Most Arizona Public Service Co. customers will see a slight decrease in bills after regulators put a final vote on the electricity company’s tariffs.
Utilities regulators approved a roughly $ 119 million APS revenue cut late Tuesday after reviewing data confirming most customers would cut their monthly bills.
APS said shortly after the decision it would sue the issue, as its CEO said, if the final cuts were too severe, the company would.
Arizona Corporation commissioners decided key elements of the two-year tariff during several meetings in October.
The commissioners changed the originally requested 5% rate hike and even an administrative judge’s recommendation so significantly that it took a few days to calculate what the changes would mean for customers.
“APS has not seen its price drop since 1996, and today we voted in our amendments to lower approximately $ 119 million in sales to the base tariff, which corporate customers faced with multiple challenges with the previous management of APS and a global one Pandemic struggled will be relieved, “said Republican Chairman Lea Márquez Peterson.
Commissioners Anna Tovar, a Democrat, and Jim O’Connor, a Republican, also voted in favor of the rate hike.
After all of the changes, which include funding to help communities affected by the coal-fired power plant shutdown, APS will see a slight increase in revenue, largely due to regulators serving customers certain items such as power plant fuel and renewable energy programs invoice. Its “base rate” drops by $ 119 million.
APS said the cuts were “short-sighted”.
“Our main responsibility is to our customers who rely on APS for the energy infrastructure that will bring Arizona’s prosperity far into the future,” the company said in a prepared statement following the vote.
“Today’s short-sighted decision by the Arizona Corporation Commission ignores that critical responsibility. While customers will see some short-term benefits, the overall bottom line will increase costs to customers in the long run and jeopardize the economic future of our state – other choice than legal action. “
How the decision will affect APS customers
The decision included significant cuts, including a vote to prevent APS from charging its customers the $ 216 million it spent on upgrades at the Four Corners Power Plant near Farmington, New Mexico, which is now should be closed earlier than previously planned.
The changes last week were too big to calculate in a snap, but after calculating the numbers, APS said about 69% of customers would see a bill cut of 2% or less. These include lowering property tax rates and increasing the tax rate “adjusters” for items such as power plant fuel.
Approximately 21% of customers will see less than a 1% increase, and an unfortunate 7% are likely to expect a 1% to 3% increase in the bill.
The differences are due to the fact that customers have different tariffs and how and when they use electricity.
The changes regulators have made to GSP revenue will start affecting bills from December, but the company said it would take several months to adjust the new peak hours on power plans with in-use time.
The “peak times” for electricity tariffs with usage time will finally be postponed to 4:00 p.m. to 7:00 p.m. Today, these tariff plans use peak hours from 3pm to 8pm. APS said it could take 10 months for the change to be implemented.
“This case has been a long time coming for APS customers,” said Tovar.
Republican Justin Olson said GSP rates are something he has heard complaints about since joining the commission in 2017, and he took credit for the change that changed the GSP’s allowable return on equity from 10% to 8.7% reduced.
However, Olson also said certain elements of the final plan were problematic, including contributions the company is expected to make to communities affected by the coal-fired power plant closures.
Because of this, he voted against the final arrangement.
The Democrat Sandra Kennedy also voted against the final decision and referred to the slight overall increase in GSP income after taking tariff adjustments into account.
“I cannot in good conscience vote in favor of this rate hike,” Kennedy said, adding that part of their opposition resulted from the decision not to consider the massive investment in New Mexico’s coal-fired power plant in a separate decision.
Positive reaction from the consumer group
AARP said it was “thrilled” with the commissioners’ final ruling, in part because the organization, which represents people over 50, was one of the few parties that failed to agree to a deal in the controversial APS price drop in 2017.
“With today’s decision, AARP has confirmed our decision and is pleased to know that we will always fight for the 50 plus then and now,” said State Director Dana Kennedy in a prepared statement.
In addition to reducing the base tariff and changing usage time, AARP praised the fact that the base charges for most tariffs will not increase and that APS will introduce more understandable tariffs.
AARP was also pleased that it rejected a proposal from Olson that would have allowed new energy companies to compete with APS for customers. AARP said the proposal failed “because of the evidence that it only harms consumers without lowering the price”.
APS submitted an analysis of the case file detailing how different customers with different tariffs would be affected by the changes. This is something that the commissioners specifically requested after the 2017 rate hike, which, without such details, was approved by the commissioners who voted for it.
It wasn’t until activist Stacey Champion formally challenged that rate hike that the 2017 rate hike was found to be very inconsistent, with some clients seeing huge rate hikes while others saw only a minor change.
In this case from 2017, APS described the average increase compared to the supervisory authorities with 4.5%. The company also said 102,000 residential customers are expected to cut their bills by 3.7%. But during Champion’s lawsuit, APS announced that more than 300,000 customers were expected to have bills increased by 10.8% or more.
Reach out to reporter Ryan Randazzo at ryan.randazzo@ arizonarepublic.com or 602-444-4331. Follow him on Twitter @UtilityReporter.
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