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APS suspends price comparison tool after customers said it steered them to higher rates

The tool was supposed to help customers save money. Instead it did the opposite.

Utility giant APS has suspended its online price comparison tool after two customers demonstrated how it directed them to more expensive plans.

The ramifications of the blunder could be serious and far-reaching, given that an unknown number of customers paid more than they should have for electricity on the advice of APS.

“I don’t know how many customers it affects. It could be two customers or 1.2 million customers, or somewhere in between,” said Abhay Padgaonkar, an APS customer and expert witness in last year’s rate challenge. 

Padgaonkar notified the Arizona Corporation Commission this week about the errors and demonstrated to Commissioner Justin Olson step-by-step how the online calculator gives bad advice.

“The comparison tool says it will save customers money and my analysis showed it would cost hundreds of dollars more (annually),” Padoankar said.

Representatives of APS met with Olson on Friday and assured him they are trying to determine the cause of the problem. They said the comparison tool was developed by a third-party vendor, Olson said.

RELATED: Is a taxpayer-funded office that is supposed to advocate for Arizona’s utility ratepayers standing up to APS?

“We need to understand what went wrong, how it went wrong. We need to understand when APS knew that something went wrong,” Olson said.

Olson said the Corporation Commission has been directing confused APS customers to the rate comparison tool to find the best plan for them.

“How many customers relied on faulty information that was provided to them by the utility?” Olson said. “Those customers will be entitled to some answer, some response to determine how they can be made whole from this.” 

The rate comparison tool was first introduced in 2016. According to a third-party audit released last month, the tool was "generally effective" but the audit noted it did not explain how it arrived at its calculations. 

RELATED: Audit report: APS earned $77 million more than expected in 2018, 80% from customers

The auditor, Overland Consulting, also noted that auditors were "unable to gain direct access to test the tool." Olson called that a “huge red flag.”

“Did the utility already see there was a problem and seek to cover it up? I don’t know if that’s a fact. But if it is, that’s a very big concern,” Olson said.

APS representatives Jill Hanks and Suzanne Trevino did not respond to questions from 12 News sent to them by email Thursday.


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