Arizona utility adjusts disconnect rules as part of settlement

The deal, agreed to by Arizona Public Service, prohibits it from cutting customer power when the temperature is expected to hit 95 or higher. Right now, the utility says it won't unplug customers only between June 1 and Oct. 15.

But Mayes said that's not sufficient. And the proof, she said, is the May 2024 death of 82-year-old Kate Korman whose service APS remotely disconnected due to nonpayment on a day when the temperature reached 99 degrees.

That, said Mayes, won't happen again under the terms of the settlement.

And while the deal announced Wednesday is with Arizona Public Service, Mayes said she is looking at the policies of the state's other power companies, which she said appear in some cases to be "even worse'' than those of APS. And she said they could be in her legal crosshairs if they don't fall in line.

"Those utilities that do not follow the 95-degree hold policy are on notice,'' Mayes said.

"Anything other than 95 degrees (as a limit against power disconnection) is dangerous and can kill people,'' she continued. "And if somebody dies on their watch with a date-based policy, we're coming after them, too.''

APS, for its part, is not admitting it was doing anything improper.

"APS strongly disagrees with the attorney general's characterization of the company's policies, programs and record, and denies any wrongdoing,'' it said in a statement. And it noted that its disconnect policy is in line with both state law and rules of the Arizona Corporation Commission, which regulates private utilities.

But the company said it has "chosen to resolve this matter by adopting enhancements that benefit our customers.''

What that includes, according to the consent judgment — beyond reinstating a 95-degree hold on residential disconnections that it used to have — includes $800,000 to be applied to bill credits to eligible customers facing service termination before the end of August. It will spend another $3.4 million to better educate customers about things like its "safety net'' program that allows them to designate a relative or someone else to be notified by phone, email, text and other methods when power is about to be shut off.

And it will pay $2.75 million into a consumer protection fund run by the AG's office and another $250,000 in legal fees.

Mayes said it should not have taken the death of Korman — found in her home six days after her power was shut off for nonpayment  — to get the change. And she noted that APS has not admitted liability.

"But I do not believe that Kate's death had to happen,'' she said. Still, Mayes said, it was that death and the publicity around it that led her office to investigate and led to the consent judgment.

Mayes said the problem is not strictly with the utility.

She pointed out that it was the Arizona Corporation Commission that approved the company policy allowing it to do disconnections except during certain months, regardless of the weather. It is the commission that has also allowed other utilities like Tucson Electric Power and Unisource to have their own policies.

The two related companies, like APS, have a date-based moratorium on disconnects from June 1 through Oct. 15. But spokesman Joe Barrios said it is "standard practice'' to suspend disconnections when temperatures reach 95 degrees or higher.

And while the commission doesn't regulate Salt River Project — it is classified legally as a municipality — Mayes said that it does answer to the legislature.

SRP says it does not disconnect power to customers during July and August.

It also does not do disconnections when the National Weather Service issues an "extreme heat warning'' for the area. But those are generally tied to weather patterns where daytime temperature breaks 110 degrees, and the mercury fails to drop below 80.

All that, said Mayes, could be — and should have been — addressed by lawmakers and regulators.

"And yet here were are with my office having to step in through a consumer fraud investigation to secure protection that the commission and the legislature could have mandated years ago,'' she said. "This is a gap in oversight that should not exist, and it should not persist.''

Mayes said the fact that the Phoenix area hit triple digits in March — the earliest ever– shows why a calendar-based approach does not work. Tucson also recorded triple-digit heat in March.

Less clear is exactly how the moratorium might work in certain situations.

For example, for APS going forward — and for other utilities if the attorney general gets her way — it can disconnect a customer for nonpayment if the temperature is just 85 degrees. But that leaves the question of what happens when the mercury rises above 95 for the already disconnected customer.

Mayes said she believes the utility would have to reconnect service during those high-heat days. But she said that may yet have to be worked out with APS.

Nothing in the agreement — other than the $800,000 APS is setting aside — absolves customers of their requirement to pay past-due bills after a disconnect moratorium has ended.