Hopi Tribe v. Acc ( 2023 )


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  •                                 IN THE
    ARIZONA COURT OF APPEALS
    DIVISION ONE
    HOPI TRIBE, Appellant,
    v.
    ARIZONA CORPORATION COMMISSION, Appellee.
    ______________________________
    ARIZONA PUBLIC SERVICE COMPANY, RESIDENTIAL UTILITY
    CONSUMER OFFICE, Intervenors.
    No. 1 CA-CC 22-0001
    FILED 12-28-2023
    Appeal from the Arizona Corporation Commission
    No. E-01345A-19-0236
    DISMISSED
    COUNSEL
    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
    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
    OPINION
    Judge Jennifer M. Perkins delivered the opinion of the Court, in which Vice
    Chief Judge Randall M. Howe and Judge Daniel J. Kiley joined.
    P E R K I N S, 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.
    2
    HOPI TRIBE v. ACC
    Opinion of the Court
    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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    HOPI TRIBE v. ACC
    Opinion of the Court
    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 grant the application within twenty days, it is deemed
    denied.”). The Tribe then filed this appeal, but agreed to stay the appeal
    while the Commission considered transition assistance issues in the generic
    docket. APS and Tucson Power filed new rate cases in 2022 in which each
    proposed additional transition assistance for the Tribe.
    ¶10           The Commission has since closed the generic docket without
    deciding whether to award the Tribe additional transition assistance.
    Instead, the Commission left the issue to be “addressed in the pending
    [APS] and [Tucson Power] [2022] rate cases.” The Tribe moved to intervene
    in both 2022 rate cases. We take judicial notice of the procedural orders
    granting the Tribe’s motions to intervene in both rate cases, and the decision
    in Tucson Power’s rate case because they are public records. See Ariz. R.
    Evid. 201; In re Application of Ariz. Pub. Serv. Co., Docket No. E-01345A-22-
    0144, E000026408 at 3 (Ariz. C.C. May 4, 2023); In re Application of Tucson
    Elec. Power Co., Docket No. E-01933A-22-0107, E000023655 at 8 (Ariz. C.C.
    Jan. 20, 2023); In re Application of Tucson Elec. Power Co., Docket No. E-
    01933A-22-0107, Decision 79065 at 128 (Ariz. C.C. Aug. 25, 2023).
    ¶11           In August 2023, the Commission resolved Tucson Power’s
    transition assistance obligation to the Tribe without awarding the Tribe
    additional transition assistance. The Commission found that “while
    [Tucson Power] may use shareholder funds for [transition assistance],
    4
    HOPI TRIBE v. ACC
    Opinion of the Court
    ratepayer funding of [transition assistance] is not justified.” In re Application
    of Tucson Elec. Power Co., Docket No. E-01933A-22-0107, Decision 79065 at
    128 (Ariz. C.C. Aug. 25, 2023). The 2022 APS rate case is pending before the
    Commission, and the parties expect the case to be resolved as soon as
    January 2024.
    DISCUSSION
    ¶12            The Tribe challenges the transition assistance the Commission
    ordered in the Decision and argues the Commission erred by denying the
    Tribe’s rehearing request. The Commission and APS contend we lack
    jurisdiction to consider the Tribe’s appeal because the case is not ripe. The
    Tribe argues we have jurisdiction because the Decision is final.
    ¶13            Both the Commission and APS argue there “is not [a] final
    determination by the Commission regarding [transition assistance]”
    because the Commission may order additional transition assistance
    through the generic docket. In the Decision, the Commission explicitly left
    open this possibility, stating that the approved assistance “shall not be
    interpreted as establishing the entirety of APS’s [transition] assistance
    obligation to . . . the Tribe.” And the Commission specified the generic
    docket as the “appropriate venue to flesh out additional information
    concerning APS’s and other utilities’ equitable obligations to coal-impacted
    communities.” Although the Commission closed the generic docket
    without deciding whether to award additional transition assistance, APS
    and the Commission contend that the Commission is likely to determine
    the Tribe’s full transition assistance entitlement at the conclusion of the 2022
    APS rate case.
    ¶14            We will not “review Commission actions where the
    Commission has not made a final determination.” Kunkle Transfer & Storage
    Co. v. Superior Court, 
    22 Ariz. App. 315
    , 318 (1974) (accepting special action
    jurisdiction to resolve the court’s jurisdiction over ongoing Commission
    matters). We will not “render[] a judgment or opinion on a situation that
    may never occur.” U.S. W. Commc’ns, Inc. v. Ariz. Corp. Comm’n, 
    198 Ariz. 208
    , 214, ¶ 15 (App. 2000), vacated on other grounds, 
    201 Ariz. 242
     (2001). And
    “[i]f a party has not exhausted its administrative remedies, the controversy
    is not ripe for review.” U.S. W. Commc’ns, Inc. v. Ariz. Corp. Comm’n, 
    197 Ariz. 16
    , 19, ¶ 9 (App. 1999).
    ¶15            The Commission and APS argue that because the
    Commission left the issue of transition assistance open for consideration,
    there is no final order or decision on that issue from which the Tribe could
    5
    HOPI TRIBE v. ACC
    Opinion of the Court
    apply for rehearing. And an application for rehearing from a final decision
    is an administrative remedy which must be exhausted as a prerequisite for
    judicial review. See A.R.S. § 40-253(A), (B); State ex rel. Church v. Ariz. Corp.
    Comm’n, 
    94 Ariz. 107
    , 110 (1963); Woodward v. Ariz. Corp. Comm’n, 1 CA-CC
    17-0003, 
    2018 WL 6498615
    , at *2, ¶ 8 (Ariz. App. Dec. 11, 2018) (mem.
    decision) (“We review only those issues that were fairly presented to the
    Commission in a timely application for rehearing.”). A “final order or
    decision” plainly implies a ruling that disposes of the issues leaving the
    litigant no remaining avenue of relief. See A.R.S. § 40-253(A).
    ¶16           We agree with the Commission that “there is no doubt that
    [the Decision] is a final, appealable order.” And we agree that, despite the
    otherwise final nature of the Decision, the Commission explicitly left open
    the question of how much transition assistance APS must provide the Tribe.
    Our evaluation of the Commission’s award must be tethered to the
    complete award.
    ¶17           The Tribe argues that each Commission decision relating to
    transition assistance should be evaluated on its own merits. The Tribe
    acknowledges the 2022 APS rate case may result in additional transition
    assistance, but still maintains that future Commission decisions have no
    bearing on whether the award in the Decision is arbitrary and capricious,
    discriminatory, or a deviation from an established policy. The Tribe has
    intervened in APS’s 2022 rate case in which APS has proposed additional
    transition assistance, which amounts to recognition that it has not yet
    exhausted administrative remedies related to the transition assistance
    award. See Church, 
    94 Ariz. at 110
    . We cannot evaluate the merits of the
    Tribe’s arguments until the Commission finally resolves the transition
    assistance issue and the Tribe presents its challenges to the final decision in
    a timely application for rehearing. See A.R.S. § 40-253(A), (B); Woodward, 1
    CA-CC 17-0003, at *2, ¶ 8. In the absence of such final resolution, the
    transition assistance issue is not ripe. See U.S. W. Commc’ns, Inc., 197 Ariz.
    at 19, ¶ 9.
    ¶18           Upon final resolution of the Tribe’s transition assistance
    entitlement, the Tribe can challenge the entire award, including the amount
    ordered in the Decision. Indeed, both the Commission and APS agreed to
    this during oral argument before this Court.
    ¶19           The Tribe expressed concern that if this Court concludes it
    does not have jurisdiction in this appeal, the Commission could leave the
    transition assistance issue open in perpetuity, evading judicial review. But
    as APS responded, the Tribe could appeal from a future Commission
    6
    HOPI TRIBE v. ACC
    Opinion of the Court
    decision to continue leaving transition assistance claims unresolved on the
    basis that the decision to leave the issue open was arbitrary and capricious.
    See A.R.S. § 40-253(A), (B). The Tribe did not raise that argument in this
    appeal, so we do not address the issue here, nor do we address the merits
    of such an argument in a future appeal.
    ¶20           In its Decision, the Commission designated the generic docket
    as the appropriate venue to gather evidence and make a full determination
    on the Tribe’s transition assistance award. With that docket since closed,
    the Commission is now weighing that evidence in APS’s 2022 rate case to
    decide whether the Tribe should receive additional transition assistance.
    The order of transition assistance in the Decision from which the Tribe
    appeals is not a “final determination” by the Commission. See Kunkle, 22
    Ariz. App. at 318. We do not have jurisdiction over the Tribe’s appeal.
    CONCLUSION
    ¶21          Because this Court does not have jurisdiction, we dismiss the
    Tribe’s appeal.
    AMY M. WOOD • Clerk of the Court
    FILED: TM
    7
    

Document Info

Docket Number: 1 CA-JV 22-0001

Filed Date: 12/28/2023

Precedential Status: Precedential

Modified Date: 12/28/2023