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Commissioners want review of APS 2018 bills, education efforts

Arizona Corporation Commissioners Boyd Dunn and Bob Burns wrote in the request for the review that APS may be “overearning, i.e., earning more than was authorized."

Two Arizona regulators are casting fresh doubt on whether the state’s largest power company, APS, is playing fair with customers.  

Last week, Arizona Corporation Commissioners Boyd Dunn and Bob Burns filed a request for Corporation Commission staff members to review APS power bills of the entire year of 2018.

According to the letter, the commissioners write that APS may be “overearning” profits.

“We believe there may be the possibility that APS is overearning, i.e., earning more than was authorized,” the letter states.

The letter requests Corporation Commission staff to “perform a rate review of APS, using calendar year 2018 as a test year…”  and to “investigate APS’s customer education and outreach program.”

A spokesperson for APS says they stand by the integrity of the process and how the power company implemented rate changes. 

The company used “robust customer education and outreach over many months using a variety of formats and channels,” said Jill Hanks, APS communications consultant.

As part of its agreement with regulators, APS agreed to spend $5 million on education and outreach to make sure customers knew how they could save the most money with the right plan tailored to their electricity needs.

The letter from Burns and Dunn cites “a substantial number of complaints and comments stating that the rate increase was much more than anticipated” and that “there is a strong possibility that APS’s customer education program and outreach did not accomplish the intended goal.”

Last year a group of citizens launched a petition drive that triggered a hearing to determine whether APS’s rate hike on customers approved in 2017 should be re-opened. 

A judge is expected to issue her recommendation any day.

Commissioner Bob Burns tells 12 News this latest request is meant to enhance that case before commissioners decide whether the 2017 rate hike should be reviewed and potentially revoked.

RELATED: APS customers accuse utility company of 'unjust' practices

When the rate hike was approved in 2017, APS told the commission the typical residential customer would see their bill rise 4.5 percent or about $6 per month.

In October, 12 News asked several questions by email to APS about its education efforts.

Here is the October 2018 Q & A with APS Communications Consultant Jill Hanks (Over several years, two reporters for 12 News have made repeated requests to interview APS CEO Don Brandt. Brandt has declined all interviews).

Question: How was the $5,000,000 set aside by APS for customer education actually spent?

Answer: During the transition to new service plans, APS undertook a robust customer education and outreach effort over many months and using a variety of formats and channels, including email, direct mail, our customer newsletter, bill communications, aps.com, social media, video, outgoing advertising, community presentations and customer consultations at public events. A detailed description of how we allocated the budget for customer outreach and education will be filed later in October as part of an active hearing at the Commission. The hearing transcripts published yesterday include discussion of our customer outreach efforts. In addition, we will be responding to Commissioner Dunn’s request.

Question: Given that APS’s attorney acknowledged that changes to the rate plans and time-of-use were complex, and "not well understood by many," then is it possible that APS implemented the higher rates too soon?

Answer: Over many months we reached out to customers to make them aware of the changes and encouraged them to make an informed choice from the different service plan options available. Transitioning customers onto new plans by May 1, 2018 was negotiated as part of the 2016 Rate Review which was agreed to by 29 parties and approved by the Arizona Corporation Commission in August 2017. Our communications efforts were planned and completed to meet that timeline, and continue today when it comes to helping customers be on the right plan for their needs and get the most out of that plan.

Question: Given the prominent and visible marketing on billboards and TV commercials by APS touting its image, is it fair criticism to suggest that perhaps APS should be spending more resources educating the public about rate hikes and time-of-use, and fewer resources promoting a positive PR image that has no real value to the public?

Answer: On the contrary, we believe it’s essential for us to communicate with our customers openly and frequently about the actions we take to make sure we can serve them with clean, reliable energy now and in the future, and provide them with service plan options and assistance programs. The cost of these ads is not included in customer rates, and it is not part of the $5 million budget we invested in customer outreach and education specific to changes from our rate review approved more than a year ago.