Hopi Tribe v. Acc

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.

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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 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],

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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

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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

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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

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