Arizona Corporation Commission Chair Lea Márquez Peterson Reflects on First 100 Days

Arizona Corporation Commission Chairwoman Lea Márquez Peterson reflected on her first 100 days in office as both a newly-elected statewide official and as the chairperson of an agency which regulates everything from business formations and the unlicensed sale of securities, to railroad safety, and the rates electric and water companies can charge on monthly bills.

The chairwoman, a Tucsonan, University of Arizona alumna and former president and CEO of the Tucson Hispanic Chamber, noted that while there is always room for improvement and more work to be done, positive steps have been taken on the following issues since she was elected chair on January 4, 2021:

• 100 Percent Clean Energy. Chairwoman Márquez Peterson is allowing changes to Arizona’s administrative code to move forward that, if adopted by the Commission, will allow free market principles and technological innovation in Arizona’s energy sector drive Arizona’s for-profit electric utilities toward 100 percent clean energy by the year 2050. Under the proposed energy rules, resources such as nuclear, natural gas, and Arizona-derived forest biomass will count to ensure Arizona’s grid remains reliable through the transition, while resources such as solar, wind, and hydrogen will help to make Arizona’s grid more sustainable, years into the future. Chairwoman Márquez Peterson is also ensuring a cost and benefit analysis will be completed, which will verify the impact of the proposed changes on Arizona ratepayers. “I support the goal for 100 percent clean energy and all efforts to ensure that our proposed changes will result in the lowest cost to Arizona’s families,” said Chairwoman Márquez Peterson. “The Commission must complete all due diligence necessary to ensure our rules represent the most affordable path forward.” Businesses in Arizona’s growing technology sector support the Commission’s proposal for 100 percent clean energy.
  
• Permanent Electric and Gas Disconnection Rules. Chairwoman Márquez Peterson prioritized the adoption of permanent disconnect rules by placing the item on each of the Commission’s monthly agendas to ensure it would be completed in a timely manner. After much discussion during the Commission’s monthly meeting in April, the Commission adopted a standard that prevents for-profit utilities from disconnecting residential customers for non-payment when the temperature outside is 95 degree or hotter or anytime between the calendar dates of June 1 – Oct 15. The vote to move forward with the proposed rules initiated a formal rulemaking process, which will include additional opportunities for members of the public to provide comments on the rules. In 2021, customers will be protected from being disconnected from June 1 to October 15 while the new rules advance through the process.
  
• Streamlined Small Water Company Proposal. Chairwoman Márquez Peterson initiated a process to improve the policies and procedures surrounding rate cases filed by water utilities which collect less than $1 million annually. The reasons for such a proposal are numerous. First, she seeks to streamline the rate filing process. Second, she’d like to reduce the amount of paperwork involved. Last, but not least, Márquez Peterson would like to improve the certainty of outcome for owners who are willing to increase their rates gradually over time during subsequent rate cases. The Chairwoman has been concerned with dramatic rate increases on residents throughout the state, especially in rural communities and says owners need to come in every three to five years to ensure rates are adequate to maintain the system. Chairwoman Márquez Peterson seeks a policy that would institutionalize the principles of gradualism in the Commission’s rate filing procedures.
  
• Rural Broadband Development. Recently, Chairwoman Márquez Peterson presented a proposal to transform an outdated landline subsidy into a broadband grant program that would be consistent with the Commission’s stated goal to provide the “broadest connectivity reasonably attainable” and help applicants deliver high-speed internet to rural Arizona. The Chairwoman is conducting additional research and working with stakeholders to answer questions related to the Commission’s jurisdiction, as well as to the best possible uses for the funds, such as to help cover the cost of hiring grant writers for small cities and towns, help provide matching funds for large federal programs, or help cover the cost of pole attachment agreements between broadband providers and electric utilities that already have poles in place. 
  
• Hydrogen Production in Arizona. Within her first eight days in office, the Commission approved a special contract between Arizona Public Service Company (“APS”) and Nikola Motor Corporation to enable hydrogen fuel production in Arizona. The contract will help to reduce the overall cost for APS to serve its customers by incentivizing Nikola to produce hydrogen when energy demand is lowest and curtail production when demand is the highest, which will flatten the overall demand on the grid and reduce the per kilowatt hour costs to APS customers. Approval of the contract will help Arizona not only move toward a cleaner energy economy, but also become the premier hydrogen producer in the nation.
  
• Approved two 80 MW Solar Projects. In March, the Commission approved two 80 megawatt solar projects that will be located in Coconino County in northern Arizona. The projects would not have been possible had the Commission not adopted an amendment Chairwoman Márquez Peterson and another commissioner proposed jointly last year, which gave developers a reasonable opportunity to attract capital from potential investors. Under the approved purchase power agreements, APS will enter into 18-year contracts with each of the qualifying facilities at a price that is based on APS’ long-term avoided cost rate, which represents the lowest price possible for a given resource. The solar facilities are expected to be operational in 2023.
  
• Lawrence Berkeley National Laboratory. Recently, the Commission voted unanimously to engage the Lawrence Berkeley National Laboratory for technical assistance at no cost to the state on the development of a program that will allow for the compensation and synchronization of potentially millions of smart devices on the grid. On March 1, 2021 Acting Assistant Secretary for Energy Efficiency and Renewable Energy at the United States  Department of Energy said in a press release, “We are eager to work with states, utilities and other stakeholders to aid the delivery of clean, reliable, affordable power to homes and businesses.”
  
• Latinas Represented in Statewide Office. In the last decade, Arizona’s Latino population has boomed and now represents close to 35 percent of the total state population.  However, statewide political representation has not effectively reflected the growth of this vibrant community. The most recent statewide elected representative of Hispanic descent was Raúl Castro, who was elected governor in 1974. With their electoral victories in November 2020, Chairwoman Márquez Peterson and fellow Latina Arizona Corporation Commissioner Anna Tovar have emerged as the first Latinas in the history of the state to be elected to statewide office. 
  
• PFAS and PFOA. After receiving alarming reports from local media outlets, Chairwoman Márquez Peterson called an emergency special meeting and supported a fellow commissioner in the investigation of PFOA and PFAS in drinking water of regulated water utilities near Luke Air Force Base in the West Valley. At this virtual meeting, representatives from Valley Utilities Water Company, Tierra Buena Water Company, and Liberty Utilities answered questions regarding the “forever chemicals” found in Luke Air Force Base residents’ and business owners’ drinking water.
  
• Neutral Position at the Legislature. For the first time in the Commission’s recent history, the Commission has placed politics aside and taken “neutral” positions on bills being debated in the Arizona State House and Senate that could affect the statutory frameworks under which the Commission operates. “As elected officials, we take oaths to uphold the laws and constitution of this state,” said Chairwoman Márquez Peterson. “Whether we personally like or dislike a bill, if the bill becomes law and is constitutional, then as both regulators and citizens, we will comply with the law.” The Chairwoman emphasized that while individual commissioners may sign in opposition or support of individual bills, there is a difference between the acts and conduct of individual commissioners and the acts and conduct of the Commission, as a whole.
  
• Energy Reliability Summit. In the wake of rolling blackouts and power outages that occurred in Texas and California last winter and summer, respectively, the Commission hosted an Energy Reliability Summit and invited state legislators to attend to assure Arizona families that they would not experience the same failures that occurred in Texas and California. With reliable access to electricity literally being a matter of life and death in Arizona, as well as the fuel that powers the state’s economy, Commissioner Márquez Peterson has ensured that reliability is at the forefront of regulators’ minds at all times.
  
• Supplier Diversity. Chairwoman Márquez Peterson offered a proposal for the Commission to establish an annual “Supplier Diversity Summit” where executives from the largest regulated utilities in Arizona would present their supplier diversity data to the Commission.
  
• Implemented Earlier Public Meeting Notice. Charting a new path for transparency and public engagement at the Commission, Chairwoman Márquez Peterson embarked on an effort to issue monthly public meeting notices and agendas earlier than previous chairpersons, giving commissioners and members of the public more time to know what’s coming and to be able to participate in the Commission’s monthly meetings. Chairwoman Márquez Peterson continues to work to improve the Commission’s internal policies and procedures, so commissioners have the tools and assistance they need, prior to entering open meetings, improving the overall flow –and saving time and costs for everyone.
  
• Code of Ethics. After receiving substantial requests from the public to strengthen the Commission’s Code of Ethics, the Arizona Corporation Commission under Chairwoman Márquez Peterson adopted several substantive revisions to the Code, which closed loopholes for commissioners and candidates running for Corporation Commission. The revisions reduce the temptation for commissioners to use their official positions for future personal or political gain and reduce the propensity of outside interests to exert undue influence at the Commission, thereby rehabilitating the Commission’s independence as a state agency. The revisions include new rules for decorum, new disclosure requirements for outside employment and campaign contributions, and new rules that prohibit commissioners from owning stock or accepting campaign contributions from any person or entity that has more than a de minimis interest in the outcome of decisions at the Commission.
  
• Consistent and Transparent Commission Policies. Chairwoman Márquez Peterson identified the Commission’s unwritten policies & procedures as an additional priority. Her focus is to increase transparency for the public and issue decisions and policies that are fair, balanced, and reasonable for all parties involved.
  

“Working to achieve progress for Arizonans has been both challenging and rewarding,” said Chairwoman Márquez Peterson. “The process to make improvements has been more difficult than I had originally imagined, but we have made significant strides so far, and I believe we will continue to make strides, as we go forward.”

“None of these steps would have been possible without the support and collaboration of my fellow commissioners. I alone, am not responsible for our successes. It is truly a team effort.”

“I look forward to the rest of 2021 and to the rest of my term in office. I also look forward to the additional good we can accomplish when we set politics aside and strive to work together, to take the time to study and debate the issues, and to truly delve  into the policies that are before us.”