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Arizona Certificate of Convenience and Necessity (8-AZ-c)

Information current as of 2020
In Arizona, a public service corporation (developer) must obtain a Certificate of Convenience and Necessity prior to constructing a transmission project. Ariz. Rev. Stat. § 40-281. A “public service corporation” is defined, in part, as “all corporations other than municipal engaged in furnishing…electricity for light, fuel or power…” Arizona Const. Art. 15, Sec.2. Specifically, bulk transmission providers will fall under the class of public service corporations deemed “electric service providers.” An electric service provider is a “company supplying, marketing, or brokering at retail any Competitive Services pursuant to a Certificate of Convenience and Necessity.” Ariz. Admin. Code. § R14-2-1601(15). A wholesale transmission provider is still a public service corporation subject to regulation and CCN requirements. SWTC v. Arizona Corp. Comn, 142 P3d 1240 (2006).

The ACC regulates transmission siting process in the state of Arizona pursuant to the Ariz. Const., art. 15, Ariz. Rev. Stat. §§ 40-201–40-495, Ariz. Admin. Code §§ R14-2-101–R14-2-2520, and Ariz. Admin. Code §§ R14-3-101–R14-3-220.

Certificate of Convenience and Necessity Process

8-AZ-c.1 to 8-AZ-c.2 – Is the Developer a Public Service Corporation?

All developers meeting definition of a public service corporation and planning to construct a transmission project that will service ender users in Arizona must submit an application for a Certificate of Convenience and Necessity (CCN) to the ACC. Ariz. Admin. Code. § R14-2-1603(A).

8-AZ-c.3 – Articles of Incorporation

If the developer is a corporation, the developer must submit a certified copy of its Articles of Incorporation with the ACC before the ACC will issue the CCN. Ariz. Rev. Stat. § 40-282.

8-AZ-c.4 – Application for Certificate of Convenience and Necessity and Required Attachments

The developer must file an Application for Certificate of Convenience and Necessity with the Docket Control Center. The Application for Certificate of Convenience and Necessity must include:

  • A description of the electric services the developer intends to offer;
  • The proper name and correct address of the developer, and
* The full name of the owner if a sole proprietorship,
* The full name of each partner if a partnership,
* A full list of officers and directors if a corporation, or
* A full list of the members if a limited liability corporation;
  • A tariff for each service to be provided that states the maximum rate and terms and conditions that will apply to the provision of the service;
  • A description of the developer’s technical ability to obtain and deliver electricity if appropriate and to provide any other proposed services;
  • Documentation of the financial capability of the developer to provide the proposed services, including the most recent income statement and balance sheet, the most recent projected income statement, and other pertinent financial information. Audited information must be provided if available;
  • A description of the form of ownership (for example, partnership, corporation);
  • For a developer that is an affiliate of an Affected Utility, a statement of whether the Affected Utility has complied with the requirements of R14-2-1616, including the Commission Decision approving the Code of Conduct, where applicable; and
  • Such other information as the ACC or the staff may request.

Ariz. Admin. Code. § R14-2-1603(B).

The developer must report in a timely manner during the application process any changes in the information initially reported to the Arizona Corporation Commission in the application. Ariz. Admin. Code. § R14-2-1603(C).

For further information and specific application submission requirements see the Arizona Corporation Commission Application for a Certificate of Convenience and Necessity for Competitive Retail Electricity Services on the Arizona Corporation Commission Applications and Forms webpage.

8-AZ-c.5 – Provide Public Notice of Application

The developer must provide public notice of the application as required by the ACC. Ariz. Admin. Code. § R14-2-1603(D).

8-AZ-c.6 to 8-AZ-c.9 – Review Application Materials for Completeness

The ACC must review the application and notify the developer in writing that the application is either administratively complete or deficient within 120 days. If the application is deficient, the notice specifies the deficiencies. The developer has 60 days to remedy any and all deficiencies. If the developer does not remedy the deficiencies within 60 days, the ACC may terminate the application. If the developer does remedy the deficiencies within 60 days, the ACC has 90 days to notify the developer whether the corrected application is administratively complete or deficient.

Ariz. Admin. Code. § R14-2-1603(K).

8-AZ-c.10 to 8-AZ-c.12 – Serve Notice of Application Hearing on All Parties

The developer’s CCN application will be reviewed at a hearing. The ACC will serve notice of the place, date and time of the hearing on all parties at least 10 days prior to the hearing. Ariz. Admin. Code. § R14-3-109(A). If required, the developer must provide public notice of the hearings and file an Affidavit of Publication with the ACC at or prior to the time of the hearing. Ariz. Admin. Code. § R14-3-109(B).

8-AZ-c.13 – Hold Public Hearing

The ACC holds a hearing on the application for CCN. Ariz. Admin. Code. § R14-3-109(A). The developer, the ACC, and all other parties to the hearing will be permitted to introduce evidence, present testimony and call witnesses. Ariz. Admin. Code. § R14-3-109(G). The hearing will be open to the public. Ariz. Admin. Code. § R14-3-109(V).

8-AZ-c.14 to 8-AZ-c.15 – Does the ACC Approve the Application?

The ACC determines whether to approve the application for CCN. The ACC may deny certification to a developer who:

  • Does not provide the information required by Ariz. Admin. Code §§ R14-2-101–R14-2-2520;
  • Does not possess adequate technical or financial capabilities to provide the proposed services;
  • Seeks certification as a Load-Serving Entity and does not have an Electric Service Provider Service Acquisition Agreement with a Utility Distribution Company and Scheduling Coordinator, if the developer is not its own Scheduling Coordinator;
  • Fails to provide a performance bond, if required;
  • Fails to demonstrate that its certification will serve the public interest;
  • Seeks certification as a Load-Serving Entity and fails to submit an executed Service Acquisition Agreement with a Utility Distribution Company or a Scheduling Coordinator for approval by the Director, Utilities Division, prior to the offering of service to potential customers. Agreements are to be filed with the Compliance Section, Utilities Division.

Ariz. Admin. Code. § R14-2-1603(D).

If the ACC approves the application, the ACC issues a CCN. The ACC may issue a CCN that is effective for a specified period of time if the developer has limited or no experience in providing the retail electric service. Ariz. Admin. Code. § R14-2-1603(D). In addition, as a precondition to receiving a CCN, the ACC may require the developer to procure a performance bond sufficient to cover any advances or deposits the developer may collect from its customers or order that such advances or deposits be held in escrow or trust. Ariz. Admin. Code. § R14-2-1603(J). The CCN is subject to the following conditions:

  • Must comply with all ACC rules, orders, and other requirements relevant to the provision of electric service;
  • Must maintain accounts and records as required by the ACC;
  • Must file with the Director, Utilities Division, through the compliance section, all financial and other reports that the ACC may require and in a form and at such times as the ACC designates;
  • Must maintain on file with the ACC all current tarrifs and any service standards that the ACC requires;
  • Must cooperate with any ACC investigation of customer complaints;
  • Must obtain all necessary permits and licenses, including relevant tax licenses; and
  • Must comply with all disclosure requirements pursuant to Ariz. Admin. Code. § R14-2-1617.

Ariz. Admin. Code. § R14-2-1603(I).

8-AZ-c.16 to 8-AZ-c.17– Does the Developer Seek a Rehearing?

If the ACC denies the developer’s CCN, the developer may seek a rehearing before the ACC. If the developer seeks a rehearing, it must file an application for rehearing with the ACC within 20 days of the final order of the ACC. Ariz. Rev. Stat. § 40-253(A). The application must set forth the grounds on which the request for rehearing is based, and the ACC will not rely on any ground not set forth in the application. Ariz. Rev. Stat. § 40-253(C). The developer will not have a claim for judicial review in any court unless the developer first applies for a rehearing with the ACC. Ariz. Rev. Stat. § 40-253(B).

8-AZ-c.18 to 8-AZ-c.19 – Does the ACC Grant the Rehearing?

The ACC determines whether to grant or deny the application for rehearing. If the ACC does not grant or act on the developer’s application for rehearing within 20 days of its filing, the application is denied. Ariz. Rev. Stat. § 40-253(A). If the ACC grants the application, the ACC must promptly hear the matter and make a determination within 20 days after final submission. Ariz. Rev. Stat. § 40-253(A). When the ACC grants the rehearing it will consider all pertinent facts (including those arising since the prior ACC order) to determine whether any aspect of its original order is unjust, unwarranted, or should be changed. Ariz. Rev. Stat. § 40-253(E). If the ACC denies the developer’s application for rehearing, the developer may pursue judicial review in the Superior Court. Ariz. Rev. Stat. § 40-254(A).

8-AZ-c.20 to 8-AZ-c.21 – Does the ACC Approve the Application upon Rehearing?

If the ACC rules in favor of the developer on rehearing, the ACC grants the CCN to the developer. If the ACC rules against the developer on rehearing, the developer may seek judicial review in the Superior Court. Ariz. Rev. Stat. § 40-254(A).

8-AZ-c.22 to 8-AZ-c.24 - Notice of Appeal – Superior Court

Jurisdiction over the denial of a CCN application lies in the Superior Court of the county in which the ACC has its office. The developer must file a notice of appeal within 30 days after the denial of a rehearing by the ACC or within 30 days of being served with a copy of the ACC decision to be reviewed. Ariz. Rev. Stat. § 40-254(A). The notice must contain a statement of the findings to be reviewed. Ariz. Rev. Stat. § 12-909(A). The developer must serve the notice of appeal on the ACC and all other parties within 10 days of the developer’s filing of the notice of appeal. Ariz. Rev. Stat. § 12-904. The ACC must file an answer to the complaint within 20 days of receiving notice. Ariz. Rev. Stat. § 40-254(A). If the ACC rescinds the CCN denial, the case is dismissed. Ariz. Rev. Stat. § 40-254(B). If the ACC modifies or amends the order, the altered, modified or amended order replaces the original order complained of for purposes of the judicial review. Ariz. Rev. Stat. § 40-254(B).

8-AZ-c.25 to 8-AZ-c.27 – Review ACC Decision

The Superior Court holds an evidentiary hearing, including testimony and argument. The court may hear testimony from witnesses, whether or not they testified at the ACC hearing. Ariz. Rev. Stat. § 12-910(A). The burden of proof is on the developer to show by clear and satisfactory evidence that the decision to deny the CCN is unreasonable or unlawful. Ariz. Rev. Stat. § 40-254(E). If the Superior Court rules in favor of the developer, the ACC will grant the CCN. If the Superior Court rules against the developer, the project cannot continue. In either instance the ACC, the developer, or the state Attorney General may appeal the decision to the Arizona Supreme Court within 30 days of the Superior Court judgment. Ariz. Rev. Stat. § 40-254(D).

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