Justia Arizona Supreme Court Opinion Summaries

San Diego Gas & Electric Company (SDG&E) owns an interstate electric transmission line running from Arizona to California. The Arizona Department of Revenue (ADOR) is responsible for valuing SDG&E's property in Arizona for tax purposes. In 2020, SDG&E reported a net "original plant in service" valuation of $48,817,396 and a net "related accumulated provision for depreciation" amount of $51,446,397, resulting in a negative valuation of $2,629,001. ADOR disagreed with this calculation and determined a different accumulated depreciation amount, resulting in a positive valuation.The Arizona Tax Court granted summary judgment in favor of SDG&E, finding that their valuation correctly followed the statutory requirements. ADOR appealed, and the Arizona Court of Appeals reversed the Tax Court's decision, holding that the statute did not permit a negative valuation for a plant in service and that accumulated depreciation could not reduce the full cash value to a negative number. The Court of Appeals remanded the case for further proceedings.The Arizona Supreme Court reviewed the case and held that the calculation prescribed by the statute for determining a reduced plant in service cost does not preclude a negative valuation. The Court found that the statutory language did not limit the reduction of the original plant in service cost by accumulated depreciation to a non-negative number. Additionally, the Court clarified that a negative valuation for one component, when summed with other component valuations, reduces the overall full cash value but does not "offset" the valuation of other components. The Supreme Court vacated the relevant portions of the Court of Appeals' opinion and affirmed the Tax Court's grant of summary judgment in favor of SDG&E. View "San Diego Gas & Electric Co. v. Arizona Department of Revenue" on Justia Law

The Supreme Court held that the Town of Marana violated Ariz. Rev. Stat. 9-463.05 by assigning the entire cost of upgraded and expanded wastewater treatment facilities to future homeowners through development impact fees.\Applying the Home Builders Ass'n of Central Ariz. v. City of Scottsdale, 187 Ariz. 479 (1997), the court ruled that the development impact fees bore a presumption of validity and that section 9-463.05 was satisfied because the development fees resulted in a beneficial use to the development. The court of appeals affirmed. The Supreme Court vacated the judgment of the court of appeals and reversed the trial court, holding (1) in applying section 9-463.05 as amended, the court of appeals erroneously applied from City of Scottsdale a presumption of validity to the Town's assessment of development fees; and (2) the Town violated section 9-463.05 by making future development bear 100 percent of the cost of acquiring the wastewater treatment facility and bearing nearly all of the cost of upgrading, modernizing, and improving the facility. View "Southern Ariz. Home Builders Ass'n v. Town of Marana" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals upholding the decision of the Arizona Corporation Commission to consolidate several communities into a single service district, gradually increasing rates for some and lowering them for others to achieve uniform rates, holding that there was no error.The Commission consolidated the monthly wastewater rates paid by five wastewater districts acquired by EPCOR Water Arizona Inc. in 2012. Sun City, one of the wastewater districts, appealed, arguing that the consolidated rate discriminated against residents of Sun City. The court of appeals upheld the Commission's decision. The Supreme Court affirmed, holding that the rates approved by the Commission for the fully consolidated EPCOR district did not violate Ariz. Const. art. XV, 12. View "Sun City Home Owners Ass'n v. Arizona Corp. Commission" on Justia Law

The Supreme Court held that the Arizona Corporation Commission may appoint an interim manager to operate a public service corporation (PSC) based on its permissive authority under Ariz. Const. art. XV, 3.Under article 15, section 3, the Commission has permissive authority to make and enforce reasonable orders for the convenience, comfort, safety, and health of the public. Concluding that it was necessary to protect public health and safety, the Commission appointed EPCOR Water Arizona as an interim manager for Johnson Utilities, LLC, an Arizona PSC. Johnson filed a special action seeking to enjoin its enforcement, but the court of appeals denied relief, holding that the Commission has both constitutional and statutory authority to appoint an interim manager of a PSC. The Supreme Court vacated the court of appeals' opinion, holding that the Commission may appoint an interim manager based on its permissive authority under article 15, section 3 of the Arizona Constitution. View "Johnson Utilities, LLC v. Arizona Corp. Commission" on Justia Law

Arizona Water Company (AWC), a utility company, sought a rate increase and proposed a step-increase mechanism that would allow the Arizona Corporation Commission to adjust rates between full rate cases. The rate increase mechanism, called the system improvements benefit (SIB), would allow AWC to petition for a rate increase between rate cases to help AWC recoup the cost of newly-completed infrastructure projects. The Commission approved the SIB mechanism with some modifications. The court of appeals vacated the Commission’s approval of the SIB mechanism, concluding that the SIB mechanism did not comply with the state Constitution’s mandate that “the Commission determine a public service corporation’s fair value when setting rates[.]” The Supreme Court vacated the court of appeals’ opinion and affirmed the Commission’s orders approving the SIB mechanism, holding that the SIB mechanism complied with the Constitution’s mandate that the Commission determine the fair value of a utility’s property when setting rates. View "Residential Util. Consumer Office v. Arizona Corp. Comm’n" on Justia Law