Section R14-2-1603. Certificates of Convenience and Necessity

A.      Any Electric Service Provider intending to supply Competitive Services shall obtain a Certificate of Convenience and Neces- sity from the Commission pursuant to this Article. An Affected Utility need not apply for a Certificate of Conve- nience and Necessity to continue to provide electric service in its service area during the transition period set forth in R14-2- 1604. A Utility Distribution Company providing Standard Offer Service, or services authorized in R14-2-1615, after Jan- uary 1, 2001, need not apply for a Certificate of Convenience and Necessity. All other Affected Utility affiliates created in compliance with R14-2-1615(A) shall be required to apply for appropriate Certificates of Convenience and Necessity.

B.       Any company desiring such a Certificate of Convenience and Necessity shall file with the Docket Control Center the required number of copies of an application. In support of the request for a Certificate of Convenience and Necessity, the fol- lowing information must be provided:

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1.        A description of the electric services that the applicant intends to offer;

2.        The proper name and correct address of the applicant, and

a.         The full name of the owner if a sole proprietorship,

b.        The full name of each partner if a partnership,

c.         A full list of officers and directors if a corporation, or

d.        A full list of the members if a limited liability corpo- ration;

3.        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;

4.        A description of the applicant’s technical ability to obtain and deliver electricity if appropriate and to provide any other proposed services;

5.        Documentation of the financial capability of the applicant 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 shall be pro- vided if available;

6.        A description of the form of ownership (for example, partnership, corporation);

7.        For an applicant 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 Com- mission Decision approving the Code of Conduct, where applicable; and

8.        Such other information as the Commission or the staff may request.

C.      The applicant shall report in a timely manner during the appli- cation process any changes in the information initially reported to the Commission in the application for a Certificate of Convenience and Necessity.

D.      The applicant shall provide public notice of the application as required by the Commission.

E.       At the time of filing for a Certificate of Convenience and Necessity, each applicant shall notify the Affected Utilities, Utility Distribution Companies, or an electric utility not sub- ject to the jurisdiction of the Arizona Corporation Commission in whose service territories it wishes to offer service of the application by providing a copy of the application to the Affected Utilities, Utility Distribution Companies, or an elec- tric utility not subject to the jurisdiction of the Arizona Corpo- ration Commission. No later than 10 days after application is filed, each applicant shall provide written notice to the Com- mission, through Docket Control, that it has provided notifica- tion to each of the respective Affected Utilities, Utility Distribution Companies, or an electric utility not subject to the jurisdiction of the Arizona Corporation Commission. The attachment to the CC&N application should include a listing of the names and addresses of the notified Affected Utilities, Utility Distribution Companies or an electric utility not subject to the jurisdiction of the Arizona Corporation Commission.

F.       The Commission may issue a Certificate of Convenience and Necessity that is effective for a specified period of time if the applicant has limited or no experience in providing the retail electric service that is being requested. An applicant receiving such approval shall have the responsibility to apply for appro- priate extensions.

G.      The Commission may deny certification to any applicant who:

1.        Does not provide the information required by this Article;

2.        Does not possess adequate technical or financial capabili- ties to provide the proposed services;

3.        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 applicant is not its own Scheduling Coordinator;

4.        Fails to provide a performance bond, if required;

5.        Fails to demonstrate that its certification will serve the public interest;

6.        Seeks certification as a Load-Serving Entity and fails to submit an executed Service Acquisition Agreement with a Utility Distribution Company or a Scheduling Coordi- nator 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.

H.      A Request for approval of an executed Service Acquisition Agreement may be included with an application for a Certifi- cate of Convenience and Necessity. In all negotiations relative to Service Acquisition Agreements, Affected Utilities or their successor entities are required to negotiate in good faith.

I.        Every Electric Service Provider obtaining a Certificate of Con- venience and Necessity under this Article shall obtain certifi- cation subject to the following conditions:

1.        The Electric Service Provider shall comply with all Com- mission rules, orders, and other requirements relevant to the provision of electric service;

2.        The Electric Service Provider shall maintain accounts and records as required by the Commission;

3.        The Electric Service Provider shall file with the Director, Utilities Division, through the Compliance Section, all financial and other reports that the Commission may require and in a form and at such times as the Commis- sion may designate;

4.        The Electric Service Provider shall maintain on file with the Commission all current tariffs and any service stan- dards that the Commission shall require;

5.        The Electric Service Provider shall cooperate with any Commission investigation of customer complaints;

6.        The Electric Service Provider shall obtain all necessary permits and licenses, including relevant tax licenses;

7.        The Electric Service Provider shall comply with all dis- closure requirements pursuant to R14-2-1617;

8.        Failure to comply with any of the above conditions may result in rescission of the Electric Service Provider’s Cer- tificate of Convenience and Necessity.

J.        In appropriate circumstances, the Commission may require, as a precondition to certification, the procurement of a perfor- mance bond sufficient to cover any advances or deposits the applicant may collect from its customers, or order that such advances or deposits be held in escrow or trust.

K.      Time-frames for processing applications for Certificates of Convenience and Necessity

1.        This rule prescribes time-frames for the processing of any application for a Certificate of Convenience and Neces- sity issued by the Arizona Corporation Commission pur- suant to this Article. These time-frames shall apply to applications filed on or after the effective date of this rule.

2.        Within 120 calendar days after receipt of an application for a new Certificate of Convenience and Necessity, or to amend or change the status of any existing Certificate of Convenience and Necessity, staff shall notify the appli- cant, in writing, that the application is either administra- tively complete or deficient. If the application   is deficient, the notice shall specify all deficiencies.

3.        Staff may terminate an application if the applicant does not remedy all deficiencies within 60 calendar days of the notice of deficiency.

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4.        After receipt of a corrected application, staff shall notify the applicant within 90 calendar days if the corrected application is either administratively complete or defi- cient. The time-frame for administrative completeness review shall be suspended from the time the notice of deficiency is issued until staff determines that the appli- cation is complete.

5.        Within 180 calendar days after an application is deemed administratively complete, the Commission shall approve or reject the application.

6.        For purposes of A.R.S. § 41-1072, et seq., the Commis- sion has established the following time-frames:

a.         Administrative  completeness  review   time-frame: 120 calendar days;

b.        Substantive review time-frame: 180 calendar days;

c.         Overall time-frame: 300 calendar days.

7.        If an applicant requests, and is granted, an extension or continuance, the appropriate time-frames shall be tolled from the date of the request during the duration of the extension or continuance.

8.        During the substantive review time-frame, the Commis- sion may, upon its own motion or that of any interested party to the proceeding, request a suspension of the time- frame rules.

Historical Note

Adopted effective December 26, 1996, under an exemp- tion as determined by the Arizona Corporation Commis- sion (Supp. 96-4). Amended by an emergency action effective August 10, 1998, pursuant to A.R.S. § 41-1026, in effect for a maximum of 180 days (Supp. 98-3). Emer- gency amendment replaced by exempt permanent amend- ment effective December 31, 1998 (Supp. 98-4).

Amended effective December 31, 1998, under an exemp- tion as determined by the Arizona Corporation Commis- sion (Supp. 98-4). Amended by exempt rulemaking at 5

A.A.R. 3933, effective September 24, 1999 (Supp. 99-3). Amended by exempt rulemaking at 6 A.A.R. 4180, effec-

tive October 13, 2000 (Supp. 00-4).

Note

Editor’s Note: The Arizona Corporation Commission has determined that the following Section is exempt from the Attorney General approval provisions of the Arizona Administrative Proce- dure Act (A.R.S. § 41-1041) by a court order (State ex. rel. Corbin

v. Arizona Corporation Commission, 174 Ariz. 216 848 P.2d 301 (App. 1992)).