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ARIZONA NEEDS FORWARD-LOOKING REGULATION
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ARIZONA NEEDS FORWARD-LOOKING REGULATION

The Arizona Corporation Commission recently started an investigation of regulatory and rate incentives for gas and electric companies. According to the Commission, this investigation will take a look at how various regulatory structures influence utility company actions in providing services to customers and how they align with Commission policy goals.

To Commissioner Bill Mundell who requested the investigation—modeled after a similar study in Colorado—we say BRAVO.

 

The Commission’s self-examination of utility regulation in Arizona is a terrific idea. For too long, the ACC’s historic ratemaking approach has placed Arizona utilities at a competitive disadvantage in attracting capital at the lowest cost for investment in critical infrastructure.

 

Regulators in other jurisdictions—both at the state and federal levels—have implemented innovative mechanisms and programs that produce more efficient regulatory oversight while also encouraging utilities to make necessary infrastructure investments, lower costs and improve service levels.

 

In its comments filed on August 29th, AIC encourages the ACC to look at ratemaking mechanisms that are forward-looking, such as future test years; revenue decoupling; rate base treatment of construction-work-in-progress; price caps; rate indexing and inflation adjustments; attrition adjustments; earnings inducements for investment in renewables and more timely base rate adjustments.

 

You can read the entirety of AIC’s comments by clicking on this link:  AIC COMMENTS


Gary Yaquinto, AIC President