Thursday, May 21, 2009

Arizona Corporation Commission Goal Conflicts

The Arizona Corporation Commission regulates investor owned utilities here in Arizona. There are five commissioners elected by the public in a statewide election. One of the goals of the commission is to keep rates as low as possible for consumers. However, some of the commissioners seem to have other goals as well.

Salt River Project officials said they could outsource 40 to 50 information-technology workers' jobs after already offering severance packages to nearly 100 employees this year.

Utility officials said they are considering the move to cut costs amid sluggish customer growth and that they have to pursue any reasonable option to keep utility rates low.

Regulators who oversee other utilities in the state are concerned with the outsourcing, particularly because SRP is a political subdivision of the state.

They said that outsourcing jobs to other states or countries would not likely be allowed at other utility companies.


Commission Chairwoman Kris Mayes said that because SRP doesn't have to report to her commission like other state utilities, the company faces less scrutiny over such decisions.

She would be concerned if one of the utilities under her oversight outsourced, "particularly in this down economy," she said.

The commission can influence utilities' hiring through rate cases.

For example, when the commission approved an emergency rate increase for APS in December, commissioners directed the utility to cut at least $20 million in expenses and do it without layoffs.

So, do we keep rates low, reduce costs, or meet other social goals.



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