Section R14-2-107. Electric or Natural Gas Cooperative Alternative Rate Application Filing Requirements and Process

A.   Definitions. In this Section, unless otherwise specified:

of a public service corporation’s property within Arizona and established a schedule of rates and charges for the public service corporation’s provi- sion of utility services within Arizona, and

c.         Not issued under A.R.S. § 40-252.

9.        “Non-price tariff change” means modification of one or more tariff provisions, either through altering existing tar- iff language or adding new tariff language, in a manner that substantively alters a requirement other than a rate or charge.

10.     “Rate schedule” means a schedule of rates and conditions for a specific classification of customer or for other spe- cific services.

11.     “Rate structure change” means any of the following:

a.         Introduction of a new rate schedule;

b.        Elimination of an existing rate schedule;

c.         A change in base revenue generated by any one rate class greater than 150% of the overall base revenue increase;

d.        A change greater than 25% in the customer charge within a rate schedule for residential customers; or

e.         A change in the rate blocks or the percentage rela- tionship of the prices among rate blocks.

12.     “RUS” means United States Department of Agriculture, Rural Utilities Service.

13.     “Staff” has the same meaning as in R14-2-103.

14.     “Test year” means the one-year historical period used in determining rate base, operating income, and rate of return, which shall have an ending date within nine months before the filing date for a rate application under this Section and shall include at least six months during which a cooperative’s current rates and charges were in effect.

15.     “Timely” means in the manner and before the deadline prescribed in this Section.

1.	“Base revenue” means the revenue generated by perma-	B.	Eligibility Requirements. A cooperative may file and pursue a
	nent rates and charges, excluding:		rate application under this Section rather than R14-2-103 if all
	a.      Revenue generated through adjustor mechanisms,		of the following eligibility requirements are met:
	and		1.     The cooperative is classified as a Class A, B, or C utility
	b.     Revenue generated through miscellaneous service		under R14-2-103(A)(3)(q);
	charges.		2.     A full permanent rate case decision for the cooperative
2.	“CFC” means the National Rural Utilities Cooperative		has been issued within the 180-month period immediately
	Finance Corporation.		preceding the filing of the cooperative’s rate application;
3.	“Commission” means the Arizona Corporation Commis-		3.     The cooperative has not filed a rate application under this
	sion.		Section within the 12 months immediately preceding the
4.	“Cooperative” means a legal entity that is:		filing of the cooperative’s rate application;
	a.      A  domestic   corporation  or  a   foreign  corporation		4.     The cooperative’s rate application is the first, second,
	authorized to transact business in this state;		third, fourth, or fifth rate application filed by the coopera-
	b.     Operated as a not-for-profit or non-profit;		tive under this Section since its last full permanent rate
	c.      Owned and controlled by its members; and		case decision was issued;
	d.     Operating as a public service corporation in this		5.     The cooperative is required by law or contract to make a
	state by providing either electric utility services or		certified annual financial and statistical report to a federal
	natural gas utility services.		agency, such as RUS or FERC, or an established national
5.	“Docket Control” means the organizational unit within		non-profit lender that specializes in the utility industry,
	the Commission’s Hearing Division that accepts, records,		such as CFC or CoBank.
	and maintains filings.		6.     The test year used in the cooperative’s rate application
6.	“FERC” means the Federal Energy Regulatory Commis-		complies, without waiver, to the definition of a test year
	sion.		in subsection (A);
7.	“File”  means  to  submit  to  Docket  Control,   with  the		7.     The cooperative’s rate application includes audited finan-
	required number of copies and in an acceptable format,		cials for a period ending no more than nine months before
	for recording under an appropriate docket number.		the beginning of the test year;
8.	“Full permanent rate case decision” means a Commission
	decision:

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8.        The cooperative’s rate application does not propose an increase in total base revenue amounting to more than 6% of the actual test year total base revenue;

9.        The cooperative’s rate application uses its original cost rate base as its fair value rate base;

10.     The cooperative’s rate application proposes only a change in rates and charges and does not propose any of the fol- lowing:

a.         A change in an existing adjustor or surcharge mech- anism;

b.        Adoption of a new adjustor or surcharge mechanism, unless incorporating a charge or charges otherwise previously approved by the Commission; or

c.         Adoption of a new hook-up fee or another new type of fee;

11.     The cooperative’s rate application does not propose a rate structure change or a non-price tariff change;

12.     The cooperative’s rate application does not request financing approval or other approvals and does not request consolidation with another docket;

13.     The customer notice provided by the cooperative con- formed to the requirements of subsection (D) and was approved by Staff;

14.     For a distribution cooperative, the objections timely sub- mitted by the cooperative’s customers represent no more than 5% of all customer accounts or no more than 1,000 customer accounts, whichever is fewer; and

15.     For a generation or transmission cooperative, no member distribution cooperative has filed a timely objection to the application, and the objections timely submitted by retail customers served by member distribution cooperatives represent no more than 3,000 customer accounts.

C.      Pre-Filing Requirements. Before filing a rate application under this Section, a cooperative shall:

1.        Analyze  the  cooperative’s  eligibility  under  subsection

D.      Notice Requirements. A cooperative shall ensure that the Notice sent as required under subsection (C)(5) is in a form approved by Staff and that it includes, at a minimum, all of the following:

1.        The cooperative’s name and contact information;

2.        The docket number assigned to the cooperative’s rate application proceeding;

3.        A summary of the rate relief requested by the cooperative in its rate application;

4.        For a distribution cooperative, the monthly bill impact to a residential customer with average usage and to a resi- dential customer with median usage if the requested rate relief were granted by the Commission;

5.        For a distribution cooperative, the monthly bill impact to a residential customer with average usage and to a resi- dential customer with median usage if the cooperative were granted rate relief equal to a 6% increase of the actual test year total base revenue;

6.        For a generation or transmission cooperative, the esti- mated rate and revenue impact to each member distribu- tion cooperative served if the requested rate relief were granted by the Commission;

7.        Instructions for viewing or obtaining filed documents;

8.        Information regarding the Commission’s process under this Section;

9.        The deadline to file intervention requests and objections, which shall be a date no earlier than 30 days after the date Notice is mailed to customers;

10.     Instructions for requesting intervention and submitting objections; and

11.     Information regarding disability accommodations.

E.       Filing Requirements. No later than 50 days after completing the provision of Notice as required by subsection (C)(5), a cooperative may file in the assigned docket a rate application under this Section, which shall include the following:

	(B);	1.	The legal name of the cooperative and identification of
2.	Submit to Staff, in both hard copy and electronic (with		the test year;
	formulae intact) formats, a Request for Pre-Filing Eligi-	2.	A waiver of the use of reconstruction cost new rate base
	bility Review, which shall include a draft application		to determine the cooperative’s fair value rate base;
	including the items and information described in subsec-	3.	A copy of the most recent certified annual financial and
	tions (E)(1) through (6), a copy of the Proposed Form of		statistical report submitted by the cooperative to a federal
	Notice to be sent to the cooperative’s customers, and a		agency, such as RUS or FERC, or an established national
	Proposed Form of Recommended Order;		non-profit lender that specializes in the utility industry,
3.	No sooner than 30 days after the date Staff receives the		such as CFC or CoBank;
	Request for Pre-Filing Eligibility Review, meet with Staff	4.	A copy of audited financials for the cooperative, for a
	to discuss the cooperative’s eligibility under subsection		period ending no earlier than nine months before the
	(B) and any Staff modifications to the Proposed Form of		beginning of the test year;
	Notice;	5.	The information listed in the table in R14-2-103(B)(1) for
4.	After meeting with Staff, if the cooperative decides to		Schedules A-1, A-4, and A-5, which shall be submitted in
	pursue  a  rate  application  under  this  Section,   file  a		the format provided in Appendix Schedules A-1, A-4,
	Request  for  Docket  Number  and  Proposed  Form  of		and A-5;
	Notice for Staff approval; and	6.	The information listed in the table in R14-2-103(B)(1) for
5.	At least 20 days before filing a rate application under this		Schedules B-2, B-5, C-1, C-2 (if applicable), C-3 (if a
	Section, provide Notice of the application, conforming to		taxable entity), D-2, E-1, E-2 (with the same year-ending
	the requirements of subsection (D) and as approved by		date as the test year and the same level of detail as shown
	Staff, as follows:		for the test year in Schedule C-1), E-5 through E-7, E-8
	a.      If a distribution cooperative, by sending the Notice,		(if a taxable entity), E-9, F-1, F-2, F-3, F-4, and H-1
	by First Class Mail, to each of the cooperative’s cus-		through H-5, which:
	tomers; and		a.      Shall be included on schedules labeled consistently
	b.     If a generation or transmission cooperative, by pub-		with and containing the substantive information cor-
	lishing the Notice in at least one newspaper of gen-		responding to the Appendix Schedules,
	eral  circulation   in  the   service  territory  of  each		b.     Shall conform to the instructions and notes con-
	member  distribution   cooperative  served  and   by		tained on the corresponding Appendix Schedules,
	sending the Notice, by First Class Mail, to each		c.      May be submitted in the format provided in the
	member distribution cooperative served.		Appendix Schedules or  formatted in an alternate
			manner, and

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d.        May omit information that is not applicable to the cooperative’s operations;

7.        A copy of the Notice sent and, if applicable, published, as required under subsection (C)(5); and

8.        Proof that the Notice was sent and, if applicable, pub- lished, as required under subsection (C)(5), at least 20 days, and no more than 50 days, before the date the rate application is filed.

F.       Pre-Eligibility-Review Objections and Requests. Any person desiring to object to the cooperative’s rate application or to request intervention in the cooperative’s rate case shall file an objection or request no later than the date specified in the Notice provided pursuant to subsection (C)(5).

G.      Late Objections. In determining the cooperative’s eligibility to proceed with its rate application under this Section, Staff shall not consider any objection that is filed after the deadline in the Notice provided pursuant to subsection (C)(5).

H.      Eligibility and Sufficiency Review. Within 14 days after the deadline for objections and intervention requests specified in the Notice provided pursuant to subsection (C)(5), Staff shall:

1.        Review the cooperative’s rate application, along with any objections timely filed under subsection (F), to determine whether the cooperative is eligible, under subsection (B), to pursue its rate application under this Section;

2.        File either a Notice of Eligibility or a Notice of Ineligibil- ity;

3.        If the cooperative is eligible, complete the following:

a.         Conduct a sufficiency review of the cooperative’s rate application;

b.        Determine whether the rate application complies with the requirements of subsection (E); and

c.         File either a Notice of Sufficiency that classifies the cooperative as provided in R14-2-103(A)(3)(q) or a Notice of Deficiency that lists and explains each defect in the rate application that must be corrected to make the rate application sufficient.

I.        Eligibility and Sufficiency Determinations. Staff’s determina- tions of eligibility, ineligibility, sufficiency, and deficiency are final and are not Commission decisions or Commission orders under A.R.S. §§ 40-252 and 40-253.

J.        Request for Processing under R14-2-103. Within 30 days after a Notice of Ineligibility is filed, a cooperative may file a Request for Processing under R14-2-103. If a cooperative files a Request for Processing under R14-2-103, all further activity under this Section shall cease, and the cooperative’s rate appli- cation shall be deemed a new rate application, filed under R14-2-103, on the date the Request for Processing under R14- 2-103 is filed.

K.      Docket Closure. If a Request for Processing under R14-2-103 is not filed within 30 days after a Notice of Ineligibility is filed, the Hearing Division shall issue a procedural order administratively closing the docket.

L.       Action on Notice of Deficiency. After Staff files a Notice of Deficiency:

1.        The cooperative shall promptly address each defect listed in the Notice of Deficiency and file all necessary correc- tions and information to bring the rate application to suf- ficiency; and

2.        Within 14 days after receiving the cooperative’s correc- tions and information, Staff shall again take the actions described in subsections (H)(3) through (5).

M.     Substantive Review and Staff Report. After Staff files a Notice of Sufficiency, Staff shall:

1.        Conduct a substantive review of the rate application;

2.        Prepare a Staff Report that shall include Staff’s recom- mendations and may include a Request for Hearing that complies with subsection (O);

3.        If including a Request for Hearing, file the Staff Report within the following number of days after the Notice of Sufficiency is filed:

a.         If the cooperative is a Class A utility, 100 days;

b.        If the cooperative is a Class B utility, 100 days; and

c.         If the cooperative is a Class C utility, 75 days; and

4.        If not including a Request for Hearing, file the Staff Report and a Recommended Order within the following number of days after the Notice of Sufficiency is filed:

a.         If the cooperative is a Class A utility, 120 days;

b.        If the cooperative is a Class B utility, 120 days; and

c.         If the cooperative is a Class C utility, 95 days.

N.      Responses to Staff Report. Within 10 days after Staff files a Staff Report:

1.        The cooperative shall file a Response to the Staff Report, which may include a Request for Hearing that complies with subsection (O) or a Request for Withdrawal; and

2.        Each intervenor shall file a Response to the Staff Report, which may include a Request for Hearing that complies with subsection (O).

O.      Request for Hearing. A Request for Hearing shall include, at a minimum, an explanation of the requesting party’s reasons for believing that an evidentiary hearing should be held; a sum- mary of each issue on which the party believes  evidence should be provided; and a recitation of the witnesses and docu- mentary evidence that the requesting party believes could be produced to provide evidence on each issue.

P.       Action on Request for Hearing. The Hearing Division shall rule on each Request for Hearing and may require party responses, including oral argument, or other proceedings at its discretion in considering a Request for Hearing. If a hearing is granted, the Hearing Division shall preside over all further proceedings in the case.

Q.      Action on Request for Withdrawal. The Hearing Division shall rule on each Request for Withdrawal and may require party responses, including oral argument, or other proceedings at its discretion in considering a Request for Withdrawal. If with- drawal is granted, the Hearing Division shall issue a proce- dural order administratively closing the docket.

R.      Requirement for Service. A party that files a document under this Section shall also serve a copy of the document on each other party to the case, by a method conforming to the require- ments of A.A.C. R14-3-107(B) and (C).

S.       Revenue Increase Cap. No Commission decision issued under this Section shall increase a cooperative’s base revenue by more than 6% of the cooperative’s actual test year total base revenue.

T.       The Commission may, at any stage in the processing of a cooperative’s rate application under this section, determine that the rate application shall instead proceed under R14-2- 103.

Historical Note

New Section made by final rulemaking at 19 A.A.R. 397, effective April 9, 2013 (Supp. 13-1).

Note

Editor’s Note: The following Section was amended under an exemption from the Attorney General approval provisions of the Arizona Administrative Procedure Act (State ex. rel. Corbin v. Arizona Corporation Commission, 174 Ariz. 216 848 P.2d 301 (App. 1992)), as determined by the Corporation Commission. This exemption means that the rules as amended were not approved by the Attorney General.

Corporation Commission – Fixed Utilities