Arizona Revised Statutes

Ariz. Rev. Stat. § 40-321 (2026)

Power of commission to determine adequacy of service rendered by public service corporation; enforcement by order or regulation; duty of compliance by corporation; surety; utility surety fund

✓ current as of May 2026
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A. When the commission finds that the equipment, appliances, facilities or service of any public service corporation, or the methods of manufacture, distribution, transmission, storage or supply employed by it, are unjust, unreasonable, unsafe, improper, inadequate or insufficient, the commission shall determine what is just, reasonable, safe, proper, adequate or sufficient, and shall enforce its determination by order or regulation.

B. The commission shall prescribe regulations for the performance of any service or the furnishing of any commodity, and upon proper demand and tender of rates, the public service corporation shall furnish the commodity or render the service within the time and upon the conditions prescribed.

C. If, after notice and an opportunity to be heard, the commission finds that a public service corporation is in default of the terms and conditions of an order of the commission that requires a performance bond, irrevocable letter of credit or other surety, and the commission exercises its rights under the bond, letter or other surety, the commission shall deposit all monies received as a result of exercising the rights in the utility surety fund established by subsection D of this section.

D. The utility surety fund is established consisting of monies received by the commission pursuant to subsection C of this section.  Monies in the utility surety fund shall be administered by the commission for the benefit of the customers of the public service corporation who have incurred a loss of services or commodities or for deposit support pursuant to this section. Monies in the fund are continuously appropriated to the commission and do not revert to the state general fund pursuant to section 35-190.

 

Notes of Decisions
Cited in 12 cases, 1965–2020 · leading case: Campbell v. Mountain States Tel. & Tel. Co., 586 P.2d 987 (Ariz. Ct. App. 1978).
Campbell v. Mountain States Tel. & Tel. Co., 586 P.2d 987 (Ariz. Ct. App. 1978). · cites it 5× “, and § 40-321 et seq., or the doctrine of primary jurisdiction, require the appellant, Madeline Campbell, to assert her tort and breach of contract claims against appellees in a complaint to the Arizona Corporation Commission before suing on those claims in Superi- or Court.”
Ball v. James, 451 U.S. 355 (1981). · cites it 2× “See Ariz. Rev. Stat. Ann. § 40-321 (1974). The rate structure of the District now before us, however, is not subject to control by another state agency because the District is a municipal corporation and itself purports to perform the public function of protecting the public…”
Johnson v. Acc, 438 P.3d 656 (Ariz. Ct. App. 2019). · cites it 9× “15, § 3, and its statutorily delegated power to determine a “just” remedy for “inadequate” public- utility equipment, facilities, or services under A.R.S. § 40-321(A), provide the Commission with sufficient authority to impose an interim manager under appropriate circumstances.”
Arizona Water Co. v. Arizona Dep't of Water Resources, 91 P.3d 990 (Ariz. 2004). · cites it 2× “See A.R.S. § 40-321(B) (2001) (requiring public service corporations to render service "upon proper demand and tender of rates”).”
S. Pac. Co. v. Arizona Corp. Com'n, 404 P.2d 692 (Ariz. 1965). · cites it 6× “[2] It also points to A.R.S. § 40-321, subsec. A, reading: "A. When the commission finds that the equipment, appliances, facilities or service of any public service corporation * * * are * * * inadequate or insufficient, the commission shall determine what is * * * adequate or…”
James P. Paul Water Co. v. Arizona Corp. Comm'n, 671 P.2d 404 (Ariz. 1983). · cites it 2× “Third, it fails to reward a public service corporation for taking on the risks and obligations concommittant to certification. Once certified to supply *430 water to a parcel of land, a water company must comply with orders and regulations promulgated by the Commission in the…”
Qwest Corp. v. Kelly, 59 P.3d 789 (Ariz. Ct. App. 2002). “Section 40-321 gives the Commission the power to oversee a public service corporation’s business and ensure that it is conducting business in a safe, reasonable, and proper manner.”
James P. Paul Water Co. v. ARIZ. CORP. COM'N, 671 P.2d 404 (Ariz. 1983). · cites it 2× “Third, it fails to reward a public service corporation for taking on the risks and obligations concommittant to certification. Once certified to supply *429 water to a parcel of land, a water company must comply with orders and regulations promulgated by the Commission in the…”
Arizona Corp. Comm'n v. Palm Springs Util. Co., 536 P.2d 245 (Ariz. Ct. App. 1975). · cites it 2× “” Further direction is found in A.R.S. § 40-321 A: “A. When the commission finds that the equipment, appliances, facilities or service of any public service corporation, or the methods of manufacture, distribution, transmission, storage or supply employed by it are unjust,…”
Johnson Utils. LLC v. Arizona Corp. (Ariz. 2020). · cites it 8× “Moreover, A.R.S. § 40-321 authorizes the Commission, upon findings of inadequacy on the part of a public service corporation, to “determine what is just, reasonable, safe, proper, adequate or sufficient, and shall enforce its determination by order or regulation.”
Az Water Co v. Az Dept of Water Resources (Ariz. 2004). · cites it 2× “See A.R.S. § 40-321(B) (2001) (requiring public service corporations to render service “upon proper demand and tender of rates”).”
Qwest Corp. v. Mark McMahon (Ariz. Ct. App. 2002). “Section 40-321 gives the Commission the power to oversee a public service corporation’s business and ensure that it is conducting business in a safe, reasonable, and proper manner.”
— Ariz. Rev. Stat. § 40-321(A) — 3 cases
Johnson v. Acc, 438 P.3d 656 (Ariz. Ct. App. 2019). “15, § 3, and its statutorily delegated power to determine a “just” remedy for “inadequate” public- utility equipment, facilities, or services under A.R.S. § 40-321(A), provide the Commission with sufficient authority to impose an interim manager under appropriate circumstances.”
Campbell v. Mountain States Tel. & Tel. Co., 586 P.2d 987 (Ariz. Ct. App. 1978). “, and § 40-321 et seq., or the doctrine of primary jurisdiction, require the appellant, Madeline Campbell, to assert her tort and breach of contract claims against appellees in a complaint to the Arizona Corporation Commission before suing on those claims in Superi- or Court.”
Johnson Utils. LLC v. Arizona Corp. (Ariz. 2020). “Moreover, A.R.S. § 40-321 authorizes the Commission, upon findings of inadequacy on the part of a public service corporation, to “determine what is just, reasonable, safe, proper, adequate or sufficient, and shall enforce its determination by order or regulation.”
— Ariz. Rev. Stat. § 40-321(B) — 2 cases
Arizona Water Co. v. Arizona Dep't of Water Resources, 91 P.3d 990 (Ariz. 2004). “See A.R.S. § 40-321(B) (2001) (requiring public service corporations to render service "upon proper demand and tender of rates”).”
Az Water Co v. Az Dept of Water Resources (Ariz. 2004). “See A.R.S. § 40-321(B) (2001) (requiring public service corporations to render service “upon proper demand and tender of rates”).”
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