Attorney General Mayes Challenges Arizona Corporation Commission Over Utility Rate Decisions

Former Commissioner Uses Office to Oppose Rate Hikes and Data Center Deals

Phoenix — Arizona Attorney General Kris Mayes is using her office to challenge decisions made by the Arizona Corporation Commission, sparking a public fight over who controls the state's utility rates and policies.

In March alone, Mayes filed three rehearing requests in separate commission matters, accusing commissioners of violating state law, ignoring their own rules, or acting against the best interests of utility customers. The battles could head to court as Mayes seeks to reverse several rate and policy decisions.

The conflict has put Mayes at odds with the Arizona Corporation Commission, a body often called Arizona's fourth branch of government. The commission holds exclusive, constitutionally-granted authority to set rates for the state's public utility companies.

The Commission takes each complaint or application for rehearing seriously. However, policy disputes are not the same as legal error, said Tom Van Flein, the commission's general counsel, in a statement to the Arizona Capitol Times. The Commission follows the statutes, the Constitution and relevant case law giving it guidance. Policy disputes are not to be resolved in court or even in a rehearing.

Commission Chair Nick Myers went further, accusing Mayes — herself a former commissioner — of using the office to score political points for her reelection campaign. Myers is also up for reelection this year, alongside fellow Republican Commissioner Kevin Thompson.

(Mayes) needs to get her name out there, and she's using the office and using these goofy lawsuits to get her name in the public eye for campaign purposes, Myers told the Arizona Capitol Times.

Mayes' communications director Richie Taylor defended the attorney general's actions, noting her office is charged with protecting Arizona consumers.

When the commission springs 154% utility rate increases on senior citizens, or gives sweetheart deals to data center operators, AG Mayes is going to stand in their way, Taylor said. Chairman Myers should focus on fulfilling the constitutional obligations of the Commission on behalf of Arizonans so the Attorney General doesn't have to step in and do it for them.

Three Rehearing Requests in One Month

Mayes' office has challenged the commission on several fronts:

• REST Rules Repeal — Mayes argued the ACC violated its own rulemaking process by finalizing the repeal of the Renewable Energy Standard and Tariff Rules before completing a required economic impact statement. The rules originally required utilities to get 15% of their energy from renewable sources like solar and wind.

• Robson Ranch Rate Hike — Mayes requested a rehearing on the commission's approval of a 22% water rate increase and 154% wastewater rate increase for Picacho Water and Picacho Sewer Companies serving the Robson Ranch retirement community near Eloy. Mayes argued the ACC did not adequately consider the impact on ratepayers and failed to review documents related to a stock sale of the utilities to JW Water.

• UNS Gas Formula Rate — Mayes requested a rehearing on the commission's approval of a formula rate structure allowing UNS Gas to adjust customer rates annually rather than going through a typical rate case every few years.

We were pleasantly surprised about the AG's office involvement, said Raul Salmon, leader of a local task force formed to oppose the rate increase at Robson Ranch. I mean, the AG's filing, if you just read it, vindicates what we've been arguing all along.

Political Tension Over Energy Policy

The current commission consists of five Republican members. Without a single Democratic commissioner, many decisions are made unanimously and tend to favor conservative energy priorities, including promoting coal and natural gas generation and ending Green New Deal policies.

The tension between Mayes and the ACC has simmered for months, flaring in August when the commission was repealing its Renewable Energy Standard and Tariff Rules. Mayes called the repeal silly and ridiculous, which led then-chair Kevin Thompson to facetiously refer to Mayes as the sixth commissioner for her public opposition.

Former Democratic Attorney General Terry Goddard, who served as a commissioner when Mayes was on the commission in the early 2000s, told the Arizona Capitol Times that his office did not intervene in ACC matters during his tenure.

But I think that's because the commission was doing its job, Goddard said. I didn't see any reason for us to get involved, the Residential Utility Consumer Office was, as far as I could tell, advocating for consumers and we didn't have the same environment that AG Mayes does.

Mayes has also filed a lawsuit over the commission's approval of a controversial data center contract and is intervening in two rate cases involving Arizona Public Service and Tucson Electric Power.

As the battle continues, it raises questions about the proper role of the attorney general in utility regulation and whether policy disagreements should be resolved in court or through administrative processes.