Utility regulators vote to keep rate increase for Arizona's largest electric company

Utility regulators vote to keep rate increase for Arizona's largest electric company

APS customer Stacey Champion tells regulators they acted without justification in approving a rate increase in 2017.

PHOENIX — Utility regulators rejected a last-ditch plea by Arizona Public Service customers to undo the rate hike they approved for the state’s largest electric company in 2017.

The 4-1 vote by the Arizona Corporation Commission late Wednesday, with Sandra Kennedy dissenting, came despite comments from customer and citizen activist Stacey Champion. She argued that the increase is unjustified and criticized the regulators for voting for the plan in the first place.

“Who the hell is running this place?” she asked the commissioners. “Is it staff? Is it APS? Is it staff and APS together?”

Champion had filed the paperwork trying to overturn the higher rates. She was unimpressed that the commission ordered APS to start a new rate review, particularly as it allows the utility to keep collecting the higher rates, at least for the time being.

She said that provides little comfort to those who will have to continue to pay more for the next 12 to 18 months.

Only two of the current members were on the commission in 2017 when it voted to allow the utility to collect another $95 million a year from customers. APS promoted the change as an average 4.54 percent increase, or $6 a month.

But regulators also allowed the company to institute a series of new rate schedules, moving customers into what APS said would be the closest to their current plan.

There were, however, some significant changes in many of the terms, for things like the time-of-day rate plus charges based on peak demand. Champion said about a third of customers ended up with bills sharply higher than the promised $6.

APS has not denied the numbers but said the 4.54 percent was an average. Company officials said some customers actually pay less now.

Champion charges that shifting customers to new rate plans did not necessarily mean the most cost-efficient plans. She said APS is earning far more than the $95 million extra.

But Commissioner Justin Olson said he was hesitant to roll back rates to where they were.

He said even if there are many customers who are paying sharply higher bills under the new rates, there are “hundreds of thousands” of APS customers paying less now than they were before the rate case was approved. Olson said it would not be fair to deny those customers a break while the commission takes another look at the APS rates.

“This is the best way to move forward for all ratepayers,” he said.

The other question weighing on regulators is whether APS would have grounds to sue the commission for taking away the higher rates.

Champion said that should not be a fear “if you’re doing that to protect the public.” She said the record in this case provides more than enough justification for the commissioners to revisit their 2017 decision.

“The public was lied to,” she said.

Commissioner Boyd Dunn, an attorney, said it’s not that simple. “I have no concern about being sued,” he said.

But any review would require that APS get “due process” protections to ensure it is not overturned by a court. And Boyd said that probably would take the same 12 to 18 months that would be needed to review a new APS rate request.

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