ARIZONA CORPORATION COMMISSION

FIVE YEAR STRATEGIC PLAN

FY2013 – FY2018

MISSION STATEMENT
•
•
•
•

Exercise exclusive state regulatory authority over public service corporations
(public utilities) in the public interest;
Grant corporate status and maintain public records;
Ensure the integrity of the securities marketplace; and
Foster the safe operation of railroads and gas pipelines in Arizona.

1200 WEST WASHINGTON; PHOENIX, ARIZONA 85007-2996 / 400 WEST CONGRESS STREET; TUCSON, ARIZONA 85701-1347

www.azcc.gov

TABLE OF CONTENTS
Overview

3

Organization

3

Division Overview
Administration
Corporations
Hearings
Information Technology
Legal
Safety
Securities
Utilities

3
3
4
4
4
5
5
5
5

Division Mission Statement
Administration
Corporations
Hearings
Information Technology
Legal
Safety
Securities
Utilities

6
6
6
6
6
6
6
6
7

Goals
Administration
Corporations
Hearings
Information Technology
Legal
Safety
Securities
Utilities

7
7
7
7
7
7
7
8
8

Performance Measures
Administration
Corporations
Hearings
Information Technology
Legal
Safety
Securities
Utilities

8
8
8
8
8
9
9
9
9

Strategic Issues

9
2

Overview
The Arizona Corporation Commission was established in the Arizona Constitution in 1912. Only
seven states have constitutionally formed Commissions. Arizona is one of thirteen (13) states with
elected Commissioners. In the other thirty-seven (37) states, Commissioners are appointed by either
the governor or the legislature.
In most states, the Commission is known as the Public Service Commission or the Public Utility
Commission. However, in Arizona the Commission also oversees the process of incorporating or
registering a company to do business in the state, registers and oversees securities offerings and
dealers, and enforces railroad and pipeline safety.
By virtue of the Arizona Constitution, the Commissioners function in an executive capacity; they
adopt rules and regulations thereby functioning in a legislative capacity; and they also act in a
judicial capacity sitting as a tribunal and making decisions in contested matters. The Commission is
required by the Arizona Constitution to maintain its chief office in Phoenix and is required by law to
conduct monthly meetings.
Organization
Commissioners are elected by the people of Arizona for a four-year term, with two or three
members standing for election in the statewide general election in alternating election cycles. In the
case of a vacancy, the Governor appoints a Commissioner to serve until the next general election. In
the 2000 General Election, the Arizona Corporation Commission was the subject of a ballot
proposition expanding the Commission by two seats to a total of five members.
Ultimate responsibility for final decisions on granting or denying rate adjustments, enforcing safety
and public service requirements, and approving securities matters rests with the Commissioners.
The administrative head of the Commission is the Executive Director who serves at the pleasure of
the Commissioners. He is responsible to the Commissioners for the day to day operations of all
Divisions.
Division Overview
The Commission is organized into eight Divisions. They are: Administration, Corporations,
Hearings, Information Technology, Legal, Safety, Securities, and Utilities. Each Division is
headed by a Division Director who reports to the Executive Director. The Divisions are responsible
for revenue generation as well as being subject to legislative appropriation.
Administration
The Administrative Services Director oversees the administrative and fiscal functions of the
Commission. The Administrative Services office provides accounting, payroll, purchasing, and
personnel support for the entire Commission. The Division is working towards improving efficiency
through modernization of electronic processing and enhancing the Division's information
technology and infrastructure.

3

Corporations
The Corporations Division is comprised of five (5) sections including Annual Reports, Corporate
Filings, Records, Call Center, and Initial Processing, as well as a small satellite office in Tucson.
The Corporations Division approves for filing all articles of incorporation, amendments to articles,
mergers, consolidations, withdrawals, and dissolutions for Arizona corporations; approves corporate
and limited liability company (LLC) names; approves all articles of organization, amendments,
changes and terminations for LLCs; grants authority to foreign corporations and LLCs transacting
business in this State; propounds interrogatories when necessary; and may administratively dissolve
or revoke corporations and LLCs that do not comply with specific provisions of Arizona law.
The Division collects from every corporation an annual report reflecting the current statutory agent,
corporate address, amount of stock issued (forprofits), lists of officers and directors, Certificate of
Disclosure, Statement of Bankruptcy. The Division updates the corporation's public record with
information provided by the annual report and also when amendments or changes are submitted by
the corporation. The Division must maintain all information on corporations and LLCs in a data
format conducive to public access; respond to public questions concerning Arizona corporations and
LLCs; and respond to the needs of the business sector by disseminating information. The Division
has limited investigatory powers and no regulatory authority. Arizona corporations and LLCs,
however, may be administratively dissolved if certain statutory requirements are not met. Likewise,
the authority of foreign (non-Arizona) corporations or LLCs to transact business in Arizona may be
administratively revoked. The Division acts as an agent for Arizona corporations and limited
liability companies whenever either entity does not maintain a statutory agent or when the agent
cannot be located. In these instances, services of process directed to the entity are accepted by the
Records Section on behalf of the entity. The Division is working towards improving efficiency
through modernization of electronic processing and enhancing the Division's information
technology and infrastructure.
Hearings
The Hearing Division exercises the Commission’s authority to hold public evidentiary hearings on
matters involving the regulation and deregulation of public service corporations, the sale of
securities and the registration of non-municipal corporations. Under the direction of the presiding
Administrative Law Judge (“ALJ”), proceedings are conducted on a formal basis through the taking
of sworn testimony, the cross-examination of witnesses, the admission of documentary and other
physical evidence, and the submission of oral arguments or post-hearing briefs.
Evidentiary and procedural rulings are made by the presiding Administrative Law Judge from the
bench. Rate and Certificate of Convenience and Necessity (“CC&N”) applications are processed
under the procedural schedule established by the Administrative Law Judges, in order to ensure that
recommended Opinion and Orders are issued in a timely manner within the framework of the
Commission’s rules.
The Division is also responsible for Commission record-keeping through its Docket Control Center.
The Division is working towards improving efficiency through modernization of electronic
processing and enhancing the Division's information technology and infrastructure.
Information Technology
The Information Technology Division provides technology services and support such as application
development, network services, hardware support, and project management for the entire
4

Commission. The Division is working towards improving efficiency through modernization of
electronic processing and enhancing the Division's information technology and infrastructure.
Legal
Matters handled by the Legal Division fall into five general categories: Commission dockets; federal
regulatory dockets; litigation; other administrative matters; and special projects. Most of the
division's resources are devoted to commission proceedings and to litigation. The Legal Division
represents the Commission in all matters relating to public utility-rate setting, and in other areas not
associated with the Securities Division. Securities-related legal cases are litigated by the Attorney
General's Office. The Division is working towards improving efficiency through modernization of
electronic processing and enhancing the Division's information technology and infrastructure.
Safety
The Safety Division consists of two groups—Pipeline Safety and Railroad Safety. The Pipeline
Safety Section enforces the Arizona Underground Facilities Law and oversees the construction,
operations and maintenance of all intrastate and interstate natural gas, other gases, liquefied natural
gas, and hazardous liquid pipeline facilities operating within the State of Arizona. The Railroad
Safety Section oversees the operation and maintenance of all railroad operations, track maintenance
and railroad/street grade crossings. The Division is working towards improving efficiency through
modernization of electronic processing and enhancing the Division's information technology and
infrastructure.
Securities
The Division reviews prospective offerings of securities to ascertain that full and fair disclosure is
made to potential securities investors and that the terms of offerings are not inherently fraudulent.
Securities dealers and salespersons are required to register with the Division. Investment advisers
and their representatives are required to be licensed by the Division unless exempt. The Division
reviews these applications and monitors the conduct of dealers and salespersons, investment
advisers, and their representatives and investigates possible violations. Where the evidence
warrants, the Division brings administrative, civil, or criminal enforcement actions. The Division
is working towards improving efficiency through modernization of electronic processing and
enhancing the Division's information technology and infrastructure.
Utilities
The Utilities Division carries out its responsibilities through five organizational sections: Finance
and Regulatory Analysis, Telecom and Energy, Engineering, Compliance, and Consumer Services.
The Utilities Division makes specific recommendations to the Commissioners to assist them in
reaching decisions regarding public utility rates, financial condition and quality of service for
approximately 670 traditional utilities. The Division implements the Commission rules for
deregulation of segments of the telecommunications and electric industries. The Division conducts
research, presents evidence in hearings, and contracts with utility rate analysts and expert witnesses
in carrying out its responsibilities. The Division also monitors compliance with Commission
decisions. The staff conducts public workshops and other public proceedings on various regulatory
topics. The Division is working towards improving efficiency through modernization of electronic
processing and enhancing the Division's information technology and infrastructure.

5

DIVISION MISSION STATEMENTS
Administration
Mission: To provide the executive leadership and decision-making authority for the timely
resolution of matters coming before the Commission. To plan, coordinate and direct the
administrative and fiscal activities necessary to support the Commissioners and all divisions of the
Commission.
Corporations
Mission: To approve corporate names and grant corporate or limited liability company status to
entities organizing under the laws of the State of Arizona; to approve applications from foreign
corporations and limited liability companies to transact business in this State; to collect annual
reports from all corporations of record; and to maintain corporate and limited liability company
records for the benefit of public record and service of process
Hearings
Mission: To preside over administrative hearings and procedural conferences concerning complex
utility and securities matters, and to write and submit Proposed Opinion and Orders for the
Commissioners' consideration at Open Meeting.
Information Technology
Mission: To provide accurate, efficient, and timely technology design, development,
implementation, communications and maintenance support services to the agency and its respective
divisions.
Legal
Mission: To provide legal representation to the Corporation Commission in the performance of all
of its powers and duties, except for matters pertaining to the activities of the Securities Division.
Safety
Railroad
Mission: To ensure that the citizens of Arizona as well as railroad employees throughout the State
have a Railroad System that is operated and maintained in as safe a manner as possible.
Pipeline
Mission: To enforce federal and state pipeline safety regulations and to provide training and
guidance to pipeline operators to ensure safe operation of pipeline facilities. To enforce the Arizona
Underground Facilities Law and to provide training to facility owners and excavators in an attempt
to reduce damage to underground facilities and to eliminate personal injuries and deaths associated
with underground facilities.
Securities
Mission: To ensure the integrity of the securities marketplace through investigative actions as well
as the registration and/or oversight of securities, securities dealers and brokers, investment advisers,
and their representatives; to enhance legitimate capital formation; and to minimize the unnecessary
burden and expense of regulatory compliance by legitimate businesses.

6

Utilities
Mission: To conduct research and analysis and provide recommendations to the elected
commissioners on all matters relating to the regulation of public service corporations (public
utilities) under the state constitution and statutes to ensure their actions are consistent with the
public interest
GOALS
Administration
1. To ensure all matters coming before the Commission are resolved in a timely manner, in
accordance with administrative procedures.
2. To provide business services to all Divisions.
Corporations
1. To provide customers with timely processing of their business documents.
2. To provide customers the most expedient public information services possible.
3. To streamline and improve internal customer-related administrative/ operational functions.
4. To expand training opportunities for division staff members.
5. To continually improve customer service and customer satisfaction.
Hearings
1. To conduct fair and impartial hearings, and to propose timely, factually, and legally sound
Orders for the Commissioners' consideration.
2. To provide timely and efficient docket services to regulated utilities and consumers.
Information Technology
1. To provide electronic interaction effectively with the public and other governmental entities.
In addition, to implement effective protocols, software, and communication with the public
to allow them to retrieve and submit data, forms, and all other documents.
2. To use information technologies effectively to enhance intra-agency Communications.
3. To improve employees' preparation to use technology and react to their job-specific needs.
Legal
1. To provide efficient, high-quality legal representation.
2. To provide high-quality representation in administrative matters before the Corporation
Commission.
3. To provide high-quality representation in Judicial matters before various courts.
4. To provide high-quality legal advice to the Commission.
Safety
Railroad
1. To promote and ensure the safe operation of Arizona railroads.
2. To ensure rail/highway grade crossings safety.
Pipeline
1. To protect the public and the environment by providing the highest level of pipeline safety
awareness.

7

2. To ensure the pipeline operators in Arizona operate gas pipeline systems as safely as
possible.
3. To receive and maintain an interagency agreement with the Federal Dept. of Transportation
to ensure safe operations of interstate pipeline
4. To maintain and improve the professional skills of the ACC pipeline staff.
Securities
1. To ensure that registered securities offered to public investors are structured fairly and
equitably and fully disclose all information necessary for an investor to make an informed
decision.
2. To reduce the public investor losses and protect Arizona's reputation from damage caused by
fraudulent sales and services peddled to victims by unlicensed and unregistered frauds.
3. Continue to monitor the integrity of the investment marketplace to allow for enhanced
capitol formation while deterring and adjudicating fraudulent practices.
Utilities
1. To ensure that utility service within the Commission's jurisdiction is available to all
consumers at authorized rates.
2. To promote the transition of the telecommunications and electricity generation markets from
the current regulated monopoly structure to one of competition while ensuring safe and
reliable service.
3. To maximize the Division's operating efficiency through modernization of electronic
processing and enhancing the Division's information technology.
4. To maintain public involvement, accessibility, and regulatory oversight by conducting
workshops, forums, and community outreach programs.
PERFORMANCE MEASURES
Administration
1. Increase rate-case efficiencies by reducing the interval between “sufficiency” and final
disposition.
2. Monitor the number of division purchase orders issued.
Corporations
1. Measure processing times of regular and expedited filings.
2. Compare the number of public information requests by type and response time.
3. Measure internal agency document processing activities.
4. Maintain and promote professional staff development.
5. Evaluate and utilize feedback from customer satisfaction surveys
Hearings
1. Monitor the number of re-hearings due to Hearing Officer error.
2. Maintain efficient processing times and protect the integrity of all public record papers.
Information Technology
1. Monitor electronic public access and electronic filings.
2. Monitor internal agency electronic usage.
3. Maintain updated staff development through IT training courses.
8

Legal
1.
2.
3.
4.

Maintain current attorney/staff continuing legal education.
Monitor legal activities by task and caseload.
Monitor appeals of commission decisions and related pleadings.
Monitor attorney caseload by the number of appearances and by type of hearing.

Safety
Railroad
1. Track the frequency of inspections (by type), violations, derailments, complaints, safety
presentations; monitor Hazmat accidents/incidents.
2. Monitor grade crossings and signal/train control inspections.
Pipeline
1. Monitor violations and inspections (by type), and track public awareness seminars.
2. Measure the number of intrastate violations and master meter violations corrected; maintain
safety training classes for Master Meter and Blue Stake, and track class attendance.
3. Maintain renewal of interstate agreements for gas and liquids.
4. Maintain professional staff development and training.
Securities
1. Examine all incoming applications/filings, registrations/exemptions, examinations, dealer
and salesmen registrations and measure internal agency review time.
2. Measure and monitor the number of enforcement actions/proceedings by type and outcome.
Utilities
1. Measure the annual number of rate cases and tariff applications against the number of
utilities regulated.
2. Monitor the number of filings, applications and interconnection agreements.
3. Track of the number of consumer complaints/requests submitted electronically.
4. Track the number of public programs conducted.

STRATEGIC ISSUES
Strategic Issue 1:

Electronic filing agency-wide at the Arizona Corporation Commission

Description: Electronic filing in all divisions at the Commission will allow the public to submit
and access different types of filings regarding proceedings, rulemakings, licensing,
authorizations, complaints, annual reports and other official forms.
Objective:

To complete the process of transitioning to an agency-wide electronic filing platform
by FY2018

Strategies:

Beginning in FY2013 and continuing through FY2018, the Commission will:
• Perform a detailed review of all filings at the Commission.
• Make an assessment of the transition process to electronic filing platform agencywide.
9

•

Develop and integrate the necessary databases so that all public information is
gathered and processed in a streamlined manner so as to provide easy access to
filings, information and reports.

Resource Assumptions:
Funding: The anticipated need to fund this project in FY2015 is approximately
$1,000,000 (PAF, SRF, SIA and URRF fund sources).
Employee capacity: The commission will utilize current staff as well as hire outside
consultants to perform tasks required for implementation.

Strategic Issue 2:

Update Division database reporting capabilities

Description: Updating the database reporting capabilities of the Utilities and Securities Divisions
will better enable staff to meet the needs and demands of their customers, and the
citizens of Arizona whom they serve.
Objective:

Strategies:

Beginning in FY 2015, the Commission will initiate the process of assessing and
updating the software needs of the Utilities and Securities divisions.
•
•
•
•

Review the current needs of the division.
Plan and develop the requirements and configurations of the necessary software.
Install and test the new software.
Evaluate the software to rate its success.

Resource Assumptions:
Funding: At this time, estimated costs for updating the software and database for the
Securities Division alone is approximately $250,000 to $500,000. This customizable
software is in use by other states’ securities regulatory agencies. (SRF and SIA fund
sources)
The anticipated need to fund 2 mid-level developers as well as consultants is
approximately $500,000 (URRF fund source)
Employee Capacity:
1. Re-deploy current staff from current projects to these new projects.
2. Add two (2) additional mid-level developers to assist with these projects.
3. Using consultants as part of this effort, a need for $300,000 is anticipated.

10