large customer energy supply

HB4097 - 572R - I Ver

REFERENCE TITLE:
large customer energy supply

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 4097

Introduced by

Representative
Heap

AN
ACT

Amending title 40, chapter 2, article 1,
arizona revised statutes, by adding SECTION 40-207; amending section 40-281,
arizona revised statutes; relating to public service corporations.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 40, chapter 2, article 1,
Arizona Revised Statutes, is amended by adding section 40-207, to read:

START_STATUTE
40-207.

Large customer self-supply; dedicated generation; registration;
limitations; definitions

A. A large customer may obtain
electricity through dedicated generation and self-supply by using a self-supply
facility and private lines.� This section does not:

1. Authorize a person to provide
retail electric service to the general public or to customers who are not
listed in subsection B of this section.

2. Establish a general retail choice
program.

B. A self-supply facility and
private lines that are authorized by this section may serve only:

1. The large customer.

2. An eligible affiliated load if
either of the following applies:

(
a
) the served
loads are within a single integrated site or campus that is under common
control.

(
b
) Any
colocation or tenant load is served under bundled service as described in
subsection C of this section.

C. A large customer that owns or
controls a site may provide electricity from a self-supply facility to
colocation tenants on the site if all the following apply:

1. The tenant is not separately
billed on a per kilowatt hour basis.

2. The tenant does not receive a
separate electricity invoice or tariffed electric rate from the large customer
or self-supply operator.

3. The eLECTRICITY is provided only
as an incidental bundled component of the tenant's rent, license or managed
services.

D. If electricity is separately
metered and sold, resold, redistributed or retransmitted as a distinct
commodity to multiple nonaffiliated end users, the provider is not eligible
under this section and shall comply with applicable laws that govern public
service corporations and certificates of convenience and necessity.

E. Before commencing construction of
a self-supply facility that is intended to serve load within the
certificated service TERRITORY of an electric distribution utility or public
service corporation, a large customer or self-supply operator shall file
a self-supply registration with the commission.� The self-supply
registration must include:

1. The large customer's identity and
site locations.

2. The planned peak demand and load
profile.

3. The technology type, name plate
capacity and expected in-service date.

4. A one line diagram that shows
whether the facility is behind-the-meter, grid tied or islandable.

5. Whether the project will
interconnect with the incumbent utility and, if so, the requested
interconnection voltage and point of interconnection.

6. An attestation, under penalty of
perjury, that the self-supply facility will only serve load pursuant to
the requirements of subsections B and C of this section and will not sell
electricity to the public.

7. Evidence of compliance with
applicable environmental and local permitting requirements or a plan and
schedule for obtaining the permits.

F. The registrant shall provide a
copy of the self-supply registration to the incumbent electric
distribution UTILITY serving the site.

G. Within sixty days after a complete
self-supply registration is filed, the commission shall issue a written
determination that the project either:

1. Qualifies as self-supply pursuant
to this section.

2. Does not qualify as self-supply
because the project would constitute furnishing electricity to the public or
otherwise require a CERTIFICATE of convenience and necessity under this title.

H. If the commission does not issue a
written deficiency notice within TWENTY days after FILING, the self-supply
registration is deemed complete.� If the commission does not issue a written
determination within sixty days after the self-supply registration is
complete, the self-supply registration is deemed approved.

I. The commission's determination
under subsection G of this section is limited to whether the proposal qualifies
under subsections B and C of this section and whether the proposal, as
registered, would require a certificate of convenience and necessity as a
public service corporation.

J. A self-supply facility may
be any of the following:

1. Behind-the-meter
without export.

2. Grid tied with or without export,
subject to tariffs and interconnection requirements.

3. Islandable to serve the load
during grid outages, subject to applicable safety standards.

K. If the self-supply facility
interconnects with an incumbent utility, the registrant shall:

1. Comply with applicable
interconnection standards.

2. Pay the reasonable and prudent
costs of interconnection and any dedicated upgrades that are caused by the
project, consistent with commission-approved tariffs.

L. This section does not:

1. Require an INCUMBENT utility to
provide standby, backup or supplemental service on terms other than those in
approved tariffs and does not prohibit the incumbent utility from offering the
service.

2. Grant a self-supply operator
the right to use public streets or public rights-of-way to furnish
ELECTRICITY to the public.

3. Alter any incumbent utility's duty
to serve other customers within its service territory or alter existing service
territory boundaries.

M. If the commission determines after
notice and an opportunity for a hearing that a REGISTRANT has violated
subsection B or C of this section by selling electricity to disallowed users as
a commodity, the commission may revoke the registrant's self-supply
registration or order the registrant to cease and desist from the UNAUTHORIZEd
furnishing of ELECTRICITY.� Revocation under this subsection does not limit
other remedies available by law.

N. THe commission may adopt rules to
administer this section that:

1. Shall be consistent with the scope
of review prescribed in subsection I of this section.

2. May not impose requirements that
unreasonably delay or burden qualifying self-supply projects.

O. For the purposes of this section:

1. "DEDICATED GENERATION"
MEANS GENERATION CAPACITY AND ASSOCIATED FACILITIES that are DEVELOPED FOR THE
PRIMARY PURPOSE OF SERVING THE LARGE CUSTOMER UNDER THIS SECTION, WHETHER
LOCATED ON THE SAME PARCEL AS THE CUSTOMER LOAD OR ON A DIFFERENT SITE WITHIN
THIS STATE, if THE ELECTRICITY iS DELIVERED ONLY AS AUTHORIZED PURSUANT TO THIS
SECTION.

2. "eLIGIBLE AFFILIATED
LOAD":

(
a
) MEANS
ADDITIONAL LOAD THAT MAY BE SERVED WITHOUT CAUSING THE ACTIVITY TO BE TREATED
AS FURNISHING ELECTRICITY TO THE PUBLIC FOR THE PURPOSES OF aRTICLE xv, sECTION
2, cONSTITUTION of Arizona.

(
b
) INCLUDES:

(
i
) LOAD of the
large customer's parent, subsidiary or affiliate under common control.

(
ii
) Load that
is located on the same site and that is operated as part of an integrated
campus under common control.

(
c
) In the case
of colocation or managed service ARRANGEMENTS, tenant load that is located on
the same site only if ELECTRICITY CHARGES are not unbundled and separately sold
as a metered commodity and are instead included as a bundled component of rent
or services.

3. "Large customer" means a
retail end-use customer with a DEMONSTRATED or planned peak demand of
either:

(
a
) At least
twenty-five megawatts at a single site within this state.

(
b
) Another
threshold as determined by the commission except that the threshold must be at
least ten megawatts.

4. "Private line" means
electrical facilities that are owned, leased, controlled or operated by a large
customer or a self-supply operator under contract with the large
customer, that do not provide distribution service to the general public and
that are used solely to serve the large customer and eligible affiliated load
authorized by this section.

5. "self-supply"
means the generation, storage and delivery of electricity that is intended
solely for consumption by a large customer and its eligible affiliated load and
that is not for sale to the public.

6. "Self-supply
facility" means one or more generation units, energy storage RESOURCES and
related equipment, together with private lines and interconnection equipment,
that are used to provide self-supply.

7. "Self-supply
operator" means an entity that owns or operates a self-supply
facility on behalf of a large customer under contract and that is prohibited
from furnishing ELECTRICITY except as authorized by this section.

P. This section does not affect or
modify the commission's constitutional and statutory authority.

END_STATUTE

Sec. 2. Section 40-281, Arizona Revised
Statutes, is amended to read:

START_STATUTE
40-281
.
Certificate required before construction by public service
corporation; exceptions; complaint by corporation injuriously affected by
construction hearing; exclusive franchise or monopoly

A. A public service corporation, other than a
railroad, shall not begin construction of a street railroad, a line, plant,
service or system, or any extension thereof, without first having obtained from
the commission a certificate of public convenience and necessity.

B. This section
shall

does
not require such corporation to secure a certificate for
an extension within a city, county or town within which it has lawfully
commenced operations, or for an extension into territory either within or
without a city, county or town, contiguous to its street railroad or line,
plant or system, and not served by a public service corporation of like
character, or for an extension within or to territory already served by it,
necessary in the ordinary course of its business. If a public
service corporation, in constructing or extending its line, plant or system,
interferes or is about to interfere with the operation of the line, plant or
system of any other public service corporation already constructed, the
commission, on complaint of the corporation claiming to be injuriously
affected,
may,
after hearing,
may

make an order and prescribe terms and conditions for the location of lines,
plants or systems affected as it deems just and reasonable.

C.
No such

A
public service
corporation shall
not
exercise any
right or privilege under any franchise or permit without first having obtained
from the commission a certificate of public convenience and necessity.

D. This article
shall

does
not
be construed
as granting or as having granted

grant
to any
telecommunications corporation an exclusive franchise or monopoly within the
territory described by its certificate unless the commission determines after
notice and hearing that such an exclusive franchise or monopoly is in the
public interest.

E. When the commission determines after notice and
hearing that any product or service of a telecommunications corporation is
neither essential nor integral to the public service rendered by
such

the telecommunications
corporation,
it

the commission
shall declare that such product or service
is not subject to regulation by the commission.

F. This section does not require a
certificate of public convenience and necessity for the construction or
operation of a self-supply facility that is registered and approved under
section 40-207 and that does not furnish electricity to the public.
END_STATUTE

Sec. 3.
Short title

This act may be cited as the
"Bring Your Own Power Bill Act".