On Wednesday, the Arizona Corporation Commission (ACC) voted to close its docket on ‎electricity deregulation, based on concerns over the constitutionality of a deregulated electricity ‎market in Arizona. The issue had been on the table since May, when the ACC opened a docket ‎to explore the possibility of allowing consumers to choose their electricity provider in a ‎competitive market.

The all-Republican Commission presumably supports the idea of ‎deregulated markets but was constrained by Arizona’s constitution and prior court opinions on ‎the issue.‎ Specifically, Article 15, Section 3 of the state constitution requires the ACC to set electricity ‎rates: “The corporation commission shall have full power to, and shall, prescribe … just and ‎reasonable rates and charges to be made and collected, by public service corporations within the ‎State for service rendered therein … .” In a 2004 decision dealing with the ACC’s prior attempt ‎to deregulate electricity markets, the Arizona Court of Appeals held that deregulation was essentially an ‎abdication of the ACC’s constitutional responsibility to set rates. Phelps Dodge Corp. v. Arizona ‎Elec. Coop., 207 Ariz. 95 (App. 2004).‎

Supporters of deregulation, including service providers, out-of-state utilities, and certain ‎large consumers; claim it would lower prices through competition among providers. ‎Opponents claim it would create uncertain and potentially volatile electricity prices and argue that it has ‎failed to benefit consumers in states that have implemented some form of electricity deregulation.‎

The vote was not unanimous. Commissioner Brenda Burns voted against the action, preferring ‎that the ACC continue exploring options for deregulation and whether it could be done ‎constitutionally.‎

Arizona Public Service Co. (APS) issued a statement in support of the Commission’s decision.‎