Alright. Welcome to our November 19 open meeting. We're gonna go ahead and call this meeting to order. If you could please rise for our invocation and our pledge. The, our invocation will be performed by commissioner Walden and our pledge by commissioner Lopez. Heavenly father, we are grateful for this country we live in, and we're grateful for the rain brought to Arizona to help us in these drought stricken times. We pray that we will be wise and be able to make good decisions today and bless everyone speaking to be able
to prepare what is in their hearts to say to the commission today, and we say these things in the name of Jesus Christ. Amen. Amen. Please join in reciting our pledge. I pledge allegiance to the flag of The United States Of America, and to the republic for which Thank you. Please be seated. K. Today, we have a number of items, on our regular agenda. We have two items on our consent calendar that are subject to forty two fifty two. Those items are items number nine and number 11.
If any party to those items would like to speak to speak, please come forward. Not seeing seeing any. Do any of my commissioners have any questions on those two items? Hearing none. And by the way, commissioner, or vice chair Myers is on his way in. He's stuck in traffic, as you could all imagine. We have do we have, like, colleagues have any questions on any of the consent agenda items? Mister Walden? Mister Marcus Peterson? Yeah. Mister Lopez? No questions. I've made it. Feel the devil. I'm gonna have. Do you have any questions on vice chairman,
do you have any questions on the consent agenda? Nothing with consent. No. Great. I do notice that we have, one proposed staff amendment for the Foothills, item. I will ask, commissioner Marquez Peterson if you would please move the staff amendment item nine for Foothills Water for approval. Yes. Chairman, I move staff amendment number one for item number nine for approval. Great. Thank you. Any comments or concerns? Staff, do you have anything? No? Commissioner Walden, mister Marcus Peterson, any questions? Lester Myers, commissioner Lopez? No questions. Okay.
Would you please, move the item for a vote? Yeah. I'll move. Done. Good. You wanna yeah. Mister Lopez. Okay. And that item passes five o. Vice chair Myers, please move the consent agenda as amended. I will move the consent agenda as amended for as amended for approval. Please cast your votes. And the consent agenda as amended passes five o. And with that, let the meeting begin. We will start with item number 13, vice chair Myers. Yes. I move item 13 for discussion. So we'll go ahead and hear from staff.
Hello? Good morning, chairman, vice chairman, and commissioners, Thomas Abshire on behalf of utility division staff. Agenda item 13 is motion to amend decision number seven eight five four three pursuant to ARS forty two fifty two for Arizona Public Service Company, which requests that the commission approve without an evidentiary hearing 230 kilovolt Raptor switchyard, install four monopole turning structures, and build two transmission lines each under one mile long to interconnect the Raptor switchyard to the West Valley Central line.
Staff is available for any questions you may have. Thank you. Thank you. And we'll hear from the company. Good morning, mister chairman, commissioners. My name is Jeff Allman. I'm here on behalf of Arizona Public Service Company. With me here today to, talk about this item as needed, outside counsel, Matt Durstein, Snell Wilmer, and our manager for strategic transmission, Jason Spitzkoff. We support the staff report, and we're available for any questions that you may have. Great. Thank you. Mister Stafford. Is this thing on? Yes. Alright. I'm just here if there's any questions from the from the commission.
Great. Thank you. And we'll start with, commissioner questions starting with commissioner Walden. Thank you. My question's for APS. So from the record, this, CEC has been expanded before and it was approved by the commission. I believe we're within our rights to do that. I just want to con to confirm that all the infrastructure contemplated by the original CEC and the subsequent amendments that are necessary to support the data center are being paid for entirely by the data center? Mister chairman, commissioners, commissioner Walden, yes. That is correct.
The upfront costs are being recovered. All, well, all of the infrastructure costs, associated with these facilities are are being recovered, and they have to be paid prior to the start of construction. And one more question. Are there any existing rate payers outside of the data center that will bear any cost of service to this customer? Mister chairman, commissioners, commissioner commissioner Walden, specifically with respect to the, the infrastructure in question, the the the build out necessary to interconnect these customers, again, all of those costs are are paid upfront,
by the customer, receiving service. In in connection with sort of more broad issues related to rates for service, You know, the the company is, as I think folks well well know, is in the midst of a rate case where we have a proposal, in place to modify, our our rate design for, data centers and in regard to growth and pursuant pursuant to that, that rate design proposal, that is intended to be a growth pays for growth strategy, to prevent cross subsidization. So our intent would be that pursuant to those new rates that take effect,
there would not be any cross subsidization. With respect to the current, rate structures and existing data centers that we currently serve, those are based on rates that were set during the 2021, 2022 test year. At that point in time, we had, you know, sufficient existing capacity that was, enabled us to serve those customers, and so there wasn't cross subsidization with respect to those existing data center customers. But, again, going forward, as additional data center growth materializes in the service territory, our proposal is that,
additional cost allocation mechanisms come into play. Those are proposed in the rate case and that those would prevent future cross subsidization. Thank you. Mister Marcus Peterson. Yes. Thank you. And thank you, chair. I I requested this item be pulled from the consent to regular because I had the exact same questions. Just wanted confirmation that, you know, the cost would be borne by the residential customers, and I think you've answered that, for commissioner Walden. So no further questions. Thank you, vice chair Myers. No no questions for me. Thanks. Mister Lopez. So I have kind of a complex question here that'll be easy to answer.
So the unintended consequences, which I I appreciate that, again, this data center or the, data center is gonna be paying for this switch yard, because of the interconnectivity. But understanding how the grid works, as mentioned, this is gonna connect to other substations. Correct? Commission mister chairman, commissioners, commissioner Lopez, this specific data center will only interconnect with with the new Raptor Substation. Yeah. That but the Raptor Substation is gonna be part of the overall grid of interconnected to all the other substation or two other substations in my understanding. Once it connects with the West Central Line,
it is interconnected with the grid. So kind of a general question. Again, unintended consequences is great. Again, the cost is not being borne by the residents, but does that mean that this raptor substation becomes exclusionarily, usable by the data center, or is it still becoming a shared resource of the tangled web that we call the grid of all the interdependencies of how electricity flows when substations do go down if so we never want them to go down, but if a substation were go down, is this substations, though, still gonna be on the grid as able to support in the region,
electrical electricity delivery beyond the data center? Yeah. Because I'm assuming that the data center isn't the only one that's gonna have, electrons pulled from that substation. Mister chairman, commissioner mister Lopez, again, this specific, substation is being constructed for the data center customer, to the extent it has impacts on the wider grid, I'm gonna defer that question to our manager of strategic transmission, mister Jason Spitzcock. Good morning. The, as mister Almond, stated, the switchyard, as it's intended today is only gonna serve the data center.
The wires that are going in and out of the switchyard are part of the larger grid. But in the future, if there's need to add additional wires, for additional connectivity, having a substation provides that opportunity. But as of today, just the design of it is for the data cent the one data center at that location. Okay. So to take it the other way, if the Raptor substation were to go down, the only impacted individual and or impact to to the grid would be this data center only. Would that be fair assessment? That's correct.
And that's how we do our planning studies, in general. For for sorry. Let me expand on that. Right. To, we we study contingencies on the system, to try to mitigate all impacts. Okay. Okay. Thank you. That answers my question. Thank you. Thank you. And I have no further questions. All my questions were answered. So, Oscar Myers. Yes. I will move item number 13 for approval. Lancaster votes. Item number 13 passes five o. And now, I will move item number 14 for discussion. K. We'll go ahead and start with
staff. Good morning, chairman, vice chairman, and commissioners. Adam Becker on behalf of utilities division staff. Agenda item 14 is the application of Harquahala Complex Holdco LLC for its certificate of environmental capability authorizing the Harquahala North transmission line project. The project includes a 500 kilowatt electric generation transmission line, 500 kilowatt electric transmission lines, and associated SwissShark facilities. The line signing committee held an evidentiary hearing on 08/15/2025 to receive evidence and deliberate on the application. Subsequently, the committee voted 10 to nothing to approve the CEC.
Staff is available for any questions you may have. Thank you. Great. Thank you. I'll turn to mister Stafford. Thank you, chairman, commissioners. I'm just here to answer any questions. Great. Thank you. And I'll turn to the company. Good morning, mister chairman. Commissioners, appreciate your time. Steve Wien with the law firm of Weissellers and Hendricks. And to my right, I have Daniel Minahan, who is the senior director of development for the applicant. And we are happy to answer any questions you have. Thank you. We'll turn to commissioner questions starting with commissioner Walden. No questions. Commissioner Marquez Peterson. Yes. Thank you,
chair. I also requested this to be pulled just because it question for mister Stafford. It is unusual for a line sighting committee to approve two, alternate corridors. I wanted to better understand why, the line sighting committee went that direction and unanimously. Yes. Chairman, commissioner Marcus Peterson. That was the request by the applicant. This is a significantly, build out area, in the West Side. It's it's gonna be about 3,000 megawatts of solar and storage and then potentially four fifty megawatts of gas. And so they needed to have the flexibility
to either put the lines, in the configuration A or B and then there's the additional two loops, alternatives that would be in the northern section to serve the industrial complex where the data center and a gas plant could be put in the future. So originally we thought it was going to be alternative a in its entirety or alternative b in its entirety, but the issue became the route South Of Camelback Road, between that and, Thomas Road. They said, well, we need the flexibility to either put it along 507th Avenue or Harkahala Valley Road
regardless what we do North Of Camelback Road. So we provide them the flexibility because they still have to deal with the issues of, where to get the lines because it's you see the, the Red Cross Hatch area, that's where the the, the generation sites are. And I believe there's one project, the Belmont that they would one of the issues would happen to cross that solar array. But as we know, that one is kind of on hold because the key position was that it had to APS has been allocated to a different project and that one is all is moving forward instead of the the Belmont.
Okay. Thank you, chairman. I appreciate that. No further questions. Okay. Vice chair Myers. Nothing from me. Thank you. Commissioner Lopez. No questions. Chairman, if I may. Sure. In reviewing the CEC for today's meeting, it appears to me there's there's a couple typos in the CEC itself. If you you go to page three, line 13, it refers to switch yard S-thirteen in zone two, that should be zone one. And then on the Page 11 in the second finding of fact or conclusion law, after the word certificate on line six, there's a t missing.
It should be the, not he project. Yeah. Good catch. Staff get those changes. Tom, do we need to have an amendment? That'd be preferable. Okay. I'll make that motion. So we have a we have a, verbal amendment to to make the changes that were identified by, Adam Stafford for life-sized chairman. All those in favor give our staff time to catch up with us on this one. And cast your votes. That amendment passes five o. And then I will move item 14 as amended. Thank you. And item 14 passes five-zero.
Thank you. Thank Thank you, chairman. Commissioners. Now I will move item 15 for discussion. Yep. Changing of the guards, so it'll take a minute. We'll go ahead, and we'll start with staff. Good morning, chairman, vice chairman, commissioners. Adam Beckerman on behalf of utilities division staff. Agenda item 15 is application of El Rio Soul Transmission LLC for certificate environmental capability authorizing the Rio Soul to Saguaro Interconnect project. The project includes the construction of 500 kilovolt transmission lines and an associated switchyard located within Pinal County, Arizona. The line sighting committee held an evidentiary hearing on 08/25/2025 to receive evidence and deliberate
on the application. Subsequently, the committee voted seven to zero to approve the CEC. Staff is available for any questions you may have. Thank you. Good. Thank you. And we'll now hear from, Adam Stafford. Thank you, chairman, commissioners. I believe what we're probably here to discuss today is the complaint by mister Els. I, sent my response to the inquiry from commission staff. If you have any questions for me that weren't addressed in in my response and in the subsequent memo, I'm happy to answer them. Thank you. Renner from the company. Thank you, mister chairman, members of the commission. Bert Akin of Akin Law on behalf of the applicant,
El Rio Soul Transmission LLC. We're excited to be here before you today. With me is Cindy Freeman, director of environmental permitting for the applicant, And, we support staff's form of order one to approve the CEC unanimously approved by the commit committee, and we're here to answer any questions you might have. Thank you. Thank you. We'll go ahead and go to public comment. I do see that we have three individuals online. We'll start with Peter Els. Peter, are you there? Hello. Can you hear me?
We can. Thank you. Go ahead. My name is Peter Ralph. I live in Pinal County near the town of Mammoth, Arizona, and I speak in opposition to approving the latest permit application my comments about the procedural violations during Riosol's recent application process have been sent twice to all commissioners and are now part of the docket, and I intend to submit these comments to the docket also. Condition 30 in Riosol's 2022 state permit, which is CEC 171 b,
states that if the applicant seeks to modify the terms of its permit, it shall provide copies of such a request to all parties involved in that 2022 permit process. Riosol is proposing a significant new addition to their project before construction has even been initiated on any part of the project contrary to what general counsel Van Flynn said to the commissioners in his memorandum yesterday. The docket included the 2,022
modifications to Riosol's permit 171 B is not separate and independent from Riosol's new docket for CEC two forty nine and do not involve matters that will quote stand or fall on their own merit. The Riosol project authorized under CEC-171B has not even initiated construction and obviously the new addition to it under the proposed CEC-two 49 will not stand on its own merit if the larger Riosol project is not constructed,
in which case it would then make Riosol six mile connection to the Saguaro sub station of Bridge To Nowhere. The proposed CEC two forty nine is indeed indeed depended upon in a modification of the larger Riosol project. Thus condition 30, the notification requirement in CDC-171B applies in this situation. Even if the new addition to Rheosol is handled under a new docket, it should have been formally linked to the docket for CEC 171 B.
There is no such link specified in the docket for CEC 171 B. The parties to 171 B should have been notified of the new Riosol modification. Additionally, the attorney for Riosol denied the existence of ongoing quote related litigation to the new extension of the project or to the project as a whole. This is false. Condition 27 in Riosol CEC 171 B requires conducting a cultural landscape study before initiating
construction. This condition has been on the record since 2016. It states that the cultural landscape study shall be conducted prior to construction and yet there was no mention about complying with that condition during the discussion about Riosol's construction schedule. This is what happens when interveners are not present in a line siding hearing. This condition cannot be voided by simply denying its existence. If Riosol wants to resolve their accountability for complying with condition 27 in their CEC-one
171 B, that can acknowledge it in modification specified in CEC-two 49 and work out a solution with attorneys for the tribes involved in the federal lawsuit and with the attorney for the the related Arizona Corporation Commission docket number LO00000YY24Dash0042. Mister Els, because you because you weren't an intervener in this case,
you're typically held to three minutes. But I'm gonna give you some leeway if you could start wrapping up. That'd be great because the lack of intervention was a major problem that I'm identifying. Condition 30 in CEC one seventy one b did not make notification to the parties optional at the discretion of the applicant and the line siding chair. As documented in my recent comments, the line siding chair in Riosol's new permit process acted as a project proponent in 2022. There were indeed modifications in 2022,
including the addition of two new conditions for both the Sunsea and Riosol projects, conditions that I was personally responsible for introducing as an intervener. The line siding chair was fully aware that other parties to the 2022 Riosol permit would have a compelling interest in Riosol's new set of modifications. As an intervener in 2022, I sat near him as he vigorously advocated as an intervener in favor of both projects Mr. Elsz. And Rio.
I'm gonna ask you again to please start wrapping up your comments. I'll give you about thirty more seconds before we cut you off. For all these reasons, the ones that I've stated so far and the ones that I did not have an opportunity to state in front of the commission, the recent line siding process was invalid. Staff sample order number one approving the CEC emerging from this faulty process should not be approved by the commissioners. It is up to the commissioners to decide whether they will endorse this faulty process. I urge you to adopt staff
sample order number three to deny the proposed CEC now before the commission, which would provide an opportunity for interveners and other nonconsulted stakeholders to participate in a possible future line siding process for the new modifications to the Riosol project. Great. Thank you, mister for considering my comments. Thank you, mister Els. Mister John Welch, looks like he's also online. John, are you online? Mister Welch, if you're online, you'll need to unmute. We'll come back to mister Welch.
Joe Rain. Joe, are you online? Joe Rain, if you are online, you'll need to unmute. I'll go back to mister Welch. Are you online? Okay. And we'll move on. Maybe we'll come back to them a little bit later. So before we begin the commissioner questions, I just wanted, you know, I know that our, we have a lot of letters, that were, documented on this item. And, the commissioners have have read those emails and those letters, from the public on this matter. And, so in response, I would love to have our general counsel weigh in. I know that our general counsel did,
prepare a memo, that I think is essentially an opinion on the three key components of the allegations or questions that were presented in communications with the public. And, again, that docket has been filed in the in the that document has been filed in the dockets as well. So I would turn to general counsel now. Tom, please give us your opinion. Chairman, commissioners, to elaborate on the, memorandum that I did submit, I did investigate mister Ellis's concerns, and talk at length with, the chairman of the linesiding committee and with,
the counsel for for the applicant to get the factual underpinnings of this, just to see what their thoughts were. And, ultimately, I think where there's a disagreement at the beginning with mister Els is that these are identical. If these are identical, then he would have a point that the service list for c e c one seven one could have been used or should have been used. But in talking, the line sighting committee itself did not agree with that. This is a separate application for a separate project, has its own service list. Even if it's we have a rule that requires
notification to people within a certain geographical area. That notice was given, complied with the law in that respect. So only if the two projects are conflated would the notice issue be a problem. They are not to be conflated. They do stand alone and ultimately all projects like this do intertie. And if that were the test then there would be then every CEC would ultimately be related to every other CEC and that's not been the practice and it wouldn't be recommended.
As to the, allegation that the chairman had a conflict of interest from his prior representation, under our rules of ethics in Arizona and under our own conflict of interest law as state public officers. I didn't find any evidence that would support a conflict of interest. He's entitled to the representation he had in 2022 was not related to this, and he stated he had no confidential information on the current project that would prohibit him from voting and participating and there's no evidence to the contrary.
Thank you. We'll go ahead then and go to Commissioner questions starting with Commissioner Walden. I don't have any questions. Commissioner Marquez Peterson. Yes. Thank you. Thank you to our general counsel for his, legal opinion. And wanted to ask, Riosul, I guess, your, comments on the allegations of the interconnections of the two CECs. Chairman Thompson, commissioner Marquez Peterson, thank you for the opportunity to address that question. I think general counsel's analysis is spot on, complete, and accurate. These are two separate projects. What you have before you for approval is a six mile Genti,
that includes a new switch yard in an area with extensive electrical infrastructure to interconnect at the Saguaro Substation which includes the Saguaro Power Plant. What you don't hear in public comments is any concern with respect to the substantive merits of this proceeding. This six mile transmission line is excellently cited. Again it's an area of existing infrastructure it interconnects it so well and it is some distance from nearby residents. Why is it a different project?
Rio Sol continues to be Rio Sol. The project originally approved in 2016 with the Sunzia project that I brought before this commission had two lines. Line one and line two. Mister else appealed that. He appealed the commission's approval of that, and the courts ultimately upheld that. In 2022, we sought bifurcation, for a few reasons. A primary reason was to allow for separate ownership of line one and line two. Mister Ellis appealed that,
appealed the commission's decision to approve that, but ultimately the courts approved and affirmed what the commission did. And so in 2022, what you have post '22 is two CECs, one seventy one a for Sunzia, Zia, which is construction is complete, and one seventy one b for the AC line, which is now called RioSol. They have separate ownership. Those two lines have separate ownership. 171 a owned by Patter, 11 b by El Rio Soul Transmission.
That's by way of background. El Rio Soul's project, Rio Soul, continues to be what it has always been. It is a project that in at least in Arizona under the jurisdiction of the Commission runs from the Arizona border for 200 miles to Pinal Central. Nothing has changed. That project remains what it was in 2016 as amended in '22. When you ask yourself, would you bring an amendment as opposed to a new project and I do this,
I look at past precedent and I look at what makes sense. We're not changing Rio Soul. All we're doing is providing another interconnection opportunity for the AC line to Rio Soul. And for that, the proper approach, as general counsel pointed out, consistent with past precedent, is to submit a new CEC, and that's what we did. And I I'm glad the memo noticed the extensive public notice. We complied with all legal requirements, and we went far beyond legal requirements with respect to additional supplemental notice to nearby
residents who might actually be affected by the project before you. This project had four virtual houses, two in person open houses, extensive mailers, extensive opportunities for public comment. So we think and the the committee agreed there was a robust first class public outreach project process for the project before you. And for those reasons, we would, ask that you approve the committee's decision. I hope that's responsive. If you have further questions, I'd be happy to address. No. Thank you very much. No further questions.
Vice chair Myers? Nothing from me. Thank you. Mister Lopez? Just a statement that, again, I under understand. Again, reading through the the docket here and the and and the questions that mister Els had, I I I I can appreciate and understand where it's coming from. But, again, in the end, I I I, I disagree with the stance, and I do agree with, staff and the findings of, general counsel. So just wanted to make statement. Thank you. Thank you. For myself, I, you know, I I, I think, Tom, you answered a lot of my, previous questions, from reading the letters and the allegations,
filed to the commission. And and I'm very sympathetic to, to mister Ellis, you know, but being a victim of of, perceptions of conflict of interest or perceptions of ethic violations, don't always aren't the same as actual violations and, under the law. And so, you know, I understand Mr. Els' frustrations and perhaps there's more that this body could do in the future for items that, you know, for the notifications, for new docket items and so forth,
just out of an abundance of transparency when you have something that's tangential to another item, that that, perhaps we can do a better job of of putting that out there. I know that this is a very, cumbersome and and very confusing, process. I understand mister Els' frustrations, but, you know, when it comes to, renewable projects, many of these decisions are are handled at the local government level, not necessarily at our level. Many of the decisions are are are done by counties and local governments.
But, I'm, you know, it's with, I think with this commission, you know, the we don't have, any jurisdiction over non thermal projects, which frustrates us sometimes. And so, just wanted to, you know, put that out there that there there was a bill this past session that would have given us more authority over renewable projects, you know, it's it's a it's a shame because I I do share a lot of the same concerns that were expressed by our public and by the speakers. So with that, I will ask vice chair Myers to please move the item.
Yes. I move item number 15 for approval. Go ahead and cast your votes. Dang it. Fat fingers. And that item passes five o. And now I will move item 16 for discussion. This is Arizona Water Company, and we will start with staff. Good morning, chairman and commissioners. Helen Fitzgerald on behalf of a commission staff, and this is regarding application of Arizona Water Company, which requesting approval of a SIP Mechanism social.
Staff has reviewed the application and recommends approval of the SIP Mechanism surcharge as specified in the staff memo and proposed order. Staff is available for any questions. Great. Thank you. We'll go ahead now and hear from the company. Thank you, mister chairman, vice chair Myers, commissioners. Megan Grable on behalf from Osborne Meledon, on behalf of Arizona Water Company. And with me at council table is its vice president of regulatory, Nick Liu.
We thank staff for their good and very expeditious work and, appreciate it and support the staff report as written. Great. Thank you. And we will go ahead and turn to commissioner questions starting with commissioner Walden. No questions. Commissioner Marquez Peterson. Thank you. And thank you for, this thorough application. I just had a question on whether the company could kinda give a brief summary of the categories of improvements that were made because there were a lot of lists of different improvements that were handled. Thank you, mister chairman and vice mister vice chairman, commissioner Marquez Peterson. Generally, the replacement projects were for water mains and service lines.
That was the 99.9% of the projects. Okay. Okay. Thank you. Let me see if I have any other questions here. No. I think that concludes my questions. Thank you. Thank you. Vice chair Myers. I was able to get all my questions answered before the meeting started, so I'm good. Great. Thank you. Commissioner Lopez. I have no questions. Thank you. And I have no questions either, so Commissioner Myers. Yes. I move item number 16 be approved. Item number 16 passes five o. And now, I will move item 17 for discussion. Alright. Looks like we have the changing of the guards in place,
so we'll start, with our judge. Thank you. Chair, Vice Chair, commissioners. Good morning. Charles Haynes from the Hearing Division. Item 17 is the consolidated applications of Bench Ranch, Pine Meadows and Verde Santa Fe for rate increases and consideration of rate consolidation. The companies are waste water utility service providers with Bench Ranch and VSF located in Yavapai County and Pine Meadows located near Payson in Gila County. Combined, the companies constitute approximately a Class C utility. The company is proposed to consolidate into a single entity by absorbing Bench Ranch and
Pine Meadows into Verdi Santa Fe, which will then be known as Verdi Santa Fe consolidated. Subsequent to the filing of the applications, and staff's filing of direct testimony, the parties entered into settlement discussions and that produced a settlement agreement resolving all disputed issues in the case. The settlement agreement, adopts the proposed consolidation of the companies into VSF consolidated. Additionally, the settlement adopts a revenue requirement of approximately $780,000 an approximate $111,000 increase over test year revenues for an approximate 16.6%
increase. Settlement agreement uses a 9.9% cost of equity applied to a capital structure composed entirely of equity. The settlement agreement adopts a rate base approximately the same as the company's originally proposed rate base of $926,000 It does incorporate staffs recommended adjustments. The settlement agreement adopts a revenue requirement that is approx only $235 higher than staff's direct case recommendation and represents a $66,000 decrease from the company's original proposal.
The settlement agreement also adopts the lesser of a $100,000 or actual amount incurred for rate case expense, to be recovered over a three year surcharge that will automatically terminate upon, the recovery of the full amount. And I will note as of the time of the hearing the companies, acknowledge that it appears that they're closer to approximately $90,000 of rate case expense incurred as of that time. Adopting the consolidation as proposed, is expected to produce the following rate impacts. Within Bench Ranch, it would be a decrease from the current monthly bill of $79.8
to $55.25 in Pine Meadows it would also be a decrease from the current $71.74 per month to $55.25 in VSF it would be an increase from the current $43.24 monthly bill to $55.25 The ROO approves and adopts the settlement agreement regarding consolidation. The ROO finds that consolidation is consistent with the Commission's water policy encouraging the consolidation of utilities and that it will benefit customers. The ROO further finds that the transfer of assets and CCNNs of Bench Ranch and
Pine Meadows to VSF consolidated as part of the consolidation effort is in the public interest. The ROO further finds that it is just and reasonable and in the public interest for the Commission to approve the settlement agreement. The BREW also, it authorizes VSF to implement the agreed upon rates for wastewater service and authorizes VSF to recover the agreed upon rate case expense with the requested surcharge. No exceptions were filed and there are no amendments. I am available for questions you may have. Thank you. Great. Thank you, judge Haines. We'll turn to staff. Good morning, mister chair, vice chair,
commissioners. Britt and Baxter for utilities division staff. Staff supports the rules written and is available for any questions. Thank you. We'll turn to the company. Thank you. Good morning, chairman, vice chairman, commissioners. Jay Shapiro from the Shapiro Law Firm on behalf of the three applicants. We also support the rue. We supported the settlement. We appreciate staff's efforts, and the judge's efforts, and we're also here for any questions you may have today. K. Thank you. We'll go to commissioner questions starting with commissioner Walden. Thank you, mister chair. So, this is for the company. My first question is I have concerns about the noncompliance status,
of the wastewater treatment plants. Can you remind me how long you've owned these water companies? The there are sewer companies and, I'm sorry, chairman, vice chairman, commissioner Walden. There are three sewer companies. Voice. Yeah. And they've been owned, I think Bench Ranch has been owned for over twenty years, Pine Meadows for roughly the same period of time, and Verde say Verde Santa Fe for a little over twenty years, probably closer to twenty five by now. Yeah. So all all of those systems have issues, with compliance,
you know, issues with e coli. Can you let me know what is your status with the ADEQ discharge permit limits, and, what are you doing to bring your systems into compliance? Chairman, vice chairman, commissioner Walden, let me let mister Williamson, who's the CEO of JW and the president of each of these companies, address those compliance concerns. Commissioner, vice chair. Appreciate the question. Commissioner Walden. Yes, I think the Verde Santa Fe and Pine Meadows compliance issues have been fully resolved. Bench Ranch is in the process of amending their APP Permit to address the issue
there which relates to flows and the APP permit therein. So we are in the final stages of doing the on-site, closure work and then we'll be getting the permit amended in the next two weeks. And and just to add to that, Pine Meadows is a matter that arose two two and a half years ago now. There was a trespass. Somebody literally dumped their waste into our system, and we've been dealing with that with ADQ ever since. That's where a consent order came from. Much of the noncompliance has been because as long as that consent order is unfulfilled,
we'll remain in that status. I I would characterize us as a victim, and we've tried to resolve things with ADQ, and we have, and and improvements have been made. And that's why I think mister Williamson's indicating that that matter is now passing into compliance. But that is that is the story of what happened with Pine Meadows. It's just an unfortunate happened with Pine Meadows. It's just an unfortunate incident where somebody else decided to tear open a manhole and dump sludge into our system. Wow. Thank you, and thanks for the the additional information. So my next question is about the,
return, the return on equity. So it's at 9.9%, and normally, like, we're looking at the row on a case by case basis, but the rule on page 12 and paragraph 70, it says that staff based the recommendation adopted in a settlement agreement, on an average of what's been recommended in the last four cost of capital recommendations and not what was ultimately determined by the ACC and their respective decisions. So, like, this question's for staff, and then I'll also, ask judge Haines about it. So,
normally, like, the the row is determined, you know, based on debt and risk, the revenue requirement and the risk for the company. And this company is not applying for a debt equity structure, and they're a 100% private equity. And so I was just wondering if you have, information about where you came up with the the row of 9.9 because it it does seem high in in looking at, the risk of of this entity. Mister chair, vice chair, commissioners, commissioner Walden, so what you're referencing is normally in a larger company rate application.
There would be a full cost of capital analysis, both proposed by the company, and then we would respond with the expert witness of our own. These are all relatively small utilities individually. So the company did not propose a full cost of capital analysis. So we didn't either. So in cases like this, what we do is we take the last four or five recommendations from our witnesses and average those to use them as sort of like a proxy. So that's what we did in this case. The ROE in the settlement agreement was a negotiated position.
So I won't go into too much detail other than with any settlement agreement, there's give and take on certain issues to land in a place where all of the signatories are comfortable. Thank you. And then for judge Haines, do you have any thoughts about the road determination that was done in this settlement? And part of the part of the reason I'm bringing it up too is I think we had, you know, similarly, we saw the Cactus. We had a company that was a 100% equity. They were actually applying for a debt equity structure. That one,
we came to 9.8. This one is has less risk. The systems aren't, nonviable like what we saw with the previous water case. So Yeah. Yes. Thank you, chair, vice chair, commissioners, commissioner Walden. So I'll I'll take staff's response and take it backwards. First is a settlement agreement. And so the number that they arrive at for purposes of the settlement is is a product of the give and take. One, it's what they thought they could get passed and two, it's it's what they needed to secure a deal. So it's not necessarily gonna be determined on the basis of principled analysis of what
the appropriate ROE is. It's what they felt among all of the issues that are on the table was necessary to get to something that is on the whole an acceptable compromise of all the issues. I would note that when staff says that it produced its original recommendation, based on an average of prior recommendations, staff is correct. That's not unusual for staff to do something like that. We we do recognize that there are resources that staff and the companies, bring to bear in an application and they should try to marshal those as appropriate to the kind of case they're dealing with. Sometimes it's just understood that staff will do what it needs to do to create
a negotiating point and I would observe that their original original recommended ROE was actually lower. It was 9.64. The settlement comes to a approximate midpoint between the company's original of 10.5 and staff's original of 9.664. So I don't want to speak for staff but to a certain extent you could say it did kind of serve the purpose it did bring down what the the ROE was without having to get engaged in a fight bringing in actual experts to prove up what it actually should be. If you're going to drill down on on the,
the truly principled basis of what it should be. So I don't know if that answers your question, but that's why I it's like, I accept that it is what it is. It's a class c utility, and this is what they they were able to do with the resources they have available. Yeah. That was that was helpful especially explaining how you got to that that midpoint figure. And, this is really amicable settlement agreement. The rate design was very nice, so I don't wanna argue about the settlement agreement. I think you did a good job on that. Just wanna make sure that our our row is is is fair,
and we're factoring everything into, you know, what what should be considered in making that determination using it as a negotiating tool makes sense too. So thank you. No other questions. Commissioner Marquez Peterson. No additional questions. Thank you. Vice chair Myers. I do have one follow on. One of the advantages of going later in the list is other commissioners ask all your questions for you. But there's an an optics thing here that I I just have to ask the question, and that is, all the the companies seem to be out of compliance with ADEQ until right before
or during the rate case. The it seems very coincidental. Can can you maybe shed some light on that? Yeah. Chairman, vice chairman, you know, I I think sometimes circumstantial evidence is just that. It's circumstantial. It's just coincidence. These are small companies. I know, judge Haines is referring to them as a class c, but there's still a couple $100,000 of revenue below that. One of them has 35 customers today. One of them has a 100 customers today. They're small remote systems. Sometimes the way our regulators, not the commission, but work is that once you're in noncompliance,
it takes time to roll off. So, you know, if you have a problem, it can take twelve months to flow through your system and get clearance. There is no effort to bring compliance to bear based on rate cases or anything else. It's just the the ongoing nature of running day to day systems, the difficulty sometimes keeping all the paperwork straight, making How the test done, I think, what we can assure this commission is that none of these non compliances have been ignored, none of them have been or ever were,
a threat to public safety other than the trespass I discussed earlier, which is again, something that we and ADQ responded to and have been dealing with for a couple years now. So, you know, I don't mean to diminish noncompliance. We take it seriously. We're not happy with the few blips on our record. We're working hard to get everything in consistent compliance, but I don't think that there's any public health risk or there's any effort to do anything except stay in compliance day to day, and we're just seeing some coincidental and unfortunate timing.
Okay. Well, I guess, you know, obviously, I'll take your word for that. I just wanted to make sure that that was pointed out that that it wasn't going unnoticed. So thank you. Mister Lopez. Yeah. First first kind of question or point of clarification, commissioner Walden asked about ownership of the of the utilities. My understanding is that you're that JWU is a recent purchaser of the utilities that PIVO was prior, and that had been for well over a couple decades. But that JW is just a recent purchaser, so you didn't have that history before. Is that correct?
No. Well, the recent acquisitions by JW involve other companies, eight other water and sewer companies. These three are actually two of the three original companies that were owned by JW. They were originally owned under the company, known as Pivotal Management that was a a a predecessor to JW. Oh. JW absorbed Pivotal. Mister Williamson was in both companies. So we eventually merged JW and Pivotal. That's what brought our PACE and system, Navajo system, which were in the JW side, in with these three systems,
and then, last year we bought eight systems that were the former Robson systems. What we have testified to in recent proceedings is that all of these systems will be consolidated over time. We hope by 2030 to have all of our water companies under one, JW water umbrella. By 2031, we hope to have all our sewer companies or 2030, 2029, 2030, have all of our sewer companies under one umbrella. And then after that, we hope to send me off on my merry way. So there is a long term goal to and that would allow,
back to commissioner Walden's concerns, that would allow these entities to begin to accumulate a more balanced capital structure. These three companies are so small, that they just haven't had the opportunity yet. But now that we've grown and these companies are part of a growing entity, we'll be able to fund them with debt going forward as part of a consolidated entity. In in under JW Holdings. So, again, just Everything I said thank you for that clarity because that provided so with with, you know, how Pivotal fits into that with JW, they that's kinda that that clarifies it a lot. Thank you.
Yep. Pivotal's gone, just to be clear. Okay. Pivotal no longer is Existing. Is a is a holding company. Yes. It's now all JW? Correct. Okay. And then and with these, so is the management then of these utilities, is that shifting at all? I mean, was there prior to, again, the issues that have been discussed about? Is there now a changing of the guard at at these other three utilities, or is it kinda not necessarily status quo, but again, you're again, with with new leadership does come new directions. But, is management utilities also changing at all?
Chairman, vice chairman, commissioner Lopez, not on the ground. You know, the management team has grown. We have a much broader rates team, a much broader customer service team because we've grown from 10,000 to 50,000 customers, but the people on the ground haven't changed. And this is a tough area. I mean, finding qualified people, to run systems in these remote areas is not always easy. So you try very hard to keep those people and keep them doing their job. And right now, everybody that came with ropes and still with us for the most part, and all of our prior employees are with us,
and the management teams have kind of merged together. So on the ground, no significant changes, just more management on the whole above. Okay. Alright. Perfect. That answers my question. Thank you. Thank you. I I don't really have any questions, more of a comment. And, I I just like to acknowledge that this is an example of I think when consolidation actually works, fairly well for the customers. There's, you know, no camouflage underground water tanks. There's no subsidizing large users. And there's no dramatic rate shock to the consumers.
And so kudos to to judge Haines and all those involved staff for all that you did. And with that, mister Myers. If you don't mind, a a quick comment as well that I've been a staunch advocate of not consolidating, but these are three systems that are in very close proximity. And and, I I have to I just wanted to say that I completely agree with what the chairman just said, that this is a great example of how it does work. So thank you all for making that happen. And I move item number 17 for approval. And, item number 17 passes five o.
And, now, I will move item 18 for discussion. So 17, we just did. 18 for discussion. Okay. We'll go ahead and, hear item number 18 starting with, judge Mater. Hey. Good morning, mister chair, commissioner. Julia Mater on behalf of the hearing division. This matter involves a rate financing application for Emperita Water Company, a class e water utility providing service to approximately 80 customers eight miles west of the city of Benson. 12 written comments were received in opposition to the applications, and the company's current rates were approved in October 2012.
The recommended order adopts the fair value rate base proposed by staff of $334,425 less than the company's revised proposed fair value rate base of $381,575. Staff's adjustments include a decrease to plant service due to excess capacity in the company storage tank and removal of a regulatory asset attributed to a storage tank that staff characterizes as prematurely retired. Staff adopted Emperorita's proposed test year operating revenue of $52,452.15
dollars. The recommended order adopt staff's adjustments to operating expenses as revised and staff's reply and finds that for the test year, Empirita had total operating revenue of 52,415 and total adjusted operating expenses of $72,749 resulting in a test year operating loss of 20,334. The company proposes a 7% rate of return on total operating revenue of 104,278, and staff recommends a revenue requirement of $98,567,
an increase of about 46,000 or 88% over test year revenue. And that was based on a seven and a half percent rate of return in producing operating income of about $25,000 cash flow after debt service of $7,430 and a DSC of 1.28. The recommended order adopts a nine percent rate of return instead of the seven and a half percent recommended by staff, disagreeing that staff's recommended revenue is adequate for debt service and contingencies.
The recommended order adopts a revenue requirement of a 103,665, an increase of 51,250 or 97.8% over test year revenue, and operating expenses that result in operating income of $30,000, cash flow after debt service of $12,503, and a DSC of 1.44. MPRETA proposed a total rate case expense of $20,000 to be recovered over five years through a rate case expense surcharge in the amount
of $3.97 per customer per month, and staff recommends approval of a total of 18,000 to be recovered over five years with a surcharge of $3.61. The recommended order adopts staff's recommendation. Empirita's financing application sought authorization to finance refurbishing its storage tank, equipping and connecting a well, and the installation of radio read meters. And Brita requested financing from WIFA and approval of a debt service and debt service reserve fund surcharge. Staff recommends approval of $269,250
from WIFA at an interest at an interest rate no greater than 8% and for a term not to exceed twenty years. That recommended amount is based on approval of the meter replacement project and the water storage tank inspection refurbishment, but not for the well number three project. Because it's proposed revenue results in a DSC of 1.28, SAFT did not recommend a loan surcharge. The recommended order approves the financing, finds that with the adopted revenue, no surcharge is necessary to service the WIFA loan. The recommended order requires the company to file a rate case in five years to
ensure that the revenue requirement and resulting cash flow remains reasonable and not excessive. Staff noted that the company has existing unauthorized debt in the amount of, $18,900 incurred as a COVID economic injury disaster loan, and staff recommends that the company file a separate application for approval of that loan, and the recommended order adopts off staff's recommendation. Regarding the rate design, the recommended order adopts three tiers and breakover points at 3,007 gallons as proposed by the company for the smaller meters.
With the rate case expense surcharge of $3.61, the typical residential bill with median usage of 4,173 would increase to $88.43. That's a total increase from current rates of $45.65 or a 106.71%. The recommended order adopt SAS recommended service charges in the company's proposed service line and meter installation charges. Exceptions were filed by the company, noting that the recommended order does not include service line and meter installation charges for
eight, ten, and 12 inch meters, but includes monthly minimum charges and commodity charges for those sizes. The exceptions also state that the revenue adopted in the recommended order needs to increase to account for the debt service reserve requirement and still maintain the cash flow indicated in the recommended order. Two amendments were filed by the hearing division. The first adds, at cost service line and meter installation charges for the eight, ten, and twelve inch meters in response to the company's exceptions. And the second corrects the amount of cash flow and the DSC resulting from the
adopted revenue requirement following the company's exceptions that correctly noted the cash flow in the recommended order did not account for the debt service reserve fund. The correction in the cash flow figure does not alter the overall conclusions of the recommended order or require a modification to the revenue requirement. The revenue requirement is based on a 9% rate of return and not a particular cash flow target. The recommended order correctly finds that the revenue requirement results in sufficient cash flow to service the proposed debt and provide cash available for contingencies even at the lower cash
flow amount. Thank you. Thank you, judge. And we'll go ahead and hear from staff. Mister chair, vice chair, commissioners, staff supports Theroux with the two hearing amendments and is available for any questions. Thank you. Is there anyone from the company here? Hi, I'm here. My name is Jim Vermillion. I am the President of Enbarino Water Company. And, thank you for this opportunity, Mr. Chairman and members of the commission. Here to answer any of your questions concerning the rate increase. Increase. Thank you, sir. And we'll go ahead and move to commissioner questions starting with Commissioner Walton.
Thank you. So, could you explain, why that you were making interest only payments on the small business loan? This is for the company. When we applied, we thought thought we were going to get re you know, reimbursed. It it that didn't happen and there's we're in the process of working with small business on this and that's what they recommended we do for now. And we'll turn over to principal as well, in the near future if we need to do that. Alright. Thank you. As far as the exceptions, I'll just note that the our ALJ,
bumped the amount high enough to provide for contingencies including a probable loan and is requiring compliance filings once the loan is obtained so that the commission can ensure the company's, not recovering more than the, allowed amount. So I just wanna thank that, thank our ALJ for addressing that and, making sure that there's not gonna be an over collection. So I I I do agree with, their addressing the exceptions filed by the company, and those are all my questions and comments. Thank you.
Commissioner Marcus Peterson. Yes. Thank you. Thank you to mister Vermeilier, if I'm saying that properly, for for dialing in today and participating. I realized it's I was looking at the date, twenty three years since the last rate case. So, we're thankful that you're here. I think it's important that you have regular rate cases. And not sure why this took so long to come, but we're at a point now where we have excessive water loss, water meters that are over ten years old in a water utility that's not in compliance with ADEQ and ADWR. So glad you're here, but this took too long and wanted to see if you wanted to respond to
that. Well, we originally started the project for a residential community, and we ran although it was successful, the community was successful for four or five years, then we ran into the recession in 2008. And by the time we recovered or had recovered 2015, we just wanted to let things, lay as they were until we thought it was necessary to do a rate increase. Okay. Thank you. And reading through the customer comments that are in the docket,
seems like customers are are not really understanding, I guess, the rate case process or even the the impact of the rates. What communication have you had with customers during this process? I've spoken with any of them that wanted to question what we're doing, and I think we're still under some of the the rates are still if accepted would still be under some of the other communities that are being serviced by other comp companies. Okay. And I I I guess, I would expect, I guess, more thorough customer communication. I think it would be better off the more transparent and and available you are
to answer questions. The the less letters, I guess, we'll get after this rate case goes through, because I'm sure this investment is necessary. It's important that you get the financing for improvements, But, we need to communicate this to customers as we go along, especially to the necessity of a rate case. Yeah. I'm on-site, five or six times a week. I know exactly where I am, and I'm always the door is always open to talk to. Thank you. And, I guess I will ask, the judge about hearing amendment number two. And did that resolve the exceptions discussed by the company
except for the additional surcharge, I believe, for WIFA? Chair Thompson, commissioner Marquez Peterson, I I don't think it necessarily resolved the exceptions and that the company, still has concerns about the lack of a surcharge. What it does is the company's exceptions flagged for us in error in the in the cash flow calculation. So it it corrects that, but it's not, it's not substantive in in the sense that it it gives the company anymore, which I think is what they were looking for because it maintains the revenue requirement
the same what the company was looking for was for us to increase, the revenue requirement to maintain the cash flow. And instead, we've we're maintaining the revenue requirement just correcting the, erroneous cash flow and DSC figure. Okay. Thank you for that clarification. A question for staff. The company is not in compliance with ADQ and ADWR. Do you think that they have proper plans in order to, handle the situations? Mister chair, vice chair, commissioners, commissioner Marquez Peterson, it's staff's belief that the company is taking the appropriate steps to address the noncompliance
issues. Okay. Thank you. I saw the language that staff recommends the company work with both agencies to resolve those issues. I'm just, I guess, concerned with follow through. So you believe that they have the proper steps in place to Yes, commissioner. Handle these issues. Okay. I think that concludes my questions. Thank you. Thank you. Vice chair Myers. Nothing additional for me. Thanks. Mister Lopez. No. Just, again, all parties involved, you know, seems like that that even though we're coming to fairly reasonable endpoint, it doesn't seem like there was a lot of, moving parts to negotiation and appreciate the the involvement of the company to,
you know, flag those items and then also, the adjustability and and be able to amend to make sure that everything's accurate. Again, kudos to, all involved staff, ALJ and the and the customer to to get to a good resolution. So thank you. Great. Thank you. And I have no questions. So with that, mister Myers, would you please move hearing amendment or proposed hearings division, amendment number one? Yes. I move hearing number one for discussion or or vote. For For vote. Okay. For approval.
And hearing amendment number one passes five o. And you please move hearing amendment number two. And I move hearing number two for approval. And hearing item, hearing amendment number two passes five-zero. And now I move, item number 18 as amended for approval. Thank you. And item number 18 passes as amended five o. With that, let's move to item number 19. Alright. I move item 19 for discussion. Chair, vice chair, commissioners, Jacob Vaughn on behalf of commission
staff. Excuse me. Item number 19 is an application by Swarita Water Company LLC for request to reset the CAGRD annual adjuster fee. The company seeks authorization to adjust its CAGRD rate. Excuse me. The company seeks commission authorization to adjust its CAGRD rate from $2.31 per thousand gallons to $2.36 per thousand gallons. According to the company, there was an over collection of $183,399,
which is the difference between the $1,200,000 authorized in decision 796351.41. The total actual collections plus interest from October 23 through sep sorry. October 2023 through September 2024. Staff concludes that the company has filed the appropriate documentation to support a revision to the CAGRD fee as required by decision seven three two eight three.
Staff, recommends the commission accept the rue as written. Great. Thank you. We'll now hear from the company. Good morning again, chairman, vice chairman, commissioners. Jay Shapiro from Shapiro Law Firm on behalf of the applicant Sarita Water Company, and we support the Roo. And, again, any questions, we're here to answer. Thank you. We'll turn to commissioner questions starting with mister Walden. No questions. This is very straightforward. Commissioner Marcus Peterson. And no questions. Vice chair Myers. No questions for me. Thanks. Commissioner Lopez. We have a question on the statement that was said again. There's an over collection,
but yet the surcharge is gonna be going up. So can you just clarify the reasoning behind that? Mister chair, vice chair, commissioners, commissioner Lopez, I'll I'll take a first attempt at it. And if I miss anything mister Shapiro can add. So when the commission sets these surcharges, it's volumetric, so it's per thousand gallons. If the customers use more, then they can have a tendency to over collect. So there was an over collection, but the cost for replenishing the groundwater also increased. So that's why the amount of the increase that's being requested in this application
is less than it would have been absent the over collection. So the over collection is going to offset the increase. Makes sense. Mister Schippero, any other add on? No. Just to point out, commissioner, that it may also be a little bit of growth, as well as water use. In other words, if you have a few new customers added to the system over the year, then you may over collect as well. But that's why the adjuster works both ways. Sometimes we under collect, sometimes we over collect, and it gets trued up annually. Okay. Perfect. Thank you. And I have no questions. So with that Alright. I move item number 19 for approval.
Please cast your votes. And item number 19 passes five-zero. And with that, we're going to take about a short little ten minute break. I did want to recognize we have a lot of new faces in the crowd today so thank you for coming in today and listening through our typical mundane process of of our commission meetings. So thank you. Let's take a ten minute break. This works also. Not yet, but they're starting up. Starting up. Okay. We'll go ahead and reconvene now if everybody will please take their seats.
We'll see. Vice chair Myers, would you please move item number 20? Yes. I move item 20 for discussion. Thank you. And we will go ahead first and hear from staff. Good morning, chairman, vice chairman, commissioners. Ryan Wood on behalf of staff. Agenda item number 20 is staff's memo and proposed order regarding Southwest Gas System, integrity management project list for fiscal year twenty twenty five. Staff reviewed the sim plan, the list of projects, the POA, as well as the FERC accounts and estimated costs,
and staff recommends approving the list as provided. Staff is available for any questions that you may have. Thank you. We'll hear from the company. Good morning, commissioners. Matt Durr and Vincent Vidito with Southwest Gas. We support the staff, recommended order and are here for any any questions. Well, thank you. We'll go to commissioner questions starting with commissioner Walden. I don't have any questions. I'm just gonna, comment that, that this does not, make a finding of used and useful, that that will be determined in the next rate case. And that's not the determination that that we're making here.
So just wanna get that out on the public record. No questions. Sorry. Before we move on, I completely missed, Dan Pizzeski. So I'm sorry, Dan. Please come forward. No worries, mister chairman. Good morning, mister chairman and commissioners. Daniel Pizewski on behalf of Ruko. We attended, several two, conferences on this, which is just to say the PO is working and POA POA is working as it should. And we support staff's recommendation, in 2021. I know you're not on '21,
but that one's for the 2026 project review. Same idea, the list. We've looked it over. We verified the accounts are correct and, have no opposition, so we do support the recommendations in both. Great. Thank you, Dan. Thank you. Sorry. Now going back to, commissioner Marcus Peterson. No questions. Thank you. Vice chair Myers. Nothing from me. Thank you. Commissioner Lopez. Yeah. Just a point of clarification from my understanding again. This this surcharges, again, accounts for the increased revenue needed in order to or associated with each of these projects until the next rate case having not the full cost of each project that
is underway. Is that correct? Yes. Chairman Chairman Thompson, Commissioner Lopez, what you're approving today is just a a staff's recommendation that projects we're working can port with the plan of administration that was approved back in July. And then next year, we'll file a surcharge and that those recoveries will be capped at $50,000,000 per that July decision for that work that'll be done this year and plant that'll placed in service prior to the end of the calendar year. Up to a max value, but, again, track to what exactly is spent. Yes. Alright. Chairman Thompson, commissioner Lopez. Yes,
sir. Okay. Perfect. That's all I have. Thank you. I have no questions. So commissioner Myers. Yes, sir. Myers. I move, item 20 for approval. There it is. And item number 20 passes five o. And now I'll move item 21 for discussion. And we'll start off with staff. Chairman, vice chairman, commissioners, item number 21 is staff's memo and proposed order for Southwest Gas Systems Improvement Mechanism project list for fiscal year 2026. Staff did the same review of the FERC accounts with the POA and verified the
cost do appear reasonable. And to, commissioner Walden's point, staff has not made any used and useful determination for these projects, but staff is recommending approval of the project list as proposed. Great. Thank you. And the company? Good morning again. Matt Durr and Vincent Vidito with Southwest Gas. We support, staff's recommendation for item 21. We're here for any questions. Great. Thank you. And so I don't forget you, Dan. I know you spoke on '20 and said you support '21 but I'm allowing you for the record. Thanks again, mister chairman, commissioners.
For the record, ditto to my comments on '21. Great. Thank you. Thank you. And we'll go to commissioner questions starting with, commissioner Walton. No questions. Mister Marcos Peterson. Yes. Just a clarification question. Wondered if you could tell, us what the total dollar amount of the SIM projects estimated in 2026 plan are. I see that each project was likely around a million dollars, I believe. Must be at least 1,000,000. What is the total dollar amount? Chairman Thompson, commissioner Marquez Peterson, for 2026, it's approximately $174,000,000.
$174,000,000. Okay. Thank you. No further questions. Vice chair Myers. I have exactly the same questions that I had on the last item. Okay. Commissioner Lopez. No questions for me. And I have no questions, so, vice chair Myers. I move item number 21 for approval. Item number 21 passes five o. Number 22. Now I move item number 22 for discussion. We're gonna start out with, Judge Harp. Good morning. Pardon me. Mister chairman, mister vice chair, commissioners, Sarah Harper for the hearing division. This item is a rule making to repeal the gas utility energy efficiency standards rules,
which are codified at Arizona Administrative Code Title 14, chapter two, article 25. The commission adopted the gas EE rules in decision number 72,042 in December 2010. The commission's rationale for adopting the rules at the time was that decreasing gas consumption would reduce gas costs, infrastructure costs, and distribution costs, as well as reducing, adverse environmental impacts. The gas EE rules do not establish a standard beyond the 2020,
however. In decision number eight one three six five, which was issued in June 2025, the commission directed staff to file a notice of rulemaking docket opening or NRDO and a notice of proposed rulemaking or NPRM to repeal the gas EE rules with the Office of the Secretary of State for publication in the Arizona Administrative Register. The NRDO and NPRM were published on 07/25/2025. Decision number eight one three six five also
no member of the public provided oral public comment comment during the formal public comment period. Among other things, the recommended order finds that the gas EE rules no longer establish an EE standard for affected utilities rendering the rules ineffective for their purpose. The net benefits reported to result from the affected utilities gas EE programs have decreased significantly in the past two years although the levels of expenditures have not changed significantly. The commission has determined that the gas EE rules are no longer necessary,
are no longer in the public interest, and have resulted in affected utilities customers paying more for their service through subsidization of programs that benefit some customers at the expense of other customers. And it is just unreasonable and in the public interest to repeal the gas EE rules. The recommended order directs staff and the office of general counsel to create and file with the office of the attorney general a notice of final rulemaking package that includes the text of the repeal gas EE rules, a preamble conforming to the Administrative Procedure Act,
a final economic impact statement including the information from the preliminary economic impact statement that was prepared by a consultant, as well as modifications set forth in the recommended order, and any additional documents necessary for the AG's review and approval process and by the office of the secretary of state for publication and codification after that approval. No exceptions have been filed. Although, to be clear, there are no parties to this matter because it's a rule making and I'm available for any questions you may have.
Thank you, Judge Hartley. We'll go ahead and turn to staff. Chair, vice chair, commissioners. Renell Paladino for staff. Staff supports the Roo and we're available for questions. Thank you. We'll turn to commissioner questions or comments, starting with commissioner Walden. So I don't have any questions. I just wanna reiterate what it says in the recommended order and opinion that the gas energy efficiency rules have resulted in affected utilities customers paying more for their service through subsidization of programs that benefit some customers at the expense of other customers.
I will be supporting the repeal. Thank you. And commissioner Mark Espers? No questions. Thank you. Vice Shermyers. You know, I as commissioner Walden said, I I just reiterate the things that, were said in the the recommended order and and the things that, Judge Harpring just said. Historically, we've seen that the mandates, while they're they may have been well intentioned at the time, have have served to unnecessarily increase the cost for customers. So, I definitely support this. Thank you. Commissioner Lopez? Yeah. Also comment, very similar to the press past evaluations we've done with the other rule appeal,
rep rep repealing. I don't know. Let me whatever that word is. Again, this was, established many years ago, decade ago, and, again, was set to expire in 2020, but we're having, again, speed of government sometimes, you know, five years now we're evaluating and taking this off the books, again, which is costing, all the rate payers a little bit more. So, yeah, I'll be supporting this, to evaluate the repeal of these rules. Great. Thank you. And in, the words of the great Dan Pazewski, ditto to what everyone else said. And so with that, vice chair Myers. Yes. I move item number 22 for approval.
Item 22 passes five o. And then Now I will move item 23 for discussion. K. Thank you. Good morning, chair, vice chair, commissioners. It feels kind of odd being over on this table, but there's no use making all the staff move. Mark Donell, obviously, for the securities division. Ryan Millicom of our office will be presenting on this matter. Good morning. Chair Thompson, vice chair Myers, commissioners. My name is Ryan Millicombe. I'm senior registration and compliance counsel for the securities division. The securities division is seeking approval of its five year review of the Investment Management
Act rules and authorization to open a docket to revise those rules. The securities division conducted its review under the direction of the commission's 04/28/2022 order. This requires each commission division to review its existing rules every five years. Securities division is tasked with reviewing three sets of rules. First up were rules for examinations, investigations, and procedure. We completed our review in spring twenty twenty four. We're now engaged in rulemaking. In the next couple of years, the division will be reviewing the securities act rules. Review of commission rules includes evaluating each rule for effectiveness in achieving its objectives,
conformity with current practices, clarity and conciseness, and whether the rule imposes the least costs on the persons regulated. In addition to these requirements, the securities division is guided by its mission statement with its objectives of preserving the integrity of the financial marketplace, enhancing legitimate capital formation, deterring fraud, and minimizing the burden and expense of regulatory compliance. With that, I'd like to highlight, some of the findings from the securities division's five year review and discuss a couple of things we hope to improve in the I'm Act rules. First up,
the record record keeping requirements of the I'm rules are largely based on an SEC rule that is several years old. We'll be assessing changes that would make Arizona's requirements conformed with formed with current national requirements. Firms operating with mult within multiple states or who conform with federal requirements would likely have no additional burden. And we believe all firms will benefit from uniform rules as uniformity removes the cost of complying with different requirements in different jurisdictions. Another significant area for potential revisions is restrictions on investment advisers and represent representatives methods
for advertising. The current Arizona rule prohibits state advisors from using certain forms of advertising such as client testimonials. A few years ago, the SEC changed its advertising rule to allow testimonials along with endorsements, projections, while also requiring heightened disclosure and additional anti fraud provisions. The securities division will review changing Arizona's rule to align with the SEC rule where appropriate. The division has received feedback and support from the Financial Planners Association of Arizona to update this advertising rule to align with the SEC rule, and we anticipate continued participation and support from them and other industry professionals as we
work to help address the concerns of Arizona advisers while protecting clients and investors. If the commission approves this proposed rule proposed order that is, the securities division will open a rule making docket for the I'm rules and propose rule revisions that will incorporate the findings in this five year review. The public and other stakeholders will be able to participate throughout the process by filing comments in the docket, and they can also request and participate in any oral proceedings. With that, mister chair, vice chair, and commissioners, we're happy to answer any questions you may have about the securities division's proposed order.
Thank you, sir. We'll go to commissioner questions starting with commissioner Walden. I don't have any questions. I I support the rule making changes. The regulatory environment has has changed significantly, over time, especially in the last couple of years and with the addition of digital assets as well. So I think this is definitely worth doing, and, I'll be supporting your changes and looking forward to, the rules in the future. Thank you. Commissioner Marcus Peterson. No questions. Thank you for your work. Vice chair Myers. Nothing from me. Thank you. Lopez. No questions or comment.
Great. I have no questions either, so thank you. Vice chair Myers. I will move item number 23 for approval. Rachel. And item number 23 passes five o. Maestro Myers. Now I will move item 24 for discussion. We'll go ahead now and hear from our legal department. We have our resident FERC expert here who's willing to and as is prepared to discuss, this matter with you. I've also looked into it at length, but I'm gonna turn it over to mister Bodkin. Great. Thank you. Thank you. The item for you today is a request for
the commission to approve filing an intervention with the docket that was recently opened, based on a Department of Energy letter requesting the commission to look into setting interconnection requirements for large loads, primarily data centers. Data centers have been a a very hot topic over the last couple of years. They continue to to grow and proliferate throughout the country. They are extremely large loads in a in a very centralized location. And what the Department of Energy secretary has asked for is to basically establish requirements
that would be standard throughout the country, federal requirements promulgated by FERC that would set a baseline standard for how these large facilities would interconnect to the grid, similar to what they established back in 2003 for large generators. Generators. The letter establishes, 14 principles that the Department of Energy feels would be appropriate for an advanced notice of proposed rule making for it to adopt, which would then put this forward for basically comments. On things like jurisdiction as well as the specifics of what rules would be proposed by the commission.
This letter at this point doesn't establish any specific rules, it just establishes principles that the Department of Energy Secretary would like the commission to follow when establishing a proposed rule which would then get to the specifics such as interconnection requirements, possibly voltage levels, discussing items such as cost shifting, subsidization, and additional details. At this point that that serves as a high level what what we are where we are at this point. Like I said, we're a very preliminary stage. FERC does not propose any detailed interconnection requirements. This is this docket is basically to establish the principles and to begin the process
to establish detailed interconnection requirements for large loads, which is something novel. Loads have never been subject to FERC jurisdiction in the past. It's always been generation and transmission. And what FERC is relying on in this case is their authority under the Federal Power Act that allows them to basically regulate transmission lines for interstate commerce which is also based on the commerce clause of the constitution. So they're relying on the fact that this is an interconnected grid and that these large loads are relying on energy from possibly interstate commerce.
With that, I am available for any specific questions you may have on the process or where the, Department of Energy is intending to go. Great. Thank you. I guess we'll go now to, commissioner questions with, commissioner Walden. Yeah. So I'll I'll add that as far as as, you know, large loads and and rates, the commission is well ahead of, I think, the curve here and we have an open docket and are committed to ensuring that there's no subsidies occurring, for large loads, but you mentioned this is preliminary so this is what everyone's calling an ANOPR proposed
advance notice of proposed rulemaking. So it's a proposal to, make a proposal of rulemaking. I feel like this is gonna be hard to really have a discussion without seeing something more substantive here since it's really up to FERC to, present those rules, if that even happens or we get to that point because it's not their jurisdiction. I have a recommendation that I think that we should table table this topic until we actually see something that we can really, really discuss. Alright. Thank you.
Commissioner Marquez Peterson. Thank you for bringing this up, and I know the docket was opened by, chairman, Thompson and vice, chairman Myers. I think it's important that we do intervene. I don't know about the timing, so we can certainly talk more about that. But, I mean, this is such a hot, controversial issue across the nation. It's important that Arizona has a voice in this conversation, and we need to formally intervene in order to do so, and wanted to see if you had feedback, I guess, on my comment. Chair Thompson, Commissioner Marcus Peterson, time is of the essence. FERC is very, very rule bound. They're a a federal government entity and they have very,
very strict rules. If we wanna intervene, we only have till the twenty fourth to do so in this docket. It was actually extended at the request of a number of RTOs and ISOs who have a vested interest in this. If we don't intervene now then we lose our ability to become a party, we can still comment but we will no longer be able to become a party to this docket. I see. So thank you for that clarification. So I think intervening is important. I know we don't know yet what our position or or or content will be in any kind of opinion we give, and you would bring that forward to us in an open meeting,
I assume, so that we could vote at that point. That's correct. And and what I I'm proposing is called a dockless intervention. What that is is basically a placeholder that allows us in the future as this develops, we get more information to continue to participate and and file comments on the record. Okay. Thank you very much for the clarification. Can I ask a legal Sure? Question and just in follow-up to commissioner Marquez Peterson's comments? So this is just for the the advanced notice of proposed rulemaking. In a in the notice of proposed rulemaking, we would be able to file at that time,
wouldn't we? Sure Thompson, Commissioner Boyle, that's correct. That would be a a a new docket for the notes of proposal rulemaking. So we would then have to, once again, intervene if we wanted to be a party to that and move forward with that process. This is just for the ANOPR process, which is which is basically taking the principles and putting together that advanced notice of proposal rulemaking, which would then in turn turn into the notice of proposal rulemaking. Okay. So if we if we were to to table this, we still have the opportunity, when we actually see see rules that have been proposed to intervene at that time.
Chair Thompson, commissioner, well, that that's correct. We just would not have an opportunity to address the items in the Department of Energy letter which address things like the jurisdictional issues required in the legal principles they outlined as well as the 14 principles they want covered in the ANOPR. At this point, we have an opportunity to help form what that NOPR would look like rather than respond to what the commission actually proposes. Yeah. I I I and I think it's kind of a without seeing the rules, it's like a really sticky issue because it's not the FERC's jurisdiction.
So they're you know, in trying to expedite certain things, they're overstepping their bounds, and I I think that we're gonna see a lot of, pushback, like, we've kind of already seen even from former for commissioners that this isn't their lane. So I'm I'm not sure that it's even gonna get to that point that we're gonna see the the Noper, but wanna make sure that if we do, you know, we can certainly intervene at that point, which you've answered. Yeah. Chair Thompson, commissioner Walden, I do expect litigation to occur, but that wouldn't actually occur until they actually pass a rule.
So at this point, as I mentioned, we would have the opportunity to help shape and comment on what that rule will look like to hopefully address the jurisdictional issues before we get to a litigation stage to to give the Arizona Corporation Commission and state perspective on where we think jurisdiction is and lay that record for when it if it does come to litigation where we actually stand. Thank you. Mister Myers. Yeah. Thank you. So I I originally wanted this item to be on the agenda so that we could have the, a discussion about potentially voicing the commission's position on this issue just like our our,
legal has said. You know, other states are responding to the ANOPR. I just wanted to make sure we had the opportunity before November 21. I'm not necessarily going to oppose tabling this. I I think it is important that Arizona stay relevant at this, you know, with this issue. I I do agree with, NARUC's recent, recently adopted, resolution in response to the Secretary of Energy's ANOPR. I agree that the, I also agree with the, policy priorities expressed by the secretary and agree that ensuring efficient,
timely and nondiscriminatory interconnection of large loads including data centers, it requires prompt and thoughtful consideration by regulators. But at the same time, I also agree with, with NABIC's urging of FERC to preserve and affirm states' rights in this. So with that said, I do believe that the states and the state regulators can work with FERC, and other interested parties to develop a a durable and meaningful, resolution to the the ANO proceeding. But I can also see the benefit in not, getting caught up in the mix just yet and waiting until later because there are
gonna be a lot of of chefs in the kitchen, if you will. So, you know, a lot of other states do not do their connection process as well as we do or a lot of other other jurisdictions, I should say. So maybe that's where the fight needs to be more, but, also, there's some value in Arizona preserving what we already have and and making sure that that doesn't get taken away because of the bad actions of other states. You know, I I would hate to be the good apple in the basket and have the bad apple ruin it for us. So, so with that said,
I I will probably, you know, lean on my other commissioners as to to whether we we actually do table this or not. But, I guess my druthers would be to at least preserve our right to to have something to say. So Mister Lopez. So trying to boil this down. I'm kind of a civil male. See it. There you are. Hey. Hi. So I see this as as, again, that first step of them notifying, again, due to historical other areas of jurisdiction where the FERC kind of is intervening and kinda showing a flag to the national commissioners of saying,
we think you need to do something in order to ensure you're addressing these large loads. But they really didn't specifically set any rule making. They just said, we believe in these, you said, 14 principles and, you know, that that we think commissions need to make sure they're considering and being fair and reasonable and allowing some of these loads when they come on. But again, just kinda showing more of their intentions and not really set anything laying anything down as requirements. Is that is that a correct understanding of of this initial letter?
Sure Thompson, mister Shulman, that that is correct. This is basically responding to the Department of Energy letter, which set which set out the principles that FERC will then use to develop the specific rules which we'll be proposing in the in the NOPR. Okay. And so the assay for for this is is to say, we would like to be interveners on this docket in order to say, we can now provide inputs. I I'm I guess I'm trying to figure out because you did say that there's a new docket that would have to be open for any rulemaking, but could be based on this docket. So that's kinda where my confusion is, like, if so I'm trying to figure out if we are to intervene,
what are those the the consequences there and allows us a seat at the table to drive future policy, but as asked for by commissioner Walden, it's like, but there's a second document that has to be open anyway for the rulemaking. So does this intervention really buy us anything, or is it really just, again, make sure we have a seat at the table for a future intention, which has which has to happen anyway, which we would get another bite at the apple per se, since we're using apple analogies.
So I I guess I'm I'm trying to say, if we don't act and do this and postpone it and miss the deadline, does that really put us on our heels in the future, or by intervening and doing it now, it is not really that impactful, either way? I guess I'm trying to figure out consequences of of acting or not acting. Church officer, commissioner Lopez, commissioners, at at this point, the the ANOPR is is more what I would term the the policy level. They're they're looking at these principles and they're looking for feedback on all these principles correct. Are we missing anything? Where how should we address these principles in in our rule making?
That's what this stage is. The next stage of the actual NOPR is, here are the rules we're proposing you follow, which will be more technical in nature, and we want your feedback on now that we've established these are the policies we're following and this is the direction we're going, this is how we wanna implement that policy. So this is kind of that precursor, I like to say, of of helping develop direction, for the future rulemaking then. Correct. Okay. So, to that point, I've been I I I and then kinda lean towards and I, again, appreciate, you know, either postponing it or not, but I can see us getting a seat at the table ahead of time and
helping drive some of that direction of that discussion, could be helpful, again, down the road for the future docket of rulemaking. So that that that's kinda now with your clarity, it kinda kinda helps me provide my direction. Thank you. Alright. Thank you. Yeah. I I think the current system has kinda left everyone a little bit frustrated. You know, large loads, you know, data centers and large loads are are really having difficulty, connecting to the grid. Utilities are struggling, you know, trying to mitigate this fast growing, load growth. You know, the upgrade cost of bringing new supply online,
fast enough. You know, regulators are working to try to ensure that rate payers aren't left holding the bag. But I think with this proposed rulemaking, you have FERC which has held a longstanding role of regulating generation, interconnection to the transmission system. But I think as Commissioner Walden alluded to, FERC has not asserted jurisdiction over load interconnections to date. And at least for me, I wanted to originally add this to the agenda along with, Vice Chair Myers because I think DOE,
their notice of proposed rulemaking is triggering an intense debate, nationally on the legal basis for FERC's jurisdiction over large load interconnections. And I don't look at it necessarily as just data centers. I look at it as, you know, even if we're trying to reshore manufacturing, you know, our utilities are struggling still. And I, you know, I believe there's jurisdictional issues when it comes to adding large load onto the grid. I think DOE has opened the door
for large loads to potentially curtail their energy consumption from the grid at key times. And I think that's a good thing. But there's not a lot of details, at least not yet in how all of this is gonna be put together. I think at the end of the day, everyone shares the goal of trying to mitigate, you know, the reliability impacts on our grid and trying to also mitigate the cost shift onto, residential and small business rate payers. I don't know, that I see this as this, proposal is having a detrimental impact on residential rate payers,
at least what's been put in front of us first. I'm not opposed to essentially, filing a placeholder and preserving our right to speak our peace, but I just wanna make sure that, that we have all the answers in front of us to make the decision the best decision that we can make. And I sort of agree with Commissioner Walden that, you know, we don't we don't know what we don't know. And at the same time, I also wanna make sure that Arizona has a place at the table.
So this is one of those those really, really, you know, questions that I could go either way on, and it's troubling. I feel like Nick did, or Vice Chair Myers did, you know, at our last meeting of, man, I'm on the fence on this and I really don't know which way to lean because, you know, I think that we have a responsibility, you know, for states' rights and I wanna preserve our our states' rights and our ability, to, you know, to approve or disapprove, those interconnections, large load interconnections. So, What chair question? Yep. I'm sorry.
Go ahead. So I was gonna ask you, and and I appreciate that in this kind of debate we have here on on the dias now, outside of staff or it's really kind of for us then to decide by intervening, are we opening ourselves to other criticisms and or unintentional, again, consequences for that versus intervening? Because, again, as with we have a lot with other interveners, they intervene, so they get copied and they have that seat at the table, but they don't necessarily have to exercise that right. But by doing so, is it becoming burdensome on the process or,
again, on us? Is it putting us in a light where we're pinning a target on our own back? So, you know, talking with your opinion, that's kinda where I'm with you all too on that fence on on on what's the the return on commitment here, to benefit us. And right now, I do lean personally, I do lean towards intervening because, again, it I just don't see that many negatives, but maybe I purse am not perceiving a negative that someone else that you all may be seeing. So that's kinda where I'm asking. You know, another option is and kind of when you answer his question,
is it advisable to if we were to submit a letter to make sure that we don't take a position at this point? Well, and and and here's my and this is where I go both I I can go both ways. Right? Because, on one hand, I agree with the administration that there's issues in the process and these issues need to be worked out. There's also, you know, NARUC is taking a stance and and I guarantee you, there's other states that are also going to to take a stance. Most of those states are gonna be RTO states. We're one of those non RTO states where,
you know, we have our our own state jurisdiction. And so and so that's kinda where I'm torn is is, you know, I know that others on the West Coast, other states are going to intervene. And part of me thinks that, you know, to, I think, Commissioner Lopez's note that are we setting ourselves up for negative ramifications, with our name on something versus, you know, pushing a a a back against FERC on something that we already know that other utilities or other not utilities. Other, entities are gonna weigh in on anyway.
And they're probably gonna be siding, very closely with what our beliefs are here in Arizona. I know that Idaho probably, shares the same, concerns that we have as does Utah and Colorado and other states where they have large loads coming online. And so, you know, I I think I'm probably gonna lean towards maybe not, intervening at this point, and let's see how it plays out a little bit. So I'm gonna agree with commissioner Walden on this. And and I'll just add, if if I may, that, we don't we don't lose we don't,
lose anything by by not getting involved at such a preliminary phase. Right? This is very early. It's we're not losing our ability to, in our rate making ensure that there's no subsidies. Our states' rights still exist. Our plenary authority still exists. Our ability to ensure there's no subsidies for data center, all that exists. This is a, you know, preliminary proposal. If it results in actual rule making, there will be a notice of proposed rulemaking, and then we can intervene at at that time, which to me just makes more sense that we because we're speculating,
I feel like, too. There's a lot of speculation, but we intervene when our our comments and our opinions can be very concise and intentional, versus now where it's so early we're gonna be making assumptions, and we're not really sure what we're commenting on necessarily in such an early phase. Chair Thompson, commissioner Walden, you you're correct. All we're all we would be commenting on were the principles and the the matters of law that they're they were discussing for jurisdictional issues. Just one one thing I wanna clarify. We wouldn't necessarily be submitting a letter one way or the other.
I think what we're requesting is we file a dockless intervention, which is basically we, the state of Arizona Corporation Commission, want to be a party to this. There there are no pro or against comments that we would be required to file at that time. It just puts a pin in it for us if we want to in the future. This also gives us the ability in the future if we just if there are, as chair Thompson mentioned, other states that hit the nail on the head and and express our concerns or say, NAIROC files comments, we would be able to comment and say,
we, the Arizona Corporation Commission, support these comments without actually submitting our own. Can I Go ahead? Mister Marcus Pearson. So I've listened to the dialogue, but I really I guess I don't see the downside to us intervening today. This is a placeholder. We're not putting out a position or a comment on the content, but we're able to participate in the future. I think we could eventually vote on intervention twice now at this moment and in the future, when it's actually a rulemaking. So I I guess I don't along the same points that commissioner Lopez made,
I don't see the negatives in engaging today. I think it puts us at the table where we can have input. Alright. Any further discussion? You know, I I I think, well, I I agree with our legal on this, and I I think it would be a prudent decision to at least, you know, throw our name in the hat even if we choose not to exercise it. I it's just a letter. Right? It's not a ton of extra work. It's not committing us to anything. So, am I wrong in that? No. You're you're correct. It's not even a letter. It's it's basically it's an electronic filing saying we
we put our name in, and it puts a pin in it for us. Yeah. I I I think, I I think I'd like to at least have a seat at the table because, you know, we want to main we wanna make sure that we have the ability to speak to those 14 principles if we need to and and, shape the the rulemaking going forward because it it could have some impact on us, and then we don't wanna have to fight it later after the decisions have already been made. So, so I I think I'm leaning towards, my my other two colleagues of of allowing that to happen.
May I clarify? So when you say that it's just a a docket or puts a pen in it, there's no comments, There's no statements for or against any of the principles. It's just a a a docket that says we're interested in this matter. Sure. Thompson Commissioner. That's correct. We don't there there's no comments for or against. No comments on the substance. At this point, a DACA intervention is just we're interested in this. Keep us informed, and we may wanna file something in the future. Okay. So how does this work now that we have a motion on the table? Do we need to vote on that motion to table it before we vote on
the actual item? Well Unless she pulls her I mean, I I can I didn't make a motion necessarily? I can I I can withdraw Okay? I'll withdraw my motion to table for additional discussion for a new motion. Okay. Okay. But I'm I'm with with chair Thompson, and I know you're on the fence. I'm interested if you have have other comments. Well, and, you know, and and and being I like the idea of just putting a pen in it and saying we want to have the right to define us. Right? We want to have our our voice.
What I was afraid of is is us putting comments into a docket without knowing what we're putting the information or comments into a docket that we don't know about. And so if it's simply just a placeholder that preserves our ability to have the conversation and says, hey, we are interested in this issue. Because I think this commission obviously is very interested in this issue. This could have it could have, you know, negative impacts on our consumers across Arizona.
And so I think it's important that we stay abreast of this and understand what's going on. And so, it kind of has me now leaning towards supporting because I do want to preserve our ability to have a seat at the table. And, I just don't want to have to comment, to FERC on any issues until we know the the the rules that we're playing by. Yeah. That was my concern too. And why I initially talked about tabling is I was really concerned about what a letter would actually say, without having something more substantive to to to look at. So I think from what you said,
we're just preserving our ability to be a party to it, that we get information when other states file or things happen, and we can decide at future dates if there's something we wanna do to intervene. But without an actual letter and just having this pen, I'm I'm supportive of of that. And you are correct. Okay. So, then I guess I'll make a motion, that we, I guess it would be approving item number 24, but with the list of stipulation that we're not filing a letter, we're just putting the pin in and filing for a dockless intervention.
Very good. Alright. There is a motion, so let's cast our votes. And that item passes five to zero. So that is our last item on the agenda. And so with that, we are adjourned.