Mayes appeals after panel OKs energy deal with data center

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(The Center Square) - Attorney General Kris Mayes appealed the Arizona Corporation Commission's ruling that allowed Tucson Electric Power and Beale Infrastructure to enter into an energy supply agreement.

In her appeal Thursday at Maricopa County Superior Court, Mayes said the ACC did not follow Arizona law when it approved an agreement to provide 286 megawatts of electricity to the Pima County data center.

"The ACC cannot give away the constitutional authority Arizonans entrusted to it,” Mayes said.

She added that the ACC “does not have the power to let a utility and a data center operator quietly agree to set their own rates, cut the public out of the process, and call it a day.”

“If we allow that here, we are telling every large energy customer in Arizona that they can negotiate sweetheart rates outside of public oversight — and ordinary Arizonans will be left to pick up the tab," Mayes explained.

The attorney general claimed that, in this instance, the ACC did not follow its constitutional authority to determine rates by allowing private parties to adjust rate schedules without oversight.

Richie Taylor, the communications director for Mayes, told The Center Square by email that “the only way we can ensure that ratepayers are being treated fairly is through the transparent oversight framework intended by our state’s founders.”

In addition, Mayes said, the ACC “abdicated its constitutional and statutory duty to ensure that a public service corporation’s rates are just and reasonable.”

The ACC can’t approve future rate changes unless it determines the future rates will follow the state constitution’s “just and reasonable” principle, the attorney general said.

According to Mayes, the ACC can approve special contracts between a public service corporation and a customer, but for these agreements to allow these entities to “change the rate schedule for electric service without further Commission approval is an unreasonable practice.”

The legal filing stated when these entities are allowed to change rates without proper ACC approval, it prevents the established ratemaking process, public notice, interested party intervention, evidentiary hearings and cross-examination.

Taylor told The Center Square it was important for ACC to follow the public process “because that is what is required under the state constitution which was designed to protect Arizonans from monopolistic power.”

He said the “ACC’s constitutional role is to protect ratepayers and ensure that the state’s regulated monopoly utilities can attract capital needed to maintain grid reliability and provide reliable service to Arizonans.”

“Allowing large energy users to cut deals behind closed doors with a monopoly utility without public transparency is no way to go about achieving those goals,” Taylor explained.

In this case, Mayes requested a judge overrule the agreement between Tucson Electric Power and Beale Infrastructure.