Sierra Club v. Salt River Project: Utilities Are Included

By Hannah Bernier. 

The Arizona Court of Appeals recently held that the Salt River Project Agricultural Improvement District (“SRP”) is subject to Arizona Public Records Law. This decision reflects SRP’s dual roles as a private utility cooperative and a political subdivision of the state.

Salt River Project

SRP is a public utility that provides water and electricity to central Arizonans in its service areas. The utility consists of two organizations: the Salt River Valley Water User’s Association (“the Association”) and the Salt River Project Agricultural Improvement and Power District (“the District”). The Association, established in 1903, is a utility cooperative that delivers water to over two million central Arizonans through its reservoir system. The District, established in 1937, is an agricultural improvement district and political, taxing subdivision of the state that finances the Association. Both entities work in conjunction to operate federal reclamation projects in the Valley, including 1,265 miles of canals and four hydroelectric dams along the Salt and Verde Rivers.

The District is a government entity, while the Association is a private water corporation. As a government entity, SRP is generally not subject to Arizona Corporation Commission (“ACC”) rate regulations and approval processes that regulate investor-owned utilities like Arizona Public Service (“APS”). Instead, the District and Association are governed by elected board and council members, and SRP’s Board of Directors sets rates. The lack of significant oversight from the ACC makes public input on SRP’s activities even more consequential.

Case Background

This dispute arose during SRP’s Integrated System Plan (“ISP”) process, which coordinates SRP’s short- and long-term resource strategies with stakeholder input. Sierra Club, a participant in the planning process, opposed SRP’s plan to expand its Coolidge Generation Station, which is powered by natural gas.

Under Arizona Public Records Law, Sierra Club twice requested SRP’s records related to the ISP. Although SRP voluntarily disclosed some of the requested documents, it withheld others citing that (1) it was not subject to the Public Records Law and that (2) some of the information was confidential and thus not subject to disclosure. Sierra Club initiated a statutory special action under the Public Records Law, seeking to compel the production of the withheld documents.

The superior court dismissed the Sierra Club’s special action, holding that SRP, while a public body subject to the Public Records Law, did not need to produce the documents because they were presumed confidential under Ariz. Rev. Stat. § 30-805(B). Sierra Club appealed to the Arizona Court of Appeals.

The Arizona Court of Appeals’ Decision

The Arizona Court of Appeals reversed, with two important holdings.

First, the court determined that SRP is a public body subject to the Public Records Law. Arizona’s Public Records Law, Title 39, requires public bodies to maintain records regarding their official activities and make them available to the public upon request. Public bodies include, among other entities, political subdivisions and tax-supported districts. Article XIII, Section 7 of the Arizona Constitution and Title 48, Chapter 17 define agricultural improvement districts as political subdivisions of the state.

SRP argued that while it is a political subdivision for certain purposes, it is not a political subdivision under the Public Records Law because it is not a “tax-supported district,” and any political subdivision that is not tax-supported is implicitly excluded from the Public Records Law. The court disagreed, finding that the statute defines a public body as any political subdivision or a tax-supported district and that SRP plainly falls within this definition. 

Second, the court found that SRP’s records are not presumptively confidential without a full public records analysis. Arizona Public Records Law has a presumption in favor of disclosure of records, although the presumption does not arise if another statute makes those records confidential. Ariz. Rev. Stat. § 30-805(B) provides that records related to competitive activity are confidential “if the disclosure of the information could give a material advantage to another entity.” The statute further states that information covered under this section “is similar to the information that would be confidential under § 40-204 if reported by a public service corporation to the [ACC].” Ariz. Rev. Stat. § 40-204(C) establishes that public service corporations’ information it provides to the ACC is presumed confidential.

The superior court found that these two statutes—taken together—presume that public service corporation and public power entity records are confidential. The court of appeals disagreed: it found that Section 30-805(B)’s mention of Section 40-204 acts as a guidepost rather than an incorporation of the statute’s contents. Thus, it found that a court must analyze whether the records relate to a competitive activity rather than presuming the records are confidential. 

Ultimately, the court of appeals vacated the superior court’s decision and remanded the case back to the superior court to analyze the records’ confidentiality under the framework established by this opinion.

Implications

Although significant to SRP, this decision likely has limited legal implications outside of SRP’s legal status. In many cases, it is clear whether an organization is a public body subject to Arizona’s Public Records Law. It also appears that SRP complies with other aspects of its status as a political subdivision, including having District meetings open to the public.

There will likely be increased public records requests for SRP’s information regarding its continued reliance on fossil fuels and residential solar policies, which have both come under scrutiny from citizens and clean energy advocacy groups. This case will likely require SRP to become more transparent about its activities and will allow advocacy groups like the Sierra Club to gain more information about SRP’s activities outside of a litigation setting.

SRP’s status as a political subdivision brings with it rights, privileges, and immunities alongside duties to the public. It can issue tax-exempt municipal bonds. It is shielded from federal antitrust damages. It has the power of eminent domain. Now, SRP must honor a quintessential duty of political subdivisions: compliance with Arizona’s Public Records Law.