Open Meeting - June 10, 2026 - Jun 10, 2026

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Arizona Corporation Commission 59 min 8 agenda items transcribed 3 days ago official recording ↗

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What announcements and opening remarks were made at the start of the meeting?

Unknown 0:00

Well, welcome everybody to our June 10th open meeting. I'm going to take another real quick point of personal privilege here. Today is the last meeting that, and I don't know if I see her in the room, but our H.R. Director of Administration, yes. Kim is retiring on June 19th. And so I just wanted to, I guess, wish her well and thank her for the 21 years of service that she's provided the commission. She's retiring from the state, but I guess she's going to take the summer off before she moves on to whatever next adventure is. So we wish her well and thank you.

Unknown 0:52

All right. So to start, I guess, would you please rise for an invocation from Vice Chair Walden and a pledge from Commissioner Thompson.

Vice Chair Walden 1:05

Heavenly Father, we're grateful for this opportunity to meet today for this wonderful country and state that we live in and thank thee for the freedoms that we have here. We pray that we will have thy spirit with us and have discernment and wisdom in our meeting today. In the name of Jesus Christ, amen.

Unknown 1:24

Please join me in our pledge.

Unknown 1:41

All right, thank you. First item of business, we do have one item on consent. It's item number 10 that is subject to ARS 4252. So if there are any parties to that item that wish to speak, now's a good time to speak up on that. Not seeing any. I'll go ahead and ask Vice Chair Walden. Actually, do any commissioners want to pull any items from the consent? Everybody good? Okay. So at this point, let's ask Vice Chair Walden to go ahead and move that. And I believe there's an amendment on that one? No, I was mistaken.

Vice Chair Walden 2:21

Yeah, it's on the regular agenda.

Unknown 2:23

Yeah, okay. That's what I thought. Okay, so let's go ahead and move a consent, please.

Vice Chair Walden 2:26

Yes, I move consent agenda for a

Unknown 2:29

vote. Okay, please cast.

Unknown 2:37

And by a vote of five ayes, zero nays, the consent passes. And, go ahead.

Vice Chair Walden 2:46

Item number 15, for discussion.

Unknown 2:51

Okay, we will start with staff.

Bob Gray 2:55

Chairman, commissioners, Bob Gray with staff. Item number 15 is Southwest Gas application to set the annual system integrity mechanism surcharge rate. Staff has reviewed the application and recommends approval of the proposed .0067 application. Dollars per therm SIM surcharge rate with an effective date of April 1st, 2026 to remain in effect until otherwise ordered by the commission or the next upcoming SIM surcharge rate filing. I'm available for questions.

Unknown 3:25

Thank you. Ruko, do we have Ruko? Cynthia, there we go. Good morning, Cynthia.

Cynthia 3:37

Good morning, Mr. Chair, Vice Chair Walden, and members of the commission. I'm just here in support of the the company's request and the staff's recommendation. Okay.

Unknown 3:46

Thank you. Thank you. The company, Southwest Gas.

Matt Deer 3:51

Morning, Chair Myers, Commissioners, Matt Deer with Southwest Gas. Appreciate staff's review and also the supportive comments from Ruko and the stocket. I'm happy to answer questions or provide an overview of kind of what happened in 2025 with the SEM, if that would be helpful to the commissioners. I'm seeing some heads nodding, so good. So just to recap, the purpose of the SEM is to mitigate the regulatory lag on pipeline safety investments that are non-revenue producing in nature. So the surcharge is capped at a revenue requirement to recover the capital expenditures of $50 million. And as we showed in the application, we did about $87 million worth of capital expenditures supporting the SIM in 2025.

Matt Deer 4:35

The SIM surcharge rate recovers that, mitigates that regulatory lag on the $50 million for those projects that were completed. So you may notice the difference in the projects that we proposed versus the projects that were completed. We had shown an estimate of about $165 million worth of SIM projects, and we completed about $87 million. The real reason we're... A lot of the projects, and you can appreciate the nature of our business of working with 70 municipalities across the state. So some projects weren't completed in time due to permitting. Some were deferred for later recovery for future years or other just planning considerations. And that's why the completed project table of $87 million is different than what we had proposed in the original project plan that was approved last November.