Alright. Good morning, everybody. So we'll go ahead and call the April open meeting to order. If you'd please please rise for an invitation from commissioner Marquez Peterson and a pledge from commissioner Thompson. Thank you. Please bow your head if you'd like. Let us pause for a moment of reflection. We give thanks for this day and for the opportunity to gather in service to our community. As this season brings together the observances of Easter and Passover, we are reminded of enduring themes of hope, renewal, freedom, and redemption. May these shared values inspire us in our work, guiding us to lead with wisdom, active integrity, and serve with humility.
Help us to listen with respect, to seek common ground, and to make decisions that uplift all people in in our care. May we be mindful of the responsibilities entrusted to us, and may our efforts contribute to a more just, peaceful, and hopeful future. Amen. Please join me in our pledge. I pledge allegiance to the flag of Alright. Thank you, everybody. Before we get started, I wanted to share a little bit of recent news. Today, I'd like to to take a moment to recognize the the dedication and service of Elijah Abena to people of Arizona. He served the corporation commission for over twenty years.
He, recently passed away for those of you that that don't know. I I believe it was just last week. Right, Doug? During his time as a utility director at the commission, he played a key role in many of the complex and often difficult matters that come before this body. Public service, especially in utility regulation, is rarely simple. It involves balancing competing interests, making tough calls, and working through issues that impact people's daily lives in very real ways. Mister Abena was part of that process for many years, and his commitment to public service is worthy of acknowledgment. I believe it is important to recognize the time and work that mister Abena dedicated
to this state. On behalf of the Commission, I extend our condolences to his family, friends, and colleagues. His years of service to the public to the people of Arizona will be remembered. So with that, I guess the first item of business is the consent agenda and we have one item that's subject to 4,252 and that is item number 13. If any of the parties to that would like to be heard, now's the time. I'm not seeing anybody and nobody on line. Okay, so with that, I'll ask my fellow commissioners if there's any items currently on the consent they'd like to have moved to the regular agenda.
Nothing? Okay, So I guess the next thing is vice chair Walden, will you move the item? Move the consent agenda for a vote. Okay. And, chair, before we cast our votes, I just have a quick comment. I wanna acknowledge item number 25 on the consent agenda. It's the UNS, PFAC adjustment, which will reduce customer bills by almost $19 per month on average. The commission had to make some tough decisions in 2023 to pay down the under collected fuel balance for all of our major electric utilities.
And that wasn't an easy vote for any of us to to make. And, but it was it was the it was physically the the most responsible thing to do at the time, and ratepayers ended up paying less in the long run. So I wanna acknowledge everyone who pushed forward the solution because there were a lot of people who were quick to criticize that vote. But today, we can collectively, sit up here before the public without the massive fuel cost debt that's hanging around our utilities next. And, I just wanted to to make that known, that the UNS is going to be customers are going to be seeing another $19 per
month on average, refunded back onto their or reduction on their utility bills. So thank you. Thank you. Commissioner Thompson, that's a great point. We don't often see bills decrease but this is one of those times. So, with that, please cast your vote for the consent. Alright. And by a vote of five to zero, the the consent agenda passes. Everybody's gonna leave. Yeah. Oh, yeah. And the whole room clears out. Wow. They've got a professional dice today, don't we? Alright. Okay. Vice chair Weldon, will you please move the item? I move item 28 for discussion.
Thank you. First, we have staff. Good morning, chairman, vice chairman, and commissioners. My name is Wesley DeMello, and I'll be speaking on behalf of commission staff. This agenda item is an application by UNS Electric Incorporated to update its rest surcharge, surcharge, surcharge caps, and average surcharge rates. UNSE is requesting to increase the surcharge the rest surcharge to compensate for an under collection of $3,200,000 UNS Electric Incorporated claims that the under collection amount is due to a large number of customers signing solar residential solar interconnection agreements.
The proposed rest surcharge rates and caps would result in an increase of $3.35 per month for a residential customer using an annual average of 884 kilowatt hours per month. The distributed generate the DG or distributed generation customer is paying the average rest rate. The proposed, rate the proposed rate would result in a one dollar and ninety six cent per month increase. Staff has reviewed all associated documents with the filing and is approving the revised rates. Staff is available for questions. Alright. Thank you. And, the company?
Thank you, Mr. Chair, Madam Vice chair, commissioners. Michael Patton on behalf of UNS Electric. And on the Webex with me is Jay Rademacher, vice president of, finance and rates for UNS Electric. The company supports the staff report and proposed order, and would urge the Commission to approve it. We did have some concerns with Commissioner Walden's revised amendment number one and we did file, comments on that amendment and available to address that at the appropriate time. And we are also available for any questions the commissions may have.
Go ahead and please address it if you have some comments on that. I just I think the purpose of our comments was really to provide a little background on where we are. A lot of this results from sort of the the lingering effects of the rest rules and things that are in place and, obligations, both legal and regulatory that the company is obligated to follow. We think we've followed those, and a lot of things out there that we don't control. We tried to explain some of those, challenges that we have. I think to put it in context, but we have incurred these costs,
pursuant to those legal obligations and regulatory obligations and we appreciate the opportunity to recover those costs in an appropriate manner. Okay. Thank you. I do not see any public comment on this item. So I guess next is commissioner questions or comments. Commissioner Marcus Peterson. Yes, thank you. So, Mr. Batten, I had questions, I guess, revolving around Commissioner Walden's revised amendment number one. Can you talk about or give me more depth, I guess, on kind of the legal or contractual obligations that you had in place that I saw referenced in your memo?
Sure. And mister Rademacher can correct me if I'm wrong. First off, early on in the rest process, when there were up front incentives for residential homeowners. There were also performance based incentives for large commercial type customers and those were designed to provide incentives similar to what was being provided to homeowners, but spread out over a period of time and depended on the actual performance of these larger, renewable installations. So those performance based based incentive contracts range in length up to twenty years.
They are slowly rolling off, but we have a contractual legal obligation that the commission has acknowledged we are obligated to meet to pay these incentives depending on their performance. Those will roll off and we can predict those pretty well. We also, over the course of the rest rule period, in order to meet the compliance obligations of certain percentage of renewables every year. We entered into renewable purchase power agreements. Those were early on above
conventional generation. Clearly, they've dropped and are no longer, they're now competitive. But those early PPAs were above cost and the difference between the conventional comparable generation and the PPA cost are another cost that will flow through the rest surcharge pursuant to commission guidance and and orders. The third cost that we have are what was a result of the voted value of solar docket, in which the commission was moving away from net metering,
which provided a a very significant subsidy to the rooftop solar owners to, what the commission determined was a fair approach, which is a resource comparison proxy, sort of looking at what we could get renewable energy for, in the market through large PPAs. However, at the time of the value solar docket, there was a concern that dropping it immediately to a comparable, solar PPA would harm the the industry, so there was a glide path that the commission adopted. This commission actually looked at that that,
issue a couple years ago. Many of the companies are getting close to hitting the the market price. I know that that couple of co ops are are now have a a RCP or or credit equal to their voided cost. And UNS Electric is getting close, but they're not quite there. So, the difference the RCP payments are paid to, homeowners for all their exported energy. The utility benefits from getting the extra energy, and they comp they're obligated to compensate the, the homeowner for that exported energy pursuant to the value of solar order plus commission
approves tariffs that provided how that is done. The difference between the cost of the RCP and again the market cost per power is the piece that flows through the rest charge. The market cost of power paid through the RCP goes to the PPFAC as is the same with the PPAs. And then finally, the cost that we incur is, you know, we want to make sure we're paying the accurate amount to these homeowners and we need to track that carefully.
So there is a production meter put on there to make sure that we are not overpaying or underpaying, for exported energy. And that is a relatively nominal amount of cost, but that's also something that the company incurs to be able to meet its legal and regulatory obligations. Thank you. And it seems in her amendment, there are two major components. And one is about extending the time for recovery to 2031. Can you speak to the company's response on that? Yeah. I think I will defer to mister Rademacher on that. I think he can provide a little more context on that issue.
Okay. Thanks. Chairman, vice chair, commissioners, can can you all hear me? We can. Yes. In terms of extending the the recovery period from '28 to 2031, we we respectfully oppose that. We've been carrying an an under collection for some period of time. And from 2022 to 2024, it was slowly declining. There was a surcharge update in 2023, and under collection was trending lower. And then in 2025, that trend reversed, and we filed this, application to update the surcharge rates.
So we're we're willing to continue to to carry the cost for a a few additional years to get back to zero, but but we we believe extending it to 2031 would would just be a bit too long. Okay. And then, lastly, commissioner Walden has a point in here about hosting capacity. Can you speak to, I guess, the technical nature of that or what that would take? Hey. I'll I'll take this one. As, mister chair, panel vice chair, commissioner Marquez Peterson, the, the commission has adopted, distributed generation interconnection rules, and those rules,
have a series of processes that, depending on the size of the of the system and where it's interconnecting, there are steps that need to go through to, confirm that there aren't gonna be system problems. So I think the commission has already has in place, an appropriate mechanism to look at hosting capacity when appropriate. And, you know, Tucson Electric Power has a much more concentrated area and deployment, so they they have had some issues with that. UNS Electric, remains fairly,
dispersed in terms of deployment. But the rules that you have in place, we believe, provide to deal with the hosting capacity issue. Okay. Thank you. I wanted to ask staff, whoever wants to respond to that, kind of those three areas where did mister Patton adequately present the legal and contractual obligations, one. And two, I guess, if you could talk more about the hosting capacity, please. Chair, vice chair, commissioners, Renell Paladino for staff, commissioner Marcus Peterson. I won't speak to legal. I can speak to the, decisions that were in place that the company referenced regarding an RCP rate.
I would agree that the rate that they the company's required to pay a solar customer for their exported solar is a commission decision. That that's not up to the company on what to pay. I do believe the interconnection rules require the company to interconnect solar facilities that meet the interconnection requirements so I don't think that the company has the ability to stop installations. So as far as the company complying with commission decision and rules I do think they did comply. Timing wise I don't see an issue with when they have come in to request
the under collection to be changed, it is pushing it out quite a ways but that's up to the commission on your decision whether you want to collect right away or have them collect in a over a period of time. The hosting capacity in the amendment, staff's comfortable with the language, it's an additional safeguard. I I would agree there's interconnection rules that cover that. I don't see the harm in having that amendment language in there. Okay. Thank you very much. No further questions. Commissioner Thompson? Just kidding. So I understand that the under collection is primarily due to the surge,
in rooftop solar installations between '21 and '25. '5. I think from 2021 that went up from 07/27 to almost 2,000 in 2022, peaked around 1939 and 2024 and then came back down to a little over 10/25. So I'm assuming that the expiration of the tax credits likely played a role in that installation spike. But in your February, 2026 year to date numbers,
if those remain consistent, that would annualize somewhere around 500 installations for this year. But I recognize that the year to date may not take into consideration when the solar installations actually peak during a calendar year. So my first question is, when do you typically see the the high point in the rooftop installations? Is it before the summer? Is it after the summer? Is it or is it kind of static throughout the year? Do you know? Thank you, mister chair, and vice chair,
commissioner Thompson. I'm gonna defer to mister Rademacher to to answer that. Chairman, vice chair, commissioners, it is it is fluctuated over the years. What we historically saw was a spike prior to the commission's change in the RCP rate. So I believe that's around October 1 every year where the RCP rate changes. And so, typically, there's a there's a surge of applications prior to that that rate declining. But just to get just to get back to your your original kind of questions around the forecasting of of the current year,
we we anticipate around a thousand very similar to to 2025 at this point, maybe be sort of a leveling off compared to those higher years that you mentioned. Okay. And then, your mythology in assuming the the balance hitting zero in late twenty twenty eight, what sort of growth projection or installation rate moving forward is that assuming? Chairman, Vice Chair, commissioners, that that assumes about a thousand, DG systems per year going forward. About a thousand? Okay. And then on the, market legacy,
PPAs you mentioned earlier, right now, those above market costs are paid through the rest surcharge. So when rest is successfully repealed, is there do you feel that there's a more appropriate funding mechanism, to run these payments through? Like, for example, could those costs be run through the PFAC or the ARAM? Chairman, vice chair, commissioners, those costs could I I would just point out that the commission has adopted a unique rate design for recovery of rest costs. And so there's a kilowatt hour hour charge.
There's a there's a cap that differs based on customer class, and then there's a a flat fee that applies just to DG customers. None none of our other costs are recovered that way. So we we would just have to analyze and and make sure staff and and other parties are are comfortable with how the new framework would be allocated amongst customers and how the bill impacts would play out. But, certainly, there there's opportunities to adopt a a different framework. Okay. Great. Thank you. No further questions. Okay. Commissioner Walden, director of Vice Chair Walden.
So I've got a question for the company. So when you saw this big up uptake in request to connect, why did you not come in come in sooner? Because you had a budget and you could see in the uptake uptake that you're going to exceed that budget and here we are two years later. Can you speak to that? Thank you, mister chair vice chair Walden. I we had some explanation in terms of trying to time this to a the surcharge that Commissioner Thompson referenced rolling off so there wouldn't be any adverse impact on
the customers and having under collected we weren't basically taking more from the customers than we could. So, I mean obviously we carried the cost for a while. We also it's hard to predict some of these things and they do go up and down, but I will defer to Mr. Rademacher to explain a little more detail on the gory details of the numbers. Yes. Chairman, Vice Chair, commissioners, I agree with Mr. Patton. One of our concerns was just the knowledge that, the PFAC surcharge would be rolling off. So rather than ask for an increase at the time when that was still in
effect, we thought it more more appropriate to time this up with the decrease. So the customers were were not paying higher, at a at a given point in time. And then as as I said earlier, even though we saw the initial spike in top solar activity in '21, '22, and '23, The under collection was going down from '22 to '23 and again in '24, and it really wasn't until 2025 when that trend reversed. And it was clear we we weren't gonna get to zero with the existing surcharge
rates, and we filed our surcharge rate update application, in 2025. So, I guess, with the you know, with respect to the budget, if I'm a company and I'm I'm going over budget, I'm gonna address that immediately. So and and that's where I I feel like that you had the opportunity to file sooner when you saw the the uptake and that you're going over the commission approved budget. My other question is on the, interconnection rules. So we require a system impact study for large generator interconnections.
Is there anything I'm gonna start with staff. Is there a corresponding approach for the interconnection requests for residential solar if we're going to have disruptions? I know we had already mentioned that TEP has a high high concentration in some areas that's causing hosting issues. Chair, vice chair, commissioners, chair Walden or vice chair Walden, there is, an evaluation process that they go through on the residential installations to make sure that there won't be system impacts from that. Yes. I don't know if it's an actual system impact study, but, yes, the the company does perform an evaluation during that time.
Alright. Thank you. Do you have anything you wanna add? No. I think that's accurate. Okay. And then, is there an ability to deny interconnection requests if there is going to be a system impact? And I'll I'll address this to legal or staff on that if you if there's when you if you do that evaluation you see it's gonna be a negative impact, can you deny requests? Chair, vice chair, commissioners, I don't know that it's necessarily denying a request. I think there's a process where they go back to the customer and look for
some different specifications or some modifications to the installation so that they don't have the implications on their system that they normally would. So I don't know that they necessarily deny installations. I think they work through that with the customer. Alright. Thank you. Those are all my questions till we get to the amendment. Thank you. Commissioner Lopez. Thank you, chair. So again, appreciate the the discussion on the timing. You said you saw the you saw it declining, but then kinda tick up in in '25, and then, unfortunately, again, speed of government takes time to to to put some of these forward.
So I gotta, we some of the statements you made, mister Patton, so you said new large scale products that are still coming online. Again, are those also similar to what, vice chair Wallen just mentioned? Are those or staff can answer this. Are those still within the legal obligations that they must be able to come online, regardless whether or not, again, their impact you work through it, or can you say say no we're not going to bring any more large scale DG Online if you have that ability. Mr. Chair, Vice Chair, Commissioner Lopez, again the DG interconnection circuit
that serves circuit that serves that area is improved or something like that. But, if there is gonna be a operational problem with a system, that system will not be connected until the company is sure that it's not gonna interfere with service to all of its customers. And and that's what the commission's rules are designed to to cover. And has there ever been a denial in the last, let's say, ten years? Do you know if you all have denied anybody from coming online, large scale? I don't know the answer to that.
I don't know if mister Rademacher knows the answer. Chairman, vice chair, commissioners, no. We're we're not aware of any denials that we've ever had to impose on a customer. Okay. Thank you. And just for my own again, I still kinda throw the new guy flag up. Sometimes I'm still trying to understand some of these acronyms. So, if if I understand this correctly, again, rest is used to make up the rest surcharge is used to make up the delta between the MCCP charges and the RCP charges. Is that what I inferred from where the rest is being used at?
I'm kind of an engineer, so formulas work from Mister chair, vice chair, yes. The the RCP charge is above the the market cost, and it's that delta that flows through the rest. The market cost flows through the PFAC. Okay. So I got that. And and RCP and you mentioned this before that RCP is really used. It's basically your version of a net metering, same same same similar or different? It is an export rate that is calculated based on looking at comparable, renewable generation by larger scale processes and it's something that work through in the value
of solar docket as a proxy for doing a detailed avoided cost statement. It it's a it's a basically proxy for an avoided cost statement. Okay. So instead of net metering where it's an evaluation of power generated from the user versus power used and using that delta in order to compensate the user, you're using RTP as just a straight payout for generation then? Correct. The that metering would bank the kilowatt hours and then give a credit Correct.
Right. Right. The RCP, is a payment for the the energy itself. And in fact, the RCP now On per month basis. On a per month basis. The RCP is, you know, if you calculate it, its its its number is close to the market cost. However, given the the 10% per year glide path, the actual rate that we're obligated to pay under our tariffs and the value of solar order is higher than that market cost. Right. Okay. But slowly moving towards that market cost. Yes. And again, one of these is like I kind of mentioned before. I again,
vote excuse me. Voted for, for us, you know, evaluating and repealing those rest rules, and I I kinda mentioned I I I I knew there was something lingering under the water that was gonna come on by this. The this is what I was kind of expecting. Finally, something coming forward and say, okay. Now we know there are impacts, some of this tangled web that we must, untangle, in order to to to make that make that happen. Your response on the, amendment, when it mentions there's a lot of stuff out of the control and unpredictability, is that in combination of you kinda mentioned it already,
but I wanna make sure I get clarity on this. Is it solely, again, the number of of consumers out there that may go solar, or are there other avenues of of other rates that are you're also trying to hunt impact? Yeah. Mister chair, vice chair, commissioner Lopez, one of the things that may impact the amount that flows through the rest is what that market cost is, the MCCG. I mean, there was a period of time where that market cost spiked due to the the winter storm, Yuri, some other challenges. So as a result of a higher market cost,
you know, the PPAs and the RCPs are kind of fixed and going down, that delta gets smaller. So there may be less rest surcharge that goes through in an environment where the market cost is pretty high. On the other hand, if that market cost goes down because of the abundance of natural gas and gas fired power is is a lot cheaper, then those fixed PPAs and RCP rates, there's a bigger delta and that bigger amount goes through the the rest.
A little bit. Do you wish you did? No. So, I mean, that that makes sense then because, again, that delta, again, after coming after Yuri, there was a massive you breast balance is drifting down because, again, there was a lot of, you know, the cost of the MCC was probably higher. Now that it's coming down, you're getting that bigger delta. So, again, a lot of moving parts. It's very complex. So I'm just trying to understand, how it all works. Right? The, you talk about again the the being against, again, the is this? Is there a dollar value you can assign? So going from, you know, adding a couple of years onto this,
and I and appreciate that you've been carrying a a a balance already on on your books for for a few years, and now it's it's kind of gone up. But is there a dollar value associated with extending again, allowing the collection? And I appreciate the the revised amendment saying, okay. We we we realize that this is an obligation that was kinda edicted and you have, are due, your funds. But what's the impact if it's if it's a couple years longer? I mean, are how big of an impact is that to the company? Yeah. Mister chair, vice chair, Commissioner Lopez, I'm gonna defer to the numbers guy.
Chairman, vice chair, commissioners, I don't I don't have a specific dollar amount I I can provide it to you. But what what I'll just share is is the the company carries the the carrying cost. There's there's no interest accrued on this bank that, gets flow to customers. So so the company carries that cost. You know, at our at our current cost of capital, debt and equity around 7% times 3,000,000, you you know, you could get to about $200,000. So so that's why, you know, we're willing to continue to carry this for a few more years as we have done the last few years,
but, going out six years just a bit too long in our our view. Okay. And then, also, it was mentioned in the amendment. And if I can go over a little bit more the hosting capacity rules that we talked about, you kinda mentioned, that staff. You mentioned that the difference didn't seem too different, and it kinda matches what is on the books right now. So, I mean, is is there a difference? And I'm kinda questioning on why that would also be added or changed and maybe for, vice chair Walden answer. And because my understanding, understanding, and I don't know if in the revise it did alter that,
that there was a requirement that anytime there were, they were over, the budget again, they would have to come in and do an exemption. We're rest filing. And I just wanted to make sure there wasn't incurred additional filings, staff time, and it was it was gonna create this this spiral of, continuing filings every month, every time, you know, if there was another, you know, say say, glut of of of solar, plants and DG coming on, then all of a sudden they'd have to be coming in. UNIC would have to be coming in every month. Staff would have to be responding to new filings every month. So, kinda wanna address that.
Chair, vice chair, commissioners, commissioner Lopez, I'll take a stab at it. As far as the amendment language, staff's understanding for the amendment language is if you're looking at that specific budget item for the RCP dollars, which is set at, like, $650,000 or around that, if the company anticipates for 2026 that they are going to be paying out more than that $650,000, they should make a filing into the docket to notify all parties including the commissioners that they are approaching exceeding that amount.
Given the increase installations, you're probably going to see a filing, you know, mid midsummer, I bet, from the company saying that they were going to exceed their budget. It doesn't have an action item for staff to take away. I think it's it it reads as an item that says, notify us when you're going to exceed that budget. So I don't see additional work for staff. I maybe I'm misinterpreting the amendment language. Okay. And that's the intention? Vice chair is just a notification of when they're they're going over. Yes. Okay. Okay. Thank you. Alright. That's all I have for now. Thank you,
chair. Alright. Thank you. Going back to the line of questionings about denying applications, can can you do that legally? Is that is there a scenario where you could deny an application? Mister chair, there the the interconnection rules actually has a cap on the size of the system you can put on your thing. It's it's a typically a 125% of peak load for the for the unit for residential. So there are if someone comes in and proposes to put in a giant system with the idea of exporting lots. You probably could deny that. But if it's within the parameters of the interconnection rules and there's not an impact
on the system that would adversely affect the performance. I don't believe we could deny it. Okay. Unless they don't agree to, you know, sign the I mean, there's a series of steps of getting it approved by the the construction by the city and things like that. So there are things like that. But it wouldn't be you denying it at that point. Yeah. Okay. Staff, do you have any comments on that? Is there is that an order somewhere that denies that or what's the legal limitation there? Which statute? Or Chair, vice chair,
commissioners. I I don't know the legal statute. I know what the interconnection rules say and and it pretty clearly says that you can't not connect an installation that meets the requirements of the interconnection rules. Gotcha. That's what I need. Thank you. And this this might be revisiting something Commissioner Lopez said, but what if there is an over collection before 2028, with this higher rate? How often will the rate be revised, by the commission if it needs to be adjusted because of changing circumstances or whatnot? Would you come in like the next year?
I probably would defer to mister Rademacher on on this one. There as you've seen, there's there's a lot of variables that we don't control, and it may be this at this day. But if we see something changing, even though we may be over budget for a little bit, it may be below soon. It's a challenge. Right. So but mister Rademacher probably provide a more eloquent response. Yes. Chairman, vice chair, commissioners, yes. We would make a filing, around the time, beginning to experience, an over collection. And I I'll just draw a comparison to what was approved on the consent agenda
with Buenas Electric with the PFAC. Early in in January, I believe, we we saw that there was gonna be an an over collection experienced. We weren't yet at a threshold where we had to notify the commission, but we could see it coming. So we went ahead and and made the filing. Staff did did their analysis and and was approved today, by the commission. So similar sort of procedure we we would go through. K. Alright. Fair enough. Thank you. I think that's all the questions I have. Vice Chair Walden, you want to move your minute? And Chair, I had one follow-up question if that's all right.
For legal actually, I wanted to know, must the company agree to waiving the carrying cost for us to prove an extension in time? It's a tough question. They are definitely going to incur cost with the extended time. The question then is is it recoverable? Is that what you're asking? Right. So if we're going from twenty twenty eight to 2031 and they're and I think they told commissioner Lopez is there it was around $200,000 a year, must they approve that for us to be able to extend it? Well, it that would be ideal because they could later make a claim for that or
try to make a claim for that. It would be ideal if they would agree to that. It's I think when I spoke to utilities earlier, they were not convinced that they're entitled to those carrying costs. But I wouldn't say they're guaranteed not to get it if they challenge that, but I don't have any real clear guidance from any court on this issue. Okay. So I'll ask mister Patton then. Is is it your understanding that the company would need to agree to waive carrying costs in order for us to accept accept an extension out to 2031? Mister chair, vice vice chair,
mister Marcus Peterson, I I think it's probably a a gray area. We've agreed not to to do so for three years. However, we are incurring some commission orders, I think we would be entitled to recover the carrying cost on that. And so those additional carrying costs would have be a rate payer have a rate payer impact in the future, I imagine. It it would. Perhaps nominal, but it there would be some impact. Yeah. Okay. And so I I understand understand the intent of, vice chair Walden's amendment, and I appreciate that. I'm I'm not sure about this gray area we're creating with the carrying cost and
the hosting capacity requirement. Seems like we already do have ability for information to come forward to the commission. Probably not an amendment I'll be supporting at this time. Sure. K. Just a couple of follow ups too. So, kinda got mentioned by, earlier that, you didn't quite understand the answer to on the if the ARAM were to go through or if you were to use that, on the next rate case, would this also be able again, we talk about the hunting impact that happens year to year with this along with many other things, you know, purchase power agreements and also fuel costs,
blah blah blah, would this also be something that, again, on a annual rate or annual review would be able to be ensure that there's not an over collection, under collection over a long period of time? Chairman, vice chair, Commissioner Lopez, US Electric has not even come in for a rate case and has not proposed. So maybe three years down the line before even one will be in place. But mister Rademacher is very familiar with the operation of it and how that would be handled, so I will defer to him. Okay. Mister Rademacher, have you thought about using an ARAM for some of this? Yes. It it it could be included with that and and operate just as as you
suggest. It would it could be looked at annually and under over collections with respect to these costs could be considered as part of that process. Okay. And, for commissioner Wallen, before you do propose the amendment, again, we talked about the current without the amendment, it's about a a a $3 dollar impact to, the average consumer's bill. With the amendment extending it out, is there a dollar does that drop to $2.50 to $2? Do do we know what the impact of that bill over instead of a three year period now over a five year period?
Do Do we know what that impact was gonna be on the bill? Do we know? Does anybody know? Open it up to the floor. Mister chair, mister Lopez, mister Rademacher may have a rough estimate that there again, there are a lot of variables that go in Yeah. Into that. So Yes. Mister chairman, vice chair, commissioners, I can only say that it would be lower. We haven't had time to recompute, everything that goes into recalculating those rates between the time commissioner Walden issued a revised amendment. It would be lower. I I can't really say how much lower.
Okay. Thank you. That's all I had, sir. Okay. Thank you. Mister Yes. Before I introduce my amendment, I have a question. So, you know, the the interconnect rules, this isn't a a federal requirement. It's state rules that they have to allow the residential rooftop top solar to collect. Do you do you know when the last time the interconnection rules were updated? Chair, vice chair, commissioners. It has been quite a few years, and I think they're probably slated for next year or the year after to be reviewed in our GURC process.
Alright. Thank you. So, I will move Walden revised amendment number one for discussion. So the amendment extends the timeline for collection of the under collected budget. UNSC was was given a budget, and if if I'm running a house household budget and I see that I'm gonna go way way over budget, I'm gonna have to immediately address that. So one of the things that's difficult about this this item and where I didn't want it on consent is that I think that for utilities when you're given a
commission approved budget then you need to follow that budget. When you saw this uptick in connection requests, that would have been the time immediately to to be proactive and and file that you're forecasting that you're gonna go over the budget. It's it's difficult to have somebody go over budget. It's several years later and then say, well, you have to approve this because our interconnection rules require you to do this residential solar and and do the buyback as this is a rate territory that already had,
increases. They have really high summer bills, and so that's the motivation for me in saying we need we need to extend this out and delay the recovery. As, you know, as far as the carrying costs, you've already shown that you can do that for a couple years and had admitted that because of the the fuel cost increase that you held off on on recovering this. So I don't think that a couple more years is going to to make a difference in that, but in looking at, you know, the rate increases and the cost for the service territory,
I do feel like we need to extend this out. This amendment is to allow more transparency and, as our staff had said on the host issues, it's just it's an additional safeguard and a transparency that that needs to be addressed immediately if that's forecasted. K. Thank you. I guess, comments above and beyond what we've already discussed? Maybe company first. Thank you, Mr. Chair. I appreciate Commissioner Walden's concern. I company is certainly cognizant of that and I think as Mr. Rademacher explained, this under collection was trending down and this is not sort of like the traditional
budget per se. And it ticked up in 2025. We did file to time it up to something we knew was rolling off in the interest of our customers, so they wouldn't have bill impacts. But we think that we've met our regulatory and legal obligations. And, we think what we proposed was reasonable given the circumstances. What do you mean, it's not like a traditional budget per se? Can you elaborate on that? The the traditional rest budget had programs that are incentives that were out there that were capped, and you could do that.
And then if you hit hit that budget, you know, you weren't obligated to pay an incentive if you went over that budget. Here, these are legacy costs that result from the operation of the rest and things that were put in place years and years ago that require the company to incur the cost pursuant to order and rule. And that varies. So it's, you know, the the rest of the charges is set at a level that is intended to cover those costs. Those costs go up and down due to a variety of factors.
And so it's it's not a traditional budget with programs or anything like that. It's sort of payment of legal obligations. Okay. Thanks. Staff? Chair, vice chair, commissioners, I I would agree staff would agree with what the company has has articulated. I would say that staff does not oppose the amendment. I think the additional language is not problematic, as far as the hosting capacity, and I think it's up to the commission as far as recovery of under recovered balances. So it's up to your vote on what you would like to do. Okay. Commissioner questions?
Any further questions? Commissioner Hobson? Go ahead. I'll go ahead and explain my vote then on this. I appreciate, Vice Chair Walden revising her amendment. Would not have supported the original version, not because I don't support the spirit of what Commissioner Walden is tackling, but whether we like the circumstances or not, the utility is legally entitled to recover these funds under our current system. And I think this under collection is a symptom of the value of solar decision, rest and the interconnection rules.
The commission is going to be dealing with these above market payments long after we're all gone from this commission. So moving forward, I think we need to look at how these above market payments are funded, not only for UNS, but for all of our utilities as they meet their contractual obligations and as we wind down rest. But we need to do it in a manner that doesn't shift the balance further against rate payers who don't have solar systems, and we end up creating a system where solar adopters are further subsidized by the
entire rate class. And with that, I will be supporting Walden's revised number one today. K. Commissioner Lopez? Yeah. Again, commissioner Thompson said it very well, but I'm kinda on the other side. Everything else on it, I agree with, but the extension out two more years, as, commissioner Liam Marquez Peterson mentioned, it's pay now or pay more later to me, and there's that gray area where the company can come back and try to get those financing dollars. And, therefore, we're back in a situation where they're actually recovering more money in over five years than over the three years. So that's my concern.
It's one of those unintended consequences. It's an unknown. We don't know if the company will or not, but, to me with the lowering, due to the, the fuel charge going down and I think almost $19 and then coming up 3 for this, I think that's a $15 overall savings. Actually my math math, $16 overall savings. I think this is appropriate timing in order to keep, the request as it was and and I won't be supporting the amendment. Okay. You know, I don't think I have any questions either. Vice chair Walden, would you like to move your amendment?
I move vice chair Walden revised amendment number one for a vote. K. Go and cast your votes. Okay, and by a vote of three yes and two no, with Commissioner Lopez and Commissioner Marques Peterson being the no votes. This item passes. Okay. Yep. And now, Vice Chair, will you please move of the item as amended? Just double checking the item number. So I move item number 2928. Oh, we're on 28. Alright, I move item number 28 for a vote.
As amended. As amended. K. Any final comments or questions? Didn't look like it. We're halfway through voting by the time I got that out. Alright. With a vote of five zero, we are good to go with that one. Let's see. Vice chair Walden, next item. Now it's item number 29. Now it's I move item 29 for discussion. Okay. And we already moved the items. So staff, please go ahead. Good morning, chairman, vice chair, commissioners. Matt Connolly on behalf of commission staff. This agenda item is an opportunity for the commission to discuss participating in the drafting
and filing of comments in response to the recently Federal Communication Commission's Notice of Proposed Rulemaking, or NPRM, regarding efforts to combat illegal robocalls by possibly revising the FCC rules and numbering policies. This action could take the form of assisting with the preparation of comments to be filed by the National Association of Regulatory Commissioners or NARUC, comments filed directly by staff, comments filed by staff in support of NARUC comments, or some combination thereof. Of. Over the past few years, staff has taken a proactive approach to the conservation
And responsible stewardship of numbering resources. However, staff still faces challenges with respect to the management of numbering resources due to, for example, such FCC policies as Direct Access, which allow an interconnected voice over Internet protocol company with no customers or business presence in Arizona to obtain geographically identifiable Arizona numbers. Staff is concerned that this has led to Arizona residents being on the receiving end of illegal robocalls. Commenting on this NPRM is an opportunity for the Commission to address responsible use of
numbering resources and reducing their legal use by irresponsible parties. This NPRM is seeking comment on such items as extending robocall certification requirements to all carriers, not just Ivoi providers, restricting numbering resale to a single level to gain transparency into the ultimate holders of telephone numbers that may be responsible for illegal robocalls how the FCC's numbering policies can address robocallers that cycle through large quantities of numbers, a practice known as number rotating and how the FCC,
with the further assistance of states, can better identify fraudulent use and misuse of telephone numbers. Thank you for your time, and staff is available for questions. Thank you. No public comment on this one, so commissioner Marquez Peterson. Yeah. No questions. But thank you, Matt, for tracking this NAIRU committee and this action. So and I'm supportive of this. No questions. Thank you. Thompson? No questions. Thank you, Matt. Vice chair Walden? I don't have any questions. Vice chair Lopez? I I do have questions. Free beer till lunch. So can you define what a legal versus illegal robocall and kind of after that,
you kinda mentioned that a number being used illegally, it can are you not allowed to use a number that doesn't reside within your area code? So if I'm in Colorado, I can't have a 602 number that's illegal. So, chairman, vice chair, commissioners, commissioner Lopez, it's kind of a two part question, so let me try and see if I can handle both parts. An example of an illegal robocall would be, let's say you go out online and you buy a widget from company x y z, and during the course of that purchase, you agree to receive a marketing call for from that company.
So, the next, you know, the next you know, you have your product and then maybe a week goes by and you get a call from and you found the caller identified, it says company x y z and you're like, oh, yeah. I remember this and you pick it up and as you pick it up, there's a little pause and then someone else jumps on the line. That's a robocall. Pretty much all my understanding that all telemarketing calls are handled in some sort of auto dialer robocall fashion. So maybe the next day you get a call from company ABC and you're like, and you pick it up and it's a company trying to sell you a product
you have nothing of no nothing about, you didn't ask for, you didn't purchase, you have no interaction with this company in the previous that's you didn't ask for that call, that's illegal. Or you might be getting a robocall from some kind of scammer. The famous the famous ones you may have heard are, company scammers that try to get you to give your personal information based around, buying something on the, health marketplace, the open marketplace. That's a common one. So those calls that you received that you did not ask for and in no way gave permission for, those are illegal call illegal robocalls.
Did that answer that part? So because I I I yes. But I'm kinda surprised because does that mean that every spam call I'm getting, that it was from somebody something that was bought and was agreed to? And if I opt out, does it become illegal? And then at that point? Yes. If you opt out excuse me. Chairman, vice chair, commissioners, commissioner, Yes. If you opt out but you continue to receive calls, yes. Those are technically illegal robocalls. And so the selling of numbers that also happens a lot,
for marketing teams, is that then illegal? Chairman, vice chair, commissioners, commissioner Lopez, according to industry regulate according to the FCC rules and industry guidelines, sale of numbers is technically illegal. There are companies out there that blatantly do it. Our favorite people, Number Barn, for example. But and the trouble is is that this goes on. It's pretty widespread, but there's been no enforcement. So that's where that's where the gap has occurred. But but it's numbers are viewed as a public resource.
We may think we own our number, but, technically, we really don't because it's part of the public resources. Not it's there are companies that treat it as a commodity, but it's really, like I said, a public resource. Interesting. Okay. Second part of the question of can I call from a different numb area code? So what what we've what's happening is that we have this direct access process basically works where a interconnected voice over Internet protocol company has the ability to go to the FCC and put in an application and say,
instead of getting my phone numbers from another carrier, I would like to have direct access to the pool of numbers that are available. I'd like to be able to go to the North American Numbering Plan administrator and say, hey. Can I have some numbers? And they and I've checked off the boxes. I've certified that I've used them responsibly. And so so the FCC put this policy in place, and so they we have companies that are allowed to do that. However, we have companies that come to this state. Like I said, they don't have any customers. They don't have a business presence,
and they're allowed to get Arizona numbers. They take those numbers, give them put them give them to some other use them in from some other location, and then use them to call Arizona customers. So if I'm if I'm an Arizona citizen, I'm gonna look at this phone call and I see, oh, it's from an Arizona number, I'm more likely to pick it up. So that's and that's the issue we that's the issue we face. And, also, we don't have visibility into, actually, where is this number actually ending up? Who's the who's how far down the path has it gone?
Who's this company that actually owns the phone number? We're having difficulty with that transparency. But is that practice then is illegal? No. It's not. Under today's rules, it is not illegal. Okay. It's highly irritating. Yeah. I got it. I got you on that one. Alright. Okay. Thank you. That answers my questions. Thank you. Thank you. Alright. I guess that's it. Vice chair Walden. Yes. I move item 29 for a vote. K. Please cast your votes. Mister chair, point of order. Oh, we didn't motion to vote to Correct. If you could state what your action is,
I think it's to direct, a a letter of support in, to to the revisions of the rule. Yes. I vote to approve a motion to direct staff to file comments to the FCC on behalf of the commission with regard to its numbering policies to combat illegal robocalls. Does that work? Better? Alright. Thank you. Do we read them? Now cast your vote, I guess, just to make sure. K. Everybody voted. Alright. So it looks like five zero that, item passes. Good luck, mister Connolly. Okay. Vice Chair Walden. I move item number 30 for discussion. Okay.
First is legal vision. Harpring? Judge Harpring? Yeah. Sorry. Yeah, it's us. Mr. Chair, Madam Vice Chair, Commissioner, Sarah Harpring for the hearing division. This recommended order would authorize the hearing division to file a notice of recodification with the office of the secretary of state that essentially takes the rules that are currently takes the rules for the line siting committee that are currently included in title 14 chapter three article two and moves them into a new chapter seven article one so
that the rules for the commission's practices and procedures can be expanded in a future rulemaking to, include numerous articles within chapter three. Okay. The only other thing that it does is change the cross references within the line sighting rules themselves so that they no longer refer to the old numbering scheme and instead they refer to the new numbering scheme. Super exciting stuff. I'm telling you. Alright. No concerns? Just none. Okay. Commissioner, questions, comments?
Yes. Judge Harpinger, so I, we read the letter from Aracia requesting to reschedule. It looks like you've already taken care of that in your revision. Is that correct? That is regarding the draft rules, the workshop to discuss the revised draft rules for the linesiding committee practices and procedures. It's actually aside from this. This is sort of an administrative thing that has to be done, to accommodate the commission's regular practice and procedure rules rulemaking. This substantively doesn't really do anything to the line siting committee rules.
But, yes, to answer your question, we did move the workshop. It's now going to be on August 26, and that was in response to Aracia, Sierra Club, and APS all asking that it be moved from May 12 to a date after the APS briefing presumably will be completed. Okay. Thank you for them. No questions. Nothing. Pleasure. So this revision began in the 2023. Is that correct? It I doubt it was the 2023 because it's got the number 0251.
Mhmm. So it was probably later than that. Then 2023? Because what it No. It would have been the But not the first quarter. The right. Okay. So I I just I guess, it's it's just a a point of of discussion with these rules. It's it takes so long to move the rules forward. And for some of them, it feels like we'll be out of office before the rules even get revised. Do you have any insight on why this one's been even slower than some of the other rule revisions? In the defense of this rule making,
the commission's general practice and waiting to be revised. That process has been in some form and place since 2018. Why does it take so long? The administrative procedure I process for rulemaking is not a fast one. There are a number of stakeholders. There are resource issues, within the commission and also outside the commission. And typically, cases that have, time frames, rate cases essentially, take priority over rulemaking for everyone who's involved in the rulemaking process.
So there are a number of reasons. I should say that the hearing division has very recently hired a roles attorney. She's right there. Her name is, Amanda McCool Zucker. Zuckert. And she's been meeting with members of staff to talk about what they need to have done with their roles. And the goal is to, make it possible for her to do the rulemaking activities that ALJs have been doing and also to a large extent that staff members have been doing so that there
is a resource and things can be done without as many constraints due to other cases that have to be administered. So did that answer your question? Yeah. It it does. And and it's not, you know, any any division or group that's responsible. It's just government moves at this glacial pace, and it's like a meeting of the ends or something in Lord of the Rings when you try to get stuff done in government. You know? So I I appreciate that insight. Thank you. Mhmm. Commissioner Lopez, I know you have questions. Yeah. Just one comment.
It goes without saying, but I'll say it anyway. I'm just hours from now. You better have more than one. I'll draw this out. Oh, that, because you mentioned about having to make the modifications. We I've seen this done in the past where we I I should have just seen the level. We made modifications to a segment within an ordinance over there, and we made the modifications within that said changes, but then missed prior chapters that, you know, did make references to line setting. So, again, just wanted to make sure that the whole, cadre of rules is also evaluated for any references to line sighting that that also
was adjusted to the new chapter. So I know it goes without saying, but I said it anyway. Trying to take up as much time as I can. I can talk about Star Wars for the next two hours if you want. You got the floor. I relinquish my time to this year. Alright. Thank you. Alright. Anything further? No? Alright. Commissioner or vice, you're welcome. Thank you. I move item number 30 for a vote. Cash votes. Maybe. Alright. And by a vote of five ayes, zero nays, this item has passed and I do believe that is the meeting today. So we are adjourned.
Thank you, everybody.