Electric Competition (March 2008, Report No. 08-01)

Arizona electric competition statutes require electric distribution utilities to serve as the providers of last resort in their respective service territories and allow exclusive transmission and distribution service territories. Electric competition never materialized in Arizona, but providers of last resort provisions ensure that all consumers will have access to electric services in a competitive market. Bidding for provider of last resort services is not currently practical because there are no competitive electric suppliers. Having exclusive transmission and distribution territories is practical to avoid duplicating infrastructure. Past actions eliminated part of Arizona’s electric competition framework, and the Arizona Corporation Commission may need to revisit the framework.