Arizona committee advances securitization bill after hours of testimony from utilities and consumer groups

House Bill 26-79, a measure to authorize securitization financing for public service corporations, public power entities and member-owned cooperatives, won a due-pass recommendation from the Arizona House Committee on Natural Resources, Energy and Water after an extended hearing that included utility executives, consumer advocates, municipal and co‑op representatives and residents.

Sponsor Corbin described the bill as setting requirements for initiation, public comment, financing resolutions, and Corporation Commission oversight for transition bonds and securitization transactions. The bill would exempt certain securitized transition bonds from classification as public debt and permit qualified special-purpose entities to issue the bonds.

Supporters said securitization is a proven tool to lower financing costs by refinancing certain utility costs with high‑rated, low‑interest bonds. Michael Vargas, APS director of government affairs, testified that securitization has been used in 33 states to refinance costs tied to storms, wildfires and fuel-price shocks and that it “shields customers from costs associated with changes in federal energy policy” and can lower rate pressure during rapid growth.

Public power and rural co‑op representatives said the tool could help manage extraordinary costs from wildfire or storm damage or large system repairs and could be useful for long-term, large-scale infrastructure needs.

Opponents warned about consumer protections and the bill’s breadth. Sandy Barr of the Sierra Club said HB 26‑79 “deviates from historical uses of securitization,” broadens utility authority without sufficient oversight, lacks a sunset and could allow utilities to securitize assets and then sell plants rather than retire them. Karen Potter of the Southwest Energy Efficiency Project said the bill fails to guarantee that customer savings would be passed through or reinvested in communities and urged further stakeholder negotiation and amendments.

APS associate general counsel Jeff Allman explained that securitization typically removes the utility’s return on equity from the securitized asset and replaces it with lower‑cost bond financing; the bill includes a “transition benefit test” requiring proof of customer savings before a transaction can proceed and oversight by the Arizona Corporation Commission.

Residents from Navajo Nation and rural communities asked the committee to ensure accountability for plant closure, environmental remediation and protection of local economic interests if securitized assets are transferred.

After testimony the committee voted to return HB 26‑79 with a due‑pass recommendation. The committee recorded a due‑pass recommendation on the bill; the committee vote resulted in a recorded outcome of a due-pass recommendation (tally recorded by the clerk as 7 ayes, 2 nays, 1 present). The bill will move forward in the legislative process.

Ending: Committee members said they heard significant concerns and requested further stakeholder engagement and potential floor amendments; supporters said the tool could provide financial relief for ratepayers under specific circumstances.