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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
utility; resource plan; commission review
Purpose
Outlines an integrated resource plan (plan) and requires an electric public service corporation submit the plan to Arizona Corporation Commission (ACC) every 3 years.
Background
The Arizona Constitution deems all corporations, other than municipal, engaged in furnishing gas, oil or electricity for light, fuel, power, water for irrigation, fire protection or other public purposes, or in furnishing, for profit, hot or cold air or steam for heating or cooling purposes as public service corporations. Corporations, other than municipal, that engage in collecting, transporting, treating, purifying and disposing of sewage through a system for profit or that transmit messages or furnish public telegraph or telephone service, and all corporations other than municipal, operating as common carriers are also deemed public service corporations (Ariz. Const. art. 15 § 2).
In supervising and regulating public service corporations, the ACC's
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, notwithstanding any other law, 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
Integrated Resource Plan
1. Requires the ACC to require an electric public service corporation in this state to prepare and submit a plan to the ACC for review and approval at least once every three years.
2. Requires the plan to:
a) project energy demand for the next 15 years, including at least three scenarios that project low, medium and high load growth scenarios;
b) summarize and quantify all existing electric generation plants the public service corporation uses to meet existing and future demands, less any planned retirements, and identify each electric generation plant that is scheduled to retire or that the ACC has approved to retire within the next 15 years;
c) identify all electric generation plants that are not yet constructed or that are not currently owned, operated or used by the public service corporation and that could be constructed or could be purchased, operated or otherwise used or relied on to meet the difference between existing generating capacity and future energy demand in the next 15 years;
d) analyze the total estimated capital and operating expenditures for each electric generation plant, combination of plants and combination of ownership structures over the useful life of each plant or combination of plants;
e) analyze the total reliability value, including effective load carrying capability, for each electric generation plant and combination of plants to ensure reliable electric service is available to retail electric customers in each year for the next 15 years;
f) determine, using the ratepayer impact measure test, the combination of electric generation plants and ownership structures of the plants and that result in:
i. the lowest overall lifetime revenue requirement for the electric public service corporation over the useful life of the relevant plants;
ii. the safest and most reliable electric service for retail electric customers in each of the next 15 years; and
iii. the intent or design not being meant to satisfy any carbon or emissions reduction goal;
g) provide a cost analysis, when evaluating total estimated capital and operating expenditures, that assumes any subsidies, grants or credits that are currently available to the public service corporation will continue to be available to the public service corporation over all or part of the next 15 years;
h) require the cost analysis to take into consideration the statutory deadlines and a cost analysis that assumes subsidies, grants or credits will not be available to the public service corporation over the next 15 years;
i) provide, as a separate analysis and if feasible, the total estimated upstream and downstream carbon dioxide emissions and greenhouse gas equivalents of each electric generation plant and combination of plants over the useful life of each plant and includes:
i. scope emissions, scope 2 emissions and scope 3 emissions for each plant;
ii. the parts, minerals, metals, materials and components of each plant; and
iii. the manufacture, production, transportation, decommissioning and recycling of each plant and each plant's respective parts, minerals, metals, materials and components; and
j) include a description of all modeling assumptions that are used in each portfolio.
Independent Third-Party Evaluation
3. Requires the ACC, before the approving or denying a public service corporation's plan, to obtain and review an evaluation that is conducted by an independent third party.
4. Requires the evaluation to verify the public service corporation's information provided by the plan.
5. Requires the evaluation to present alternative information, estimates, analyses, evaluations or assumptions related to:
a) the public service corporation's low, medium or high load growth scenarios;
b) the public service corporation's estimate of total capital and operating expenditures for each plant or a combination of plants or ownership structures for those plants over the useful life of each plant;
c) the public service corporation's measure of reliability, such as effective load carrying capacity for a plant or combination of plants; and
d) whether the public service corporation could safely and reliably meet projected demand at a lower cost with less capacity if more reliable and dispatchable sources of power were included.
6. Requires the evaluation to use the ratepayer impact measure test, makes a recommendation regarding the combination of plants and ownership structures for those plants that result in the lowest overall lifetime revenue requirement and reliability requirements.
7. Deems, the ACC's decision is not binding on future rate cases if the ACC approves a plan.
8. Requires a plan that complies with the prescribed requirements and that has been approved by the ACC, to serve as evidence of all relevant conditions known, or that in the exercise of reasonable judgment could have been known, by an electric public service corporation during the three year period between plans, unless the public service corporation provides substantial evidence of new or alternative conditions that the public service corporation became aware of after the ACC approved the plan.
9. Allows the ACC to include additional requirements relating to the plan and evaluation.
Request for Proposals
10. Requires an electric public service corporation to the request for proposals to the ACC for approval, in addition to any other requirements imposed by the ACC by rule, before issuing a request for proposals for the generation of electricity.
11. Requires a request for proposals to be competitive, technology agnostic and open to all types of generation.
12. Prohibits a request for proposals from including any criteria that would discriminate against a resource on the basis of carbon emissions.
13. Requires, to the maximum degree practicable, a request for proposals to prioritize reliability and affordability and be designed to result in contracts for resources that provide reliable electricity at the lowest cost.
14. Requires the ACC to appoint an independent monitor to oversee each request for proposal to ensure compliance with the prescribed requirements.
15. Requires an electric public service corporation to report to the ACC the result of a request for proposals including the resources the electric service corporation contracted and evidence supporting that resource or the resources being selected instead of other proposed resources.
Miscellaneous
16. Defines commission, electric generation plant, electric service, and retail electric customer.
17. Defines ratepayer impact measure test as a test that measures the change in customer bills or rates due to changes in the utility's capital and operating expenses caused by the utility's investment or procurement decisions in a particular electric generation plant, combination of plants or combination of ownership structures associated with the plants.
18. Becomes effective on the general effective date.
House Action
NREW 2/17/26 DPA 6-2-0-2
3rd Read 3/3/26 32-24-3-0-1
Prepared by Senate Research
March 13, 2026
SB/NRG/hk