Certificates of Convenience and Necessity (CC&Ns) in Arizona are regulatory tools used primarily in the utility sector, particularly for water, wastewater, and electric services. They are granted by the Arizona Corporation Commission and serve several purposes, including regulating utility services, ensuring reliable service to customers, and preventing overlapping or duplicate services within the same geographic area.
What They Are
- Defined: A Certificate of Convenience and Necessity is an authorization issued by the Arizona Corporation Commission that allows a utility company to provide services within a specific geographic area. It essentially grants a monopoly to the utility for that area, meaning no other company can provide the same service within that region without a separate Certificate of Convenience and Necessity.
How They Work
- Application Process: To obtain a Certificate of Convenience and Necessity, a utility company must apply to the Arizona Corporation Commission. The application process involves demonstrating that there is a public need for the service and that the company has the capability to provide reliable and adequate service. This may include submitting plans, maps, financial data, and other documentation to support the application.
- Public Interest: The Arizona Corporation Commission assesses whether granting the Certificate of Convenience and Necessity serves the public interest, which includes ensuring that customers receive reliable and reasonably priced services. Public hearings may be held to gather input from residents, other stakeholders, and interested parties.
- Territorial Limits: A Certificate of Convenience and Necessity delineates specific territorial boundaries within which the utility can operate. Once granted, the utility is obligated to serve all customers within that area. The boundaries can be expanded or modified through additional applications to the Arizona Corporation Commission.
- Regulation and Oversight: Utilities with Certificate of Convenience and Necessity are subject to ongoing regulation by the Arizona Corporation Commission, including oversight of rates, service quality, and other operational aspects. The Arizona Corporation Commission ensures that the utility continues to meet the public’s needs and complies with regulatory standards.
Who They Are Assigned To
- Eligible Entities: Certificate of Convenience and Necessity are assigned to public utilities, which can be private companies, municipal utilities, or cooperatives that provide water, wastewater, electricity, or other essential services.
- Exclusive Rights: The utility that holds a Certificate of Convenience and Necessity has the exclusive right to provide the specified service within the designated area. This exclusivity is intended to prevent competition that might lead to inefficiencies, such as redundant infrastructure.
- Transferability: In some cases, a Certificate of Convenience and Necessity can be transferred to another entity, usually through the sale or acquisition of the utility company. The transfer typically requires approval from the Arizona Corporation Commission to ensure that the new provider can meet the service requirements.
Purpose and Importance
- Consumer Protection: Certificates of Convenience and Necessity are designed to protect consumers by ensuring that utility services are provided reliably and at reasonable rates. By granting a single provider the right to serve an area, the Arizona Corporation Commission can more effectively regulate the service.
- Infrastructure Planning: Certificate of Convenience and Necessity also help in planning and developing infrastructure by preventing overlapping utility services, which can lead to wasteful spending and inefficiencies.
- Service Obligation: Utilities with Certificate of Convenience and Necessity are obligated to serve all customers within their designated area, ensuring that even remote or less profitable areas receive necessary services.
Overall, Certificate of Convenience and Necessity play a crucial role in managing and regulating utility services in Arizona, balancing the need for reliable service with the public interest.
Know your rights, know your options, and have someone in your corner to fight for you. Contact the Dunaway Law Group at 480-702-1608 or messaging us.
The Dunaway Law Group provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice and does not create a lawyer-client or attorney-prospective client relationship. Readers should not act upon this information without seeking advice from professional advisers. Additionally, this Firm limits its practice to the states of Arizona and New York.