Goldwater Institute Appeals Lawsuit Against Arizona Corporation Commission

Phoenix–Late yesterday the Goldwater Institute continued its legal challenge of the Arizona Corporation Commission’s authority to impose renewable energy mandates on utility companies and surcharges on consumers to pay for those mandates.

In 2006, the Arizona Corporation Commission passed a rule requiring electricity companies to produce an increasing amount of the power they supply to consumers from renewable energy sources, like solar and wind power. As part of the mandate, the ACC required electricity companies to impose a surcharge on each of their customers. This tax is expected to cost Arizona families and businesses $1.2 billion plus the cost of infrastructure over the next 15 years.

“These regulations may be the largest intrusion into private business in Arizona’s history, and consumers are picking up the tab,” said Clint Bolick, director of the Scharf-Norton Center for Constitutional Litigation at the Goldwater Institute.

The Goldwater Institute filed suit against the ACC because under the Arizona Constitution the Commission’s authority is limited to protecting consumers from excessive energy prices. It does not have the authority to set energy policy, which is the legislature’s role, and it doesn’t have the authority to require utilities to charge more.

The Institute also has weighed in on a related issue involving the Commission. Solar panel manufacturing companies like Solar City are working with school districts to finance solar panels that will provide power to the schools. But the ACC is considering regulating solar panel manufacturers as utility companies, which would increase their costs and add mountains of compliance red tape.

But solar firms do not meet any of the normal conditions that would allow the ACC to regulate them as utilities: solar firms do not produce energy–they are simply facilitators that enable private entities to generate their own energy; the firms are not a “natural monopoly”; and they are not required to provide service–customers choose whether or not they want to buy their service, unlike a traditional electricity company.

“The ACC is trying to impose a 20th Century regulatory structure on 21st Century technology,” continued Bolick. “Instead of command-and-control regulation, government needs to let technology flourish in a free economy. There are plenty of entrepreneurs who would relish the chance to supply green energy to customers who want to buy it.”

This appeal of a September 2009 Maricopa County Superior Court decision to the Arizona Court of Appeals is the latest round in Miller v. Arizona Corporation Commission, initially filed by the Goldwater Institute Scharf-Norton Center for Constitutional Litigation in June 2008.

For more information on this and other Goldwater Institute litigation, visit 34.206.30.86/litigation. The Goldwater Institute is an independent government watchdog supported by people who are committed to expanding free enterprise and liberty.