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ARIZONA CORPORATION COMMISSION
TO: EDITORS, NEWS DIRECTORS
FOR: IMMEDIATE RELEASE
CUSTOMERS TO GET CHOICE ON ELECTRIC SERVICE The Arizona Corporation Commission has taken the first step toward adopting rules that phase-in a new service system that would give customers a choice of electric providers, beginning January 1, 1999. Retail customers will be able to select "standard offer" service, which is the traditional electric service such as customers now have, or they may choose competitive services. Companies will have to file tariffs describing their services and their maximum rates for Commission approval. They can charge lower rates, as long as those rates cover costs. Commission Chairman Renz Jennings said "This decision keeps Arizona moving forward into electric competition at the same pace that is occurring nationally and in our neighboring states. It insures that residential and small business customers enjoy the fruits of competition, just as large customers will. It also commits Arizona to full development of our vast solar resources." Here are the highlights: U Beginning January 1, 1999, utilities will have to make 20% of their peak 1995 demand available to all customers, including small business and residential customers. No more than half the amount may be sold to large customers. At least 15% of the total will be reserved for residential customers. U Beginning January 1, 2001, utilities will have to make 50% of their peak 1995 demand available in the competitive market. Of that total, 30% will be reserved for residential customers. U Beginning January 1, 2003, 100% of the total electric supply will be available for the competitive market. U Beginning January 1, 1999, at least 1/2 of one percent of power sold competitively must come from a photovoltaic or solar thermal source. That percentage can increase to one percent after December 31, 2001. All electric companies will be required to get Commission approval to provide competitive service. Municipalities and political subdivisions such as the Salt River Project could voluntarily open their markets to competition on the same terms and conditions, getting an opportunity to compete elsewhere in the state. (MORE) ELECTRIC CHOICE/ADD ONE October 9, 1996 in return. In addition, there is the possibility the legislature may act. Customer complaints will continue to be governed by Commission rules. Companies will continue to be responsible for safety and reliability. Utilities will be required to file proposals for "unbundled" services by December 31, 1997. They will have to separately offer such services as generation, transmission and distribution of electricity, meter reading, billing and collection, and consumer information services, at rates to be approved by the Commission. Utilities will also be required to take all possible measures to avoid "stranded investment", but will be allowed to recover those costs from customers who participate in the competitive market. Stranded investment is utility property whose market value is less than its cost following the advent of competition. Stranded investment could be offset by expanding wholesale or retail markets, or offering a wider range of services. The Commission has scheduled public comment meetings hearings on the rules in Phoenix December 2, 1996, in Tucson and Yuma December 3, 1996, and in Flagstaff and Kingman December 4, 1996. The process of opening Arizona to electric competition has been underway since September of 1994, when the first introductory meeting was held, attended by over 100 representatives of utilities, consumer organizations, power suppliers, and others. | |