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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
AMENDED
utilities; high load factor customers
Purpose
Requires public power entities and public service corporations in Arizona to file semiannual 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 semiannual reports regarding new extra high load factor customers, as defined by the public power entity that include, with respect to the immediately preceding six month period, 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 semiannual 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 six-month periods.
3. Allows the governing body to vote to reinstate the semiannual report requirement at any time.
Electric Service Corporations
4. Requires an electric public service corporation operating in Arizona to file with the ACC semiannual reports regarding new extra high load factor customers, as defined by the ACC, that include, with respect to the immediately preceding six-month period, the number of:
a) requests for interconnection; and
b) completed interconnections.
5. Allows the ACC, beginning two years after the general effective date, to suspend the semiannual report requirement by a majority vote if the numbers reported by the electric public service corporation are zero for at least two consecutive six-month periods.
6. Allows the ACC to vote to reinstate the semiannual report requirement at any time.
7. Allows
the ACC to establish required characteristics that govern the terms for
electric service that is provided to extra high load factor customers that are
not otherwise provided service under a pre-existing electric public
service corporation tariff.
8. 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 expansions that are necessary to facilitate service to the customer, which must be supported by schedules that are filed by the electric public service corporation and that demonstrate the protection of non-extra high load factor customers from subsidizing extra-high load factor customers.
9. Exempts member-owned electric cooperatives or electric public service corporations that serve 40,000 connections or less from the prescribed reporting and rulemaking requirements.
Cost of Service Study
10. Requires an electric public service corporation operating in Arizona, on the ACC's request and 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.
11. Requires a public power entity that services more than 1,000,000 connections in Arizona, on the governing body's request and 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.
12. Exempts member-owned electric cooperatives or electric public service corporations that serve 40,000 connections or less from the cost-of-service study requirements.
Miscellaneous
13. Repeals the reporting and rulemaking requirements for outlined public power entities and electric service corporations on January 1, 2034.
14. Contains a statement of legislative findings.
15. Becomes effective on the general effective date.
Amendments Adopted by Committee of the Whole
1. Extends the reporting requirement deadlines relating to new extra high load factor customers for electric public service corporations and public power entities from quarterly to semiannually.
2. Exempts electric public service corporations that serve 40,000 connections or less from the outlined reporting, rulemaking and the cost-of-service study requirements.
3. Removes the requirement that a public power entity or electric public service corporation that conducts integrated system planning include extra high load factor customers in the public power entities or electric public service corporations load growth projections for the integrated system plan.
4. Specifies that the cost-of-service study requirement for electric public service corporations and public power entities that serve over 1 million connections only applies if the cost-of-service study was requested by the Arizona Corporation Commission for electric public service corporations or by the governing body for outlined public service corporations.
5. Repeals the semiannual reporting requirements relating to new extra high load factor customers for public power and entities and electric service corporations on January 1, 2034.
6. Makes technical and conforming changes.
House Action Senate Action
NREW 2/3/26 DPA 10-0-0-0 NR 3/17/26 DP 5-2-1
3rd Read 2/23/26 38-19-3
Prepared by Senate Research
April 16, 2026
SB/NRG/hk