Tribe v. Ariz. Corp. Comm'n

• Docket Number: 1 CA-CC 22-0001
• Decision Date: 28 December 2023
• Parties: HOPI TRIBE, Appellant, v. ARIZONA CORPORATION COMMISSION, Appellee. ARIZONA PUBLIC SERVICE COMPANY, RESIDENTIAL UTILITY CONSUMER OFFICE, Intervenors.
• Court: Arizona Court of Appeals

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HOPI TRIBE, Appellant,
v.
ARIZONA CORPORATION COMMISSION, Appellee.

ARIZONA PUBLIC SERVICE COMPANY, RESIDENTIAL UTILITY CONSUMER OFFICE, Intervenors.

No. 1 CA-CC 22-0001

Court of Appeals of Arizona, First Division

December 28, 2023

Appeal from the Arizona Corporation Commission No. E-01345A-19-0236

Hopi Tribe Office of General Counsel, Kykotsmovi By Frederick K. Lomayesva Counsel for Appellant

Arizona Corporation Commission, Phoenix By Robin R. Mitchell, Maureen A. Scott, Wesley C. Van Cleve, Kathryn M. Ust Counsel for Appellee

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Gibson, Dunn, &Crutcher LLP, Washington, DC By Thomas G. Hungar, Matthew S. Rozen Co-Counsel for Intervenor APS

Snell &Wilmer LLP, Phoenix By Amanda Z. Weaver Co-Counsel for Intervenor APS

Radix Law PLC, Scottsdale By Andrew M. Kvesic Co-Counsel for Intervenor RUCO

Residential Utility Consumer Office, Phoenix By Daniel W. Pozefsky Co-Counsel for Intervenor RUCO

Judge Jennifer M. Perkins delivered the opinion of the Court, in which Vice Chief Judge Randall M. Howe and Judge Daniel J. Kiley joined.

OPINION

PERKINS, JUDGE

¶1 The Hopi Tribe ("Tribe") appeals from the Arizona Corporation Commission's ("Commission") Decision 78317 ("Decision") ordering Arizona Public Service Company ("APS") to pay the Tribe $1 million directly and fund electrification projects within the Hopi reservation in an amount "up to $1.25 million" as part of APS's Coal Community Transition assistance ("transition assistance"). The Tribe challenges the amount of transition assistance ordered, arguing that the Commission did not support its Decision with substantial evidence, deviated from an established policy, unlawfully discriminated against the Tribe, and wrongfully denied an application for rehearing. We do not have jurisdiction to consider any of the challenges to the transition assistance because that portion of the Decision was not final. We therefore dismiss the Tribe's appeal.

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FACTS AND PROCEDURAL BACKGROUND

¶2 APS is a public service corporation that jointly owns the three coal-fired power plants at issue. The Navajo Generating Station ("Navajo Station") is located outside of Page, Arizona, on land leased from the Navajo Nation ("Nation"). The Navajo Station began operating in 1974, and was the largest coal-fired power plant in the western United States. It is jointly owned by several entities, including APS and Tucson Electric Power ("Tucson Power"). The Navajo Station received much of its coal from Peabody Energy's Kayenta Coal Mine ("Kayenta Mine"). Kayenta Mine is located on Nation land, but some of the coal is derived from a "joint use area" shared with the Tribe.

¶3 Four Corners Power Plant ("Four Corners") is a coal-fired power plant located in northwestern New Mexico on land leased from the Nation. It began operating in 1963, and was jointly owned by multiple entities including APS and Tucson Power before 2012. See Ariz. Pub. Serv. Co. v. Ariz. Corp. Comm'n, 255 Ariz. 16, 18, ¶ 3 (App. 2023).

¶4 Cholla Power Plant ("Cholla") is located just south of the Nation's reservation in north-central Arizona. It began operating in 1962 and is jointly owned, but APS is Cholla's majority owner and operator.

¶5 On April 1, 2019, Tucson Power filed a rate application. See In re Application of Tucson Elec. Power, Docket No. E-01933A-19-0028, Decision 77856 at 11 (Ariz. C.C. Dec. 31, 2020). During that case, questions arose about what to do to assist communities impacted by the transition away from coal-based energy production. Id. at 171. In response, the Commission ordered Commission staff "to open a generic docket involving all Arizona electric utilities to address the impact of the closure of fossil-based electric generation on the Tribal communities." Id.

¶6 On October 1, 2019, APS filed a Notice of Intent to File a Rate Case. Navajo Station closed the next month. The Nation and the Tribe then moved to intervene in the 2019 APS case. The Administrative Law Judge granted both motions. As in the 2019 Tucson Power case, both parties introduced arguments about the effect of the decision to move away from coal-fired generation.

¶7 During its 2019 rate case, APS requested approval of its 2020 Demand Side Management Plan. In re Application of Ariz. Pub. Serv. Co., Docket No. E-01345A-19-0088, Decision 77763 at 1 (Ariz. C.C. Oct. 2, 2020). In response, the Commission ordered APS to develop a "proposal and budget to implement energy efficiency projects" with communities

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impacted by the closure of coal-fired power plants that APS owns or operates. Id. at 39. After this order, APS and the Nation entered a memorandum of understanding ("MOU") that included proposed cash and technical transition assistance. The Tribe was not a party to the MOU.

¶8 After the January 2021 hearing on APS's 2019 rate case concluded, APS announced a "Clean Energy Commitment" to end all coal-fired generation by 2031. In re Application of Ariz. Pub. Serv. Co., Docket No. E-01345A-19-0236, Decision 78317 at 104 (Ariz. C.C. Nov. 9, 2021). Based on this announcement, Four Corners is scheduled to close in 2031, and Cholla's closure was sped up to April 2025.

¶9 After APS's announcement, the Commission considered the ALJ's recommendation regarding funding within the Hopi reservation and issued the Decision. The Commission determined that it could decide some issues related to transition assistance and it need not await the conclusion of the generic docket. The Commission ordered APS to pay the Tribe $1 million and to "spend up to $1.25 million toward electrification projects" on the Tribe's land. The Tribe petitioned for rehearing, which the Commission denied by operation of law. See A.R.S. § 40-253(A) ("If the commission does not...