Woodward v. Acc

CourtCourt of Appeals of Arizona
DecidedDecember 11, 2018
Docket1 CA-CC 17-0003
StatusUnpublished

This text of Woodward v. Acc (Woodward v. Acc) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Woodward v. Acc, (Ark. Ct. App. 2018).

Opinion

NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE ARIZONA COURT OF APPEALS DIVISION ONE

WARREN WOODWARD, Appellant,

v.

ARIZONA CORPORATION COMMISSION, Appellee,

ARIZONA PUBLIC SERVICE COMPANY, Intervenor.

Nos. 1 CA-CC 17-0003 1 CA-CC 17-0004 (Consolidated) FILED 12-11-2018

Arizona Corporation Commission Nos. E-01345A-16-0036 E-01345A-16-0123

AFFIRMED

APPEARANCES

Warren Woodward, Sedona Appellant

Arizona Corporation Commission, Legal Division, Phoenix By Maureen A. Scott, Wesley C. Van Cleve, Naomi E. Davis, Stephen J. Emedi Counsel for Appellee, Arizona Corporation Commission

Pinnacle West Capital Corporation Law Department, Phoenix By Thomas A. Loquvam, Thomas L. Mumaw, Melissa M. Krueger Counsel for Intervenor, Arizona Public Service Company WOODWARD v. ACC Decision of the Court

MEMORANDUM DECISION

Judge Michael J. Brown delivered the decision of the Court, in which Presiding Judge James P. Beene and Judge James B. Morse Jr. joined.

B R O W N, Judge:

¶1 This is a consolidated appeal of two Arizona Corporation Commission decisions that together enact a settlement agreement concerning Arizona Public Service Company’s (“APS”) 2016 rate case. Appellant Warren Woodward, an intervenor in the rate case, challenges Decision No. 76295’s resolution enacting section 19.1 of the agreement (“choice of rate/90-day trial”) and Decision No. 76374, which enacts section 30 of the agreement (“AMI1 Opt-Out Program”). Because Woodward has not demonstrated that the Commission’s decisions were unlawful, unreasonable, or unsupported by substantial evidence, we affirm.

BACKGROUND

¶2 APS is a public service corporation within the meaning of Article 15, Section 2, of the Arizona Constitution and is the largest provider of electricity in Arizona. As a public service corporation, APS is regulated by the Commission, which determines the rates APS can implement through a proceeding called a rate case. See Ariz. Admin. Code (“A.A.C.”) R14-2-103. These proceedings are complex and often take more than a year to complete because they “attract many intervenors, require voluminous and detailed filings, and involve multiple, lengthy hearings.” Residential Util. Consumer Office v. Ariz. Corp. Comm’n, 240 Ariz. 108, 110, ¶ 6 (2016).

¶3 Woodward is one of many intervenors to the 2016 rate case, which included various issues that were heavily litigated for over a year until 29 of 39 parties signed the settlement agreement at issue in this case.

1 AMI stands for Automated Meter Infrastructure and refers to the use of “smart meters,” which are utility meters that have “have a two-way communication function between the utility company and the customer.” Office of Envtl. Health, Ariz. Dep’t of Health Servs., Public Health Evaluation of Radio Frequency Exposure from Electronic Meters 1 (2014).

2 WOODWARD v. ACC Decision of the Court

Woodward was involved in the settlement agreement negotiations but opposed its final terms.

¶4 Whether the settlement agreement resulted in rates that were just, reasonable, and in the public interest was the subject of a seven-day evidentiary hearing before an administrative law judge (“ALJ”) of the Commission’s Hearing Division. Pre-filed testimony was admitted as evidence, and all 39 parties were permitted to submit direct and rebuttal testimony related to the settlement agreement and closing briefs at the hearing’s conclusion. After the hearing, the ALJ reviewed the evidence and issued a recommended opinion and order (“ROO”) that addressed all the disputed issues except the AMI Opt-Out Program, which was bifurcated for a separate decision.

¶5 At an open meeting, the Commission discussed the ROO and heard additional testimony before approving it, with several amendments, by a four to one vote. Decision No. 76295 was issued shortly thereafter, substantively adopting the ROO and concluding, in relevant part, that “the rates, terms and conditions of the Settlement Agreement are just, fair, and reasonable and in the public interest.” Woodward filed an application for rehearing, which was denied by operation of law. See Ariz. Rev. Stat. (“A.R.S.”) § 40–253(A) (“If the commission does not grant the application [for rehearing] within twenty days, it is deemed denied.”). Woodward timely appealed the decision pursuant to A.R.S. § 40–254.01.

¶6 At a subsequent open meeting, the Commission discussed the ROO for the AMI Opt-Out Program and heard additional testimony before approving it with no amendments, by a vote of four to one. The Commission then issued Decision No. 76374, adopting the AMI Opt-Out Program and determining that the settlement agreement was just, reasonable, and in the public interest. Woodward filed an application for rehearing, which was denied by operation of law, and timely appealed the decision under § 40–254.01. We granted the Commission’s motion to consolidate the two appeals and APS’s motion to intervene.

DISCUSSION

¶7 The Commission “is a constitutional body . . . ow[ing] its existence to provisions in the [state’s] organic law.” Ethington v. Wright, 66 Ariz. 382, 389 (1948); see also Ariz. Const. art. 15, §§ 1–19. The Arizona Constitution grants the Commission “full power to . . . prescribe just and reasonable classifications to be used and just and reasonable rates and charges to be made and collected, by public service corporations within the

3 WOODWARD v. ACC Decision of the Court

state for service rendered therein.” Ariz. Const. art. 15, § 3. When exercising its constitutionally granted powers, the Commission has broad discretion. See Residential Util. Consumer Office, 240 Ariz. at 111, ¶¶ 11–12 (citations omitted).

¶8 We review the constitutional and statutory challenges in this case de novo. Id. at ¶ 10. When reviewing a rate-making decision we “presume the Commission’s actions are constitutional, and we uphold them unless they are arbitrary or an abuse of discretion.” Id. For factual findings, we defer to the Commission unless presented with “a clear and satisfactory showing that [an] order is unlawful or unreasonable.”2 A.R.S. § 40-254.01(A), (E). This standard requires the party opposing a decision to “demonstrate, clearly and convincingly, that the Commission’s decision is arbitrary, unlawful or unsupported by substantial evidence.” Freeport Minerals Corp. v. Ariz. Corp. Comm’n, 244 Ariz. 409, 411, ¶ 6 (App. 2018) (citation omitted). We review only those issues that were fairly presented to the Commission in a timely application for rehearing. See A.R.S. § 40-253.3

2 We disagree with the Commission’s assertion that Woodward has the burden of “show[ing] by clear and convincing evidence” that the findings of fact are unlawful, unreasonable or unsupported by substantial evidence. Although “clear and satisfactory” has been interpreted as equivalent to “clear and convincing,” Consol. Water Utils., Ltd. v. Ariz. Corp Comm’n, 178 Ariz. 478, 481 (App. 1993), under § 40-254.01(A) Woodward must make a clear and convincing showing. To meet this standard, he must provide (1) analysis of pertinent legal authorities sufficient to show the Commission’s decisions are unlawful or unreasonable or (2) discussion of the evidence, with supporting record citations, sufficient to demonstrate the Commission’s decisions are not supported by substantial evidence.

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