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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
utilities; high load factor customers
Purpose
Requires public power entities and public service corporations in Arizona to file quarterly reports relating to new extra high load factor customers and outlines exemptions, rulemaking and reporting requirements.
Background
A public power entity is any municipal corporation, city, town or other political subdivision that is organized under state law, that generates, transmits, distributes or otherwise provides electricity and that is not a public service corporation and does not include: 1) a city or town with a population fewer than 75,000 persons; 2) a power district, electrical district, irrigation and water conservation district or multi-county water conservation district; and 3) the Arizona power authority (A.R.S. § 30-801). A public service corporation is any person or corporation that provides electric or communication service to the public by means of electric or communication facilities (A.R.S. § 40-341).
In supervising and regulating public service corporations, the Arizona Corporation Commission's (ACC) authority is confirmed to adopt rules to: 1) protect the public against deceptive, unfair and abusive business practices, practices related to deposit requirements and reconnection fees, intrusive and abusive marketing, deceptive or untrue advertising practices and other statutorily prescribed practices; 2) provide that customer information, account information and related proprietary information are confidential unless specifically waived by the customer in writing; and 3) ensure that public service corporations that employ the services of a contractor for interior household energy service, either directly or through any affiliate, require the contractors and subcontractors to be licensed by the Registrar of Contractors and comply with all municipal permit and inspection standards and applicable life safety codes (A.R.S. § 40-202).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Public Power Entities
1. Requires a public power entity that serves more than 1,000,000 connections in Arizona to file with the governing body of the public power entity quarterly reports regarding new extra high load factor customers, as defined by the public power entity that include, with respect to the immediately preceding quarter, the number of:
a) requests for interconnection; and
b) completed interconnections.
2. Allows the governing body of the public power entity, beginning two years after the general effective date, to suspend the quarterly report requirement by a majority vote of the governing body if the numbers reported by the public power entity are zero for at least two consecutive quarters.
3. Allows the governing body to vote to reinstate the quarterly report requirement at any time.
4. Requires a public power entity that conducts integrated system planning to include extra high load factor customers in the public power entity's load growth projections for the integrated system plan.
Electric Service Corporations
5. Requires an electric public service corporation operating in Arizona to file with the ACC quarterly reports regarding new extra high load factor customers, as prescribed in rule, that include, with respect to the immediately preceding quarter, the number of:
a) requests for interconnection; and
b) completed interconnections.
6. Allows the ACC, beginning two years after the general effective date, to suspend the quarterly report requirement by a majority vote if the numbers reported by the electric public service corporation are zero for at least two consecutive quarters.
7. Allows the ACC to vote to reinstate the quarterly report requirement at any time.
8. Reuqires an electric public service corporation that conducts integrated resource planning to include extra high load factor customers in the electric public service corporation's load growth projections for the integrated resource plan.
9. Allows the ACC to adopt rules, that establish required characteristics that govern the terms for electric service provided to extra high load factor customers that are not otherwise provided service under a pre-existing electric public service corporation tariff.
10. Allows the outlined required characteristics to include all of the following and ensure flexibility for an electric public service corporation to define specific terms for each transaction on a case-by-case basis:
a) provisions for minimum billing requirements;
b) minimum contract length;
c) provisions that govern early exit or termination of service before the term of a contract concludes;
d) requirements for customer-provided security, guarantees or collateral to support service contract obligations; and
e) requirements for extra high load factor customer payments to cover the costs of any infrastructure improvements, additions or expansion that are necessary to facilitate service to the customer, which must be supported by schedules filed by the electric public service corporation that demonstrate the protection of non-high load factor customers from cross-subsidization.
11. Exempts member-owned electric cooperatives from the prescribed reporting and rulemaking requirements.
Cost of Service Study
12. Requires an electric public service corporation operating in Arizona, within 180 days of the general effective date, to file with the ACC a cost-of-service study that shows the cost allocation of serving new extra high load factor customers.
13. Requires a public power entity that services more than 1,000,000 connections in Arizona, within 180 days of the general effective date, to file with the governing body of the public power entity a cost-of-service study that shows the cost allocation of serving new extra high load factor customers.
Miscellaneous
14. Contains a statement of legislative findings.
15. Becomes effective on the general effective date.
House Action
NREW 2/3/26 DPA 10-0-0-0
3rd Read 2/23/26 38-19-3
Prepared by Senate Research
March 13, 2026
SB/NRG/hk