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Tue, March 26

ACC reinstates UniSource free power line policy along party lines

KINGMAN - By a narrow party-line vote, the Arizona Corporation Commission on Tuesday approved the reinstatement of a 400-foot free power line extension policy for UniSource Energy Services customers.

The policy, which had been repealed by the commission in 2008, provides up to 400 feet of free power lines to any residential or commercial property owner seeking to provide power to their land in areas where there are no existing lines.

The cost of the extensions would be paid for out of current UniSource ratepayers' bills.

At the time the policy had been repealed, then-commission chairwoman Kristen Mayes had argued that the state's then-explosive growth had to pay for itself, and that it was not fair for ratepayers to foot the bill for new development and rural sprawl.

But the ACC's new chairman, Gary Pierce, said on Tuesday that he felt commissioners were voting to correct a mistake that has had a devastating effect on the land values and development of rural Arizona counties since the collapse of the housing bubble and the onset of the global recession.

"Today I believe we're correcting something that I'm pleased to correct," Pierce said.

"We understand, at least I do, the impact that's occurred (in rural Arizona)."

Fellow commissioner Bob Stump, who had originally proposed the reinstatement of UniSource's policy at a rate hearing last September, agreed that the move would ultimately help consumers, easing the concerns of many who had written to the commission asking them to revisit the policy.

"I've learned we're in a constant balancing act," Stump said. "I do believe the action we're taking today is good for consumers."

Commissioner Paul Newman led the opposition to the policy's reinstatement, arguing that to do so could cost ratepayers millions in order to enrich a handful of Realtors and speculators. He grilled Arizona Association of Realtors representative Meghaen Duger, asking her if the policy wouldn't specifically serve to benefit her profession at a cost to average ratepayers.

Duger said that while she as a Realtor would be satisfied with the policy's restoration, she argued that she and nearly everyone else who signed on with UniSource prior to 2008 has benefited directly or indirectly from the policy. She noted that, even now, ratepayers are still paying for line extensions from previous years, so the reinstatement of the policy shouldn't cause any substantial shift in customers' rates.

Representing UniSource, Phil Dion told Newman that both free line extensions and "growth-pays-for-growth" could be reasonable policies, but that it was up to the commission to examine each utility provider's individual situation and figure out how best to balance their competing interests. He added that, based on his own "back of the envelope" calculations, reinstatement of the line extension policy would only cost ratepayers about 16 cents a month, or just under $2 a year, based on $1 million worth of line extensions in a single year.

At Newman's request, Dion did agree to provide semi-annual reports to the commission showing the amount of money UniSource has spent on line extensions, as well as a running estimate of how much those costs would affect customers' individual bills. Newman appreciated the compromise, though he had originally hoped for monthly updates - something Dion said would have been prohibitive and less accurate than the semi-annual reports.

Ultimately, however, Newman still voted against the policy's reinstatement, arguing that it could set a poor precedent for the real estate industry and that it wouldn't be long before other utilities come before the commission to request the same thing. He added that the policy also failed to address a fundamental distribution of wealth issue whereby ratepayers - lower income renters in particular - would be effectively subsidizing wealthy people looking to build their second homes.

The final vote on reinstatement of the policy was 3-2, with Republicans Pierce, Stump and Brenda Burns voting in favor and Democrats Newman and Sandra Kennedy voting against.


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