Photo via office of Arizona Corporation Commission
By Reagan Priest | State Affairs
The Arizona Corporation Commission approved the first formula rate structure for a utility in Arizona despite several stakeholders arguing the formula rates will ultimately increase costs for ratepayers.
During a Thursday special meeting, the all-Republican commission approved the formula rate structure as part of a UNS Gas rate case with four commissioners voting in favor and one opposed. The company will now be able to adjust the rates it charges customers annually without the typically rigorous examination done during a rate case.
“In no way is this any kind of automatic rate increase. It’s quite the opposite. It is even more transparent to the public,” Commission Chair Nick Myers said. “Nothing in this decision restricts the commission from adjusting the (rates) at any time if it’s not working as expected.”
Commissioner Lea Márquez Peterson, who voted against adopting a formula rate policy statement in 2024, attempted to remove the formula rate structure, but was ultimately unsuccessful. She argued that nothing in the evidentiary record in the case suggests a formula rate would ultimately reduce rates for customers.
