. I move item twenty twenty two as amended for a vote. And, Carolyn, please call the roll.
Commissioner Lopez. Aye. Commissioner Thompson. Aye. Commissioner Marcus Peterson? Aye. Vice chair Walden? Aye. Chair Myers? Aye. And with another five zero vote, this item has passed. To my fellow commissioners, we got two more items. Plow through or going to lunch break? Do it. Alright. I move item 23 for discussion. Alright. That is in staff's court now. Good morning, chairman, vice chair, commissioners. Matt Connolly on behalf of utilities division staff. This agenda item is an application by Arizona Public Service Company regarding revisions to its
Green Power Partners or GPP tariff and the associated subscription agreements. The company is proposing modifications to these existing option a subscription agreement to revise renewable energy credit pricing and to adopt a new option d and subscription agreement to allow customers to continue purchase green power from existing renewable resources. Staff has reviewed the application and recommends approval of the proposed modifications to option A with updated rec pricing and approval of the new option D and associated subscription agreement
as reflected in the 10/07/2025 amendment to the application and staff is of course available for questions. Thank you. Utility. Thank you. Commissioner, sorry, Chairman Myers, vice chair Walden, commissioners. Again, Jeff Allman here on behalf of, Arizona Public Service Company, and miss Carrie Karnes, our director of customer Grid Solutions is here as well. We, again, wanna thank Commission staff for all their hard work in reviewing the the application and and the modifications that that we're seeking for the Green Power Partners program.
We believe these modifications to GPP will help the company ensure the continued viability and integrity of this program going forward and maximize the value of the renewable energy credits that were sold to participating customers. Additionally, the revenue generated from our GP program is passed directly back to customers as an offset under the company's renewable energy adjustment surcharge, thereby benefiting all customers. So the company supports the staff report and proposed order and we're available for any questions. Thank you. Alright. Thank you. Commissioner questions?
Yes. Thank you. I I asked this offline also, but wanted to kinda hear this, I guess, publicly. When you surveyed for pricing protocol, I guess, I was told WEC and ERCOT were used. Can you talk about, why and and how that came about, please? Chairman Myers, Vice Chair Walden, Commissioner, Marquez Peterson, we look for both comparable, comparable jurisdictions in terms of bundled rec products. When we say bundled rec products, we mean both, renewable energy attributes being provided bundled with electricity. That's what our rec products represent.
But we also wanted to get some some sort of national and regional, input as well to make sure that we're keeping pace with, with with pricing and so that's how we selected the benchmarks, with both ERCOT and with WEC, but we also looked again at the, some some national registries as well, just to make sure that that our pricing is is reflective of, sort of the the best market price that we can get on behalf of customers. Anything to add to that? Great. Thank you. And I I was surprised not to see feedback from customers that use the green power program. I understand they're 18,
and it was kinda described to me, well, they're already in the programs. They didn't have feedback because this price change wouldn't necessarily affect them, but future users. Is that correct? Chairman Myers, vice chair Walden, commissioner Marcus Peterson, I don't believe that we specifically surveyed the existing GPP participants, or or others. Again, from our perspective, what we're trying to accomplish here is making sure that we have the best benefit for sort of all APS customers as part of this program, and making sure that that we have competitive prices for these reqs.
From our perspective, make sure that we're not leaving money on the table on behalf of customers. And so from from that perspective, ensuring a competitive price coupled with the fact that we do offer this program as widely as we do for our commercial and industrial customers, and we we don't believe that there's gonna be concerns on behalf of prospective purchasers of that because we're raising the prices. Again, we we wanna make sure that we're what we're doing is competitive so that other customers, so the benefit for them is maximized. Okay. And so with the growth in data centers and tech companies that wanna come to
Arizona, they a lot of those same companies have a 100% clean energy commitments that they've made to their shareholders. What are you projecting, I guess, in terms of the need and demand for REX and what that may mean to Arizona? Chairman Myers, vice chair Walden, commissioner Marquez Peterson, I don't believe we have any specific projections in terms of what we're expecting to see increased. We do know, however, that to your point that there a lot of these companies that are moving to our service territory do have sustainability goals, and and they are looking to use programs like GPP to,
you know, in a sense green up their energy supply and so what we expect is that there is going to be increased demand, for this program, that's why we've looked to expand it, with the addition of option d as well, so that we can accommodate, the additional demand that that we believe we're likely to see, and again it's not just data centers other large industrial, large customers that are moving to the service territory have the same sorts of sustainability goals, and so that increased demand from from them is also an important part of this.
Thank you. No further questions. Mister Thompson. I have no questions. It's a statement that says I, you know, I think this has nothing but an upside for, the customers, and so thank you for for this. Right. Sherwood. Yeah. Thank you. My question for APS, and I I just wanna confirm and I I think we've we've heard it, but just to confirm, that the renewable energy credits, could be sold sold and then there's that possibility that, that that benefits your existing rate payers. Yeah. Yeah. Chairman Myers, Vice Chair Walden, that's correct. Yes. It it benefits all of our existing rate payers,
because the credits from, the sale of of the REX offset existing rates. Alright. Thank you. Commissioner Lopez. Yeah. So this is gonna build off the prior questions I had. I was just trying to seek understanding to understand on this because, again, you're talking option d, in in the description saying that this this these reqs seem to be a little less valuable than prior recs. So since this is option d, are the other options a through b c, then a tiered declining value,
increasing value? Are they still actively being sold as other options? Chairman Myers, vice chair Walden, commissioner Lopez. Yes. So it's not a declining value. It's really what options b and c represent is more of I think what you would call a bespoke option for renewable energy credit generation. Option b enables, a customer to basically if they have the desire to have a renewable resource co located or cited in a specific location, they can contract for that and that would be a resource that's in our existing,
existing plans for development to serve, you know, to serve their load, so that would actually be an increase in price over both a and d, because you do have that specific contract that you'll be executing for the development of that resource in the customer's location. C is probably another step above that in terms of what we call additionality because with option C what's happening is that the customer is pulling forward a resource or
adding something new, to the resource mix that we weren't otherwise planning to do from the standpoint of our, of our resource plan. And so that has an additional cost on top of that because they're really paying the incremental costs, for bringing forward that additional generation and incurring all of those costs as part of the contract price. That's why option c is probably even more expensive than b or a or than d. So again, those aren't we don't have specific tariff prices for either b or c because they're
determined based on the specific project that the customer is working to implement. And then so what's option a? Existing? Option a is is really for, yeah, for existing resources that were put into service after 2021. '21. Right. So that was when we initially adopted the program, so option d now expands it into resources that would have been put into service prior to 2021. Okay. And these and these recs are are they preemptive generation recs? Post generation, they're true up every you might understand that they're true up every year.
So does that mean you looked at the past year's generation, that's the number of reps that are available? Again, as from our previous discussion, customers may have those allotted to them already, and you understand that the generation is gonna continue, that they're holding on to and keeping them active and not being retired. And then anything new coming on, again, would be part of it sounds like maybe a, b, or c. But then, d, you're wanting to open up the prior to, 2021 recs. Those are those recs now again, you have them in hand? Correct. Commission Chairman Myers,
vice chair Walden, commissioner Lopez, the those resources that were constructed pre '21, are still in service, and so they're generating reqs right now. Mhmm. And so we would be able to make use of those for the purposes of, transacting them under under d. So it is contemporaneous generation to your point earlier about, you know, as the the resources generate electricity and they serve retail load, they're creating racks. And Is and is that not are those sold sorry. I didn't work too, but are those sold on,
again, daily, monthly, annual basis that you accumulate those racks for sale that they're they're being allotted? Customers, I I believe they have at least one year contracts they have to Okay. So they're an annual So it's so it's an annual consumption basis. They're usually, allotted every month, based on their actual consumption. Okay. Most customers don't I mean, you can speak to this better than I can, but I mean, I think most customers do, you know, sort of 100% of their consumption on a monthly basis, and then that's screwed up every year. Okay.
So, again, we had it's not large load or or even, again, industrial user says says I want a 100 megawatts of green power. I'm gonna buy the rec from APS saying that it's a 100 megawatt hours of whatever that is times the year that I'm gonna pay for, and then they they buy the rec from from you all. And you're saying, again, opening up option d, is gonna provide more rec availability to them as it as it get, consumed in perpetuity. So that 100 megawatts, if that consumer does not use 100 megawatts,
that allotment still stays with them. Is that correct? If they used 90 and there's 10 megawatts of generation that was produced for the year, then that's taking a lot ten ten megawatts of wreck I don't wanna say credit, but the unused wreck would still be going to the grid, not to that individual. Would that be correct? Yes. Chairman Myers, chairman Westerwald, and commissioner Lopez, yes. They're only using based on I'm sorry. They're only receiving, based on their consumption. And so if in your example they used less than what they were expecting, then they are not going to get those additional reqs.
And vice versa. If they went over the req, even though they may be consumed a 110 megawatts of power, power, whatever, again, calculation wise, they may only have they may not be meeting their on paper statement of that they're a 100% renewable. They may be 10% over. And you just again again, you have a very wide spectrum portfolio of usage, but, again, again, some of it's renewable, some of it's nuclear, some of it's this, that, the other thing. But they can't necessarily guarantee that that that other 10% of megawatt then is is clean. Is that is that also accurate? Chairman Myers, vice chair Walden,
commissioner Lopez, that's correct. If they don't procure enough to offset, they won't have the full amount. Okay. So I I at least I'm understanding how the rec stuff works. Now when we talk about the or I'm saying devaluing, talking that the option d provides 2021 older, production, I guess, systems that are produced, but but it's not really these systems are producing since before 2021, but the wreck is a true up. So the megawatt hours of production in the grid, whatever it may be, it's still
I don't wanna say this. It's still the same electrons. Right? It's still it's still power. Right? It's just coming from an older system. So I'm trying to grasp the concept if why is there a difference in value of option d versus an option a? Chairman Myers, vice vice chair Walden, commissioner Lopez, yeah, I think you you've described it correctly. I think they're again, in the marketplace today, and and miss Connors can speak to this maybe more than I can in terms of what customers are seeking, you know, I think at the particular time at which when we had the GP program,
GPP program first approved, there was a big desire for additionality, and so they a lot of the customers in this space wanted, sort of the to have reqs from the newer resources because from their standpoint that helped satisfy that additionality concern even if they weren't necessarily spending to bring forward, sort of a truly additional resource, like you would with an option like you would with an option C and so I think for the older generation resources that's why there's I think a lesser value attributed to it in the marketplace but
Carrie you deal with the customer so you can speak to it. Yes so chair, vice chair, commissioner Lopez, I I think the takeaway here is that some customers are driven, as my colleague said, by when the resource is put in. And I personally don't say older or newer. I say pre '21 and post market essentially is driving that. But we have some customers who are interested in being able to state that they are meeting their own sustainability goals without, necessarily prioritizing when the asset went into service, just that they can receive that rack and that it's retired on their behalf.
And I think what's important is that we create, options for all different kinds of customers because at the end of the day, this is a direct pass through benefit to all of our other customers. And we have customers, like municipalities, for instance, that are interested in participating in the program, but a, even a, is, too high a price for them. So we we're trying to find a way to bridge a desire that some of our customers have to participate in the program and still creating that benefit for all APS customers. Does that answer the question? Yeah.
I'm kinda I'm if I can restate it, I I I guess you're you're a. It's a market driven value in that a lot of the individuals that are pursuing growth of renewables, that that's why they want option a is they're willing to pay a little more to get something newer, I guess, on online than something that, again, has been in existence for six years, seven years, or whatever, saying that this been existence, they'd rather drive the, again, expansion. So by paying more for it, they really do that. But okay. I see. I see. Again,
that would be but it's all market driven. My last question sorry. We'll we're a little over on lunch. Sorry. But the last question on that. So this and, again, it is market driven. So when you do sell these recs, whether it be option a or option b because again or, I'm sorry, d, it sounds like b and c are kinda more of a contractual set cost, but a and b are kind of more on a as markets auction wise. I mean, when so when those reps come out available, it is there a dollar value set? Because you are asking for an option d that would be allowed to expand to the 2021,
but there's no necessarily price on it. Right? Is it always done at or sold at an auctioneer depending on what other how many people want it, like you said. Because if if cities or other, entities wanna buy the older racks, but there's a run on it, they could wind up getting close to the option a in price if there's enough demand, or does it not, or is it always you see that as not really happening? Chairman Myers, vice chair Walden, commissioner Lopez, again, the the the way the the program works as set out in the tariff, we we have to have the set prices out for a and d.
I mean, that's certainly subject to change if if the commission were to be inclined to, you know, entertain a more flexible pricing structure. In terms of how we procure the recs themselves, these come along with the the contracts that we make for procurement of the resources. So we're not auctioning them or buying them separately in connection with the procurements that we make. For every, you know, renewable project that we bring online, we're contracting to acquire all the the recs that come off of that. But but yeah,
I think this is, you know, we wanna make sure that we can stay nimble in terms of how this market is growing and evolving, and so we'll likely be back sometime in the near future to update pricing again. And again, I think what we would we would look to do in the future is is as we're seeing this market evolve, if there are different types of pricing structures that may allow for more flexibility, we, you know, we we would we would ask to explore that. But, again, we don't have that in front of you today Right. But I think it speaks to the issue that you're you're alluding to,
which is the need to respond to the market as we go forward. I don't know if I can ask this question. I I said my last one, but is that then part of future rate case that we would be talking about pricing for the options a and d, or is that being set today or just allowing the option for today? Chairman Myers, vice chair Walden, Commissioner Lopez, I don't we don't believe you would need to necessarily use a rate case for that. GPP was developed outside of a rate case. So it can be done on a case by case? That's right. Okay. Alright. That's it. I'll have thanks, Chairman.
Alright. Thank you. Just a a couple of quick follow ups. Do you have any data on how much annually APS customers benefit from the Green Power Partners program? Chairman Myers, Feishew Walder, commissioners. Yeah. In our in the, application itself, we have the budget that lays out what we're benefiting from. There's about 30,000,000 $30,500,000, in offset that is gonna happen starting in 2026 when the new, rates go into effect for for the react mechanism. So the item you guys just approved,
that will, enable that going forward. So right now, it's $30,000,000 and, again, as we talked about, we expect that to grow as we're able to, initiate additional sales of racks going forward. Okay. And generally speaking good? Generally speaking, are the customers of the Green Power Partners programs, are they happy with the way this is working? Chair, Vice Chair, Commissioners, Chairman Myers, yes, our customers are very happy with this program. They're excited about it. They talk to other customers about it. So we end up having pretty frequent conversations about Green Power Partners.
A lot of the 18 customers that, Commissioner Marcus Pearson referenced, some of those customers are are national customers too. So we end up hearing about this program as we go through our travels. So definitely, seeing customer satisfaction as a as a part of the program. K. Thank you. That's all I have. We do have one public commenter. So, Troy Horton again, and reminder, three minutes, please. Yeah. I'm, Troy Horton. I still represent Scientist Rebellion Southwest and my great grandchildren. I'm here because I'm concerned about how this proposal will affect customers who
depend on electricity, not just for comfort, but for safety and basic stability. I will repeat that the science is crystal clear. If we continue to burn fossil fuels, future generations will not have a livable world, and 70 plus percent of Arizonans understand this. Modifying the green power partners program should be strengthened, not weakened not weakened. Last summer, people had to choose between running the air conditioner and worrying about what the next bill would look like, and no family should have to make that choice in Arizona. Arizona summers are already difficult to get through when programs that reduce usage or help
manage peak demand are weakened or reduced. Customers lose control. We're left with higher bills and no practical way to respond, especially during heat waves when public responsibility. Your mission is to serve the public interest to protect people, not corporations. Customers do not have a choice of a provider. We rely on this commission to be our voice and our safeguard when decisions are made that affect our daily lives. I'm concerned this proposal shifts risk away from the utility and on to customers. I respectfully ask the commission to reject or modify this proposal to ensure customer affordability,
choice, and long term protection remain the priority as your requires. On a personal note, I'm also concerned these five zero votes that I always see, basically, rarely go against corporations and that the commission is working for corporations and not the public. Once again, please consider the impact on residential customers like me. Thank you. Quick question, mister Wharton. You you are you against this or for it? Well, I'm from what I understand,
APS wants to modify the Green Power Partners program and requested a waiver of AAC, r 14 dash two. Doesn't that help APS in their profits? Effectively, they're allowing more options, and they're actually expanding the Green Power Partners program. So that's why I'm a little confused. Well, I haven't seen APS do something that wasn't for their benefit, financially. And maybe I'm wrong on that, but, I would imagine that they're looking for increased profits. Right. Thank you, mister Horton.
Thank you. Okay. Any other responses to the public comments from commissioners? No? No. Alright. Vice chair? Oh, I keep forgetting I'm vice chair. I'm sorry. Thank you. Vice chair Walden. Yes. It is. It just gotta get used to it. It's only our our second meeting. I move item number 23 for a vote. And, Caroline, please call the roll. Commissioner Lopez. Aye. Commissioner Thompson. Aye. Commissioner Marquez Peterson. Aye. Vice chair Walden. Aye. Chair Myers. Aye. And with a vote of five zero, this item passes as well.
And the last item, last year. Yes. I move item 23 for discussion. 24. Oh, sorry. 20 four. Alright. This one is a securities item. So as soon as we swap seats, we'll let them get rolling. Whenever you're ready. Good morning, chair, vice chair, commissioners. The matter before you, you've received information. We're seeking authorization to file a civil complaint in Maricopa County Superior Court requesting a permanent injunction and other equitable relief and an application to for an order to show
cause regarding a contempt proceeding against an individual that an entity that we've taken action with before. We may, at this point, wanna go into executive session if you have detailed questions. Okay. Do, any of my fellow commissioners need an executive session or are we good? Nope. Good. Alright. I don't think we need it So, with that, I will ask vice chair Walden if you could please move the item, for a vote that authorizing the security division to file a complaint and additional pleadings in superior court on behalf of the commission.
I do have a couple of questions. I just didn't think they rose to the level of needing to go into executive session, but I do have questions. Gotcha. Sure. Go ahead. So reading through this, it seems like, and I just want confirmation, that these individuals had prior judgments in the millions of dollars. They ended up raising new capital to pay off their old restitution using the exact same illegal acts or tactics that they were previously found to be in violation of securities law? Chair, vice chair, Commissioner Thompson,
that is what we're alleging, essentially. The prior action was, registration violations. They did pay back those investors, and then we subsequently found out that they used the funds from the new investors to make those payments to the older investor or the prior investors. And at this point, we are seeking contempt on those, in that proceedings or for these proceedings. Proceedings. That kind that takes a special kind of stupid, I think, to but, again, that's why they're criminals,
I guess. And I don't wanna put you on the spot, but, so I'll probably say this more as a statement rather than a question. But I'm concerned that this really raises to the level of criminal prosecution. I'll just leave it at that. In my opinion, I think this would be a a criminal case against, these individuals. So, anyway, thank you. K. Any other questions? Alright. Vice chair Walden. Yes. I move that we vote on the motion authorizing the securities division to file a complaint and additional pleadings in superior court on behalf of the commission.
Carolyn, please call the roll. Commissioner Lopez? Aye. Commissioner Thompson? Aye. Commissioner Marcus Peterson? Aye. Vice chair Walden? Aye. Chair Myers? Aye. And with a vote of five ayes, zero nays, this item has passed as well. And I do believe that means our, our regular open meeting is adjourned, and we will probably break for lunch before we come back to do the staff open meeting. So we are adjourned. Thank you.