Phelps Dodge Corp. v. Ariz. Elec. Power Coop., Inc

In Phelps Dodge Corp. v. Ariz. Elec. Power Coop., Inc., 207 Ariz. 95, 83 P.3d 573 (App. 2004), the Court declared a Commission regulation, Ariz. Admin. Code R14-2-1611(A), unconstitutional. 207 Ariz. 95, P39, 83 P.3d at 586. That regulation mandated that rates for power that resulted from the competitive market place "shall be deemed to be just and reasonable." Id. P27, 83 P.3d at 584. Because, however, the Arizona Constitution charges the Commission with setting just and reasonable rates, and because the Commission is required to consider all interests, including interests that may not be accounted for by the free market in doing so, we held that the regulation violated the constitution. Id. P39, 83 P.3d at 586. In Phelps Dodge we also noted that the determination of just and reasonable rates need not be totally separated from market forces. 207 Ariz. at 95, P32, 83 P.3d at 585. "Although the Commission may be influenced by market forces, in determining what rates are 'just and reasonable,' the Commission may not abdicate its constitutional responsibility to set just and reasonable rates by allowing competitive market forces alone to do so." Id.