The Arizona Court of Appeals has ruled that the Arizona Corporation Commission was acting within its authority when it decided to require utilities to secure a portion of their electric power from renewable resources. The Goldwater Institute had argued that the Commission’s authority was limited to setting rates and that the renewables mandate involved the Commission in decisions appropriately left to company management. Energy policy decisions such as renewable energy mandates should be made in the state legislature, Goldwater said.
In reaching the renewable power mandate the Commission suggested the decision protected consumers by diversifying the state’s energy sources away from fossil fuels, the prices of which are sometimes variable and which sometimes lead to rate increases. The Court concluded, therefore, that the Commission was considering rates when it mandated renewable power purchases.
The court “also brushed aside complaints by Goldwater”, in the words of the news article, that the Commission was meddling in decisions that should be left to management. From the court decision:
The managerial interference doctrine is a judicial construct designed to protect regulated corporations from overreaching and micro-management of their internal affairs by the Commission. It would be anomalous, to say the least, to allow APS customers to claim interference with managerial prerogative when APS itself disavows, and even embraces, the alleged “interference” by the Commission.
This part of the Goldwater complaint was always a long shot. Regulated electric companies have long learned that the state’s ability to regulate rates meant the state had the ability to regulate other terms and conditions of service, which meant that the state could regulate just about whatever it wanted. Regulated utilities generally find it advisable to work with, rather than against, their regulators.
- Goldwater Institute documents in the case, Miller v. Arizona Corporation Commission, are posted online.
- The Arizona Center for Law in the Public Interest filed an amicus brief in support of the Corporation Commission.
- Wikipedia has a page on the case.
- The Arizona Court of Appeals decision is online. Sample quote: “Because of the procedural posture of this case, we do not consider whether the [renewable energy mandate] rules represent prudent public policy or make economic sense.”