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APS faces uphill battle during Monday's public hearing

A crucial hearing starts Monday that is the culmination of a 4-year battle between consumer advocates and APS over proposed rate changes.
Credit: KPNX
APS

PHOENIX — The Arizona Corporation Commission will begin hosting a crucial hearing on Monday that is the culmination of a 4-year battle between consumer advocates and APS over a proposed rate increase. 

A history of mistakes, poor service

The three-day hearing holds major consequences. 

The last rate increase went into effect in August 2017. Consumer advocate Stacey Champion filed a complaint in 2018 against APS that led to a cascade of events over the next three years that exposed over-earnings by APS, a lack of public transparency, a faulty rate comparison tool, and inadequate customer education. 

Earlier this year, APS entered into a $25 million settlement with the Arizona Attorney General’s Office.

RELATED: Brnovich releases details of behind-the-scenes negotiations with APS

APS’s CEO has promised a new era of transparency and accountability for the utility monopoly.

This new hearing will determine how the company will be expected to do business on a number of fronts in the future.

What should be APS’s Return on Equity?

Unlike previous hearings, there appears to be a bipartisan consensus at the commission that APS should pay a price for previous mistakes. 

All five commissioners, which include Republicans and Democrats, are proposing amendments that would hurt APS financially.

“The sense I get after battling this since 2018 is that commissioners are trying to (provide) justice to the ratepayers. The good news is that although it appeared that justice was denied, hopefully, it was just delayed,” said consumer advocate Abhay Padgaonkar.

The hearings will determine APS’s Return on Equity, which is the profit margin that investors get for investing in the company. APS has requested an ROE of 10%.

Administrative Law Judge Sarah Harpring has provided a lower recommendation of 9.16%, and at least once commissioner is recommending 8.7%.

Every percentage point carries immense weight, equal to roughly $64 million in annual revenue requirements for the utility monopoly.

APS Customers Wanted For Feedback

Beginning at 9 a.m. Monday, intervenors and the public will have the opportunity to provide feedback about how they’ve been impacted by APS bills.

“APS customers can really influence the process,” said Dianne Brown, executive director of the nonprofit Arizona Public Interest Research Group.

Commissioners have filed 25 amendments that range from reducing the time-of-use period, reducing the authorized return on equity for APS, and denying certain expenses APS can recover from ratepayers, including employee bonuses.

For customers on time-of-use rates, current on-peak hours (which are more expensive) are from 3-8 p.m. One amendment would reduce the window down to 4-7 p.m.

“The amendments filed have the ability to really put more money into the pockets of Arizonans,” Brown said.

How to Participate

APS ratepayers who want to participate in the public comments hearing Monday morning should dial 1-866-705-2554. The passcode to speak is 241497#. The passcode to listen only is 2414978#. You can also watch the hearing live at azcc.gov/live.

Other recommendations by the judge

Judge Harpring’s recommendations also include ensuring there is a better education program in place before a customer would be placed on a demand rate.

Harpring also concluded that APS’s decision regarding the cost of installing pollution control technology at the Four Corners Power Plant was imprudent. The Commission could decide that ratepayers are not on the hook for the $400 million costs of installation.

RELATED: Report: APS failing to help customers understand electricity plans

RELATED: How much will Arizonans pay if state completely depends on renewable energy?

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