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Arizona business leaders back new utility rate plan
Members of the Arizona business community, including the Arizona Chamber of Commerce & Industry, have come out in support of a proposal by Arizona Corporation Commission Chairman Jim O’Connor and Commissioner Nick Myers to adopt Formula Rate Plans. This plan aims to provide more predictable rates for ratepayers and reduce regulatory lag.
Formula Rate Plans are a method of setting utility rates using a formula that automatically adjusts prices based on cost factors, allowing for regular rate updates without lengthy regulatory procedures. This helps keep utility revenue in line with costs by adjusting rates in response to factors like fuel prices.
The Arizona Chamber wrote in a letter to the Commission that formulaic ratemaking has been successful in other states and will benefit Arizona customers. The proposal was passed by the Commission with a 3-2 vote, with O’Connor, Thompson, and Myers in support. The plan includes amendments requiring utility companies to undergo a full rate case every five years.
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Photo credit chamberbusinessnews.com
