1. Arizona Corporation Commission Hot Topics Presentation to NARUC Staff Subcommittee on Accounting and Finance May 7, 2009

2. Topic Areas Agency Cases / Issues Conservation Siting

3. Overview Established by Constitution  Article 15 of the Arizona Constitution 5 Statewide Elected Commissioners  Beginning 2003 8 Divisions  Administration  Hearing  Corporations  Securities  Railroad / Pipeline Safety  Legal  Information Technology  Utilities

4. Jurisdiction Investor-owned electric, gas, water and sewer utilities (Public Service Corporations) Rural Electric Cooperatives Water Associations Intrastate Natural Gas Pipelines Municipal gas utilities Telephone (Local Exchange and Resold Long Distance)

5. Utilities Division Issues Budget  In Flux Staffing / Retirements  72 Approved positions  14 Vacant positions Succession Planning  Unable to Fill

6. Electric Rate Cases  Arizona Public Service  Sulphur Springs Valley Electric Coop  Trico Electric Cooperative Issues  Renewable Energy Standards  Energy Efficiency Investigation of Regulatory & Rate Incentives  Time of Use Rates  Resource Planning  Electric Competition  ARRA Money Rulemakings  Demand Side Management  Interconnection  Net Metering – effective May 23, 2009

7. Gas Rate Cases  UNS Gas Issues  Rate Incentives  Alternative Form of Regulation Rulemakings  Demand Side Management

8. Water Rate Cases  Chaparral City Water  H2O  Johnson Utilities  Arizona Water – 20 systems  Arizona-American Water – 10 systems  Global Water – 6 systems  Litchfield Park  31 other pending Wilhoit Water Company, ICR Water Users Association, Diablo Village Water, Fisher’s Landing Water & Sewer, Tonto Village Water, Utility Systems, Christopher Creek Haven, Ehrenberg Improvement Association, Appaloosa Water, DS Water, Montezuma Rimrock Water, Pineview Water, Beaver Dam Water, Sunrise Water, Far West Water & Sewer, Orange Grove Water, Walnut Creek Water, Farmers Water, Ash Fork Development Association, Valley Utilities Water, Community Water of Green Valley, Wilhoit Water, Black Mountain Sewer, West Village Water, Q Mountain Water CC&N’s  49 – Water/Sewer Certificates (New / Extensions) pending Rulemaking  Water and Sewer CCN’s

9. Telecom Rate Cases  Qwest AFOR Issues  Triennial Review Remand Order Generic Dockets  Preferred Provider Agreements  VNXX  Arizona Universal Service Fund / Access Reform Federal Issues  Intercarrier Compensation  Net Neutrality  Telecom Mergers

10. Conservation Electric & Gas  DSM  Energy Efficiency Water  Tiered Rates  Best Management Practices Arizona Department of Water Resources

11. Power Line & Generation Plant Siting 144 – UNS Electric: Vail to Valencia 115kV - 138kV upgrade 143 – APS: Bagdad 115kV transmission line relocation project 142 – Southwest Transmission Cooperative: San Manuel interconnect project Renewables FERC Backstop Authority

12. Questions? ? ? ? ? ? ? ? ? ? ? ? ? ?

13. Contact Information Steve Olea Assistant Director – Utilities Division (602) 542-7270 SOlea@azcc.gov