APS electricity bills going up as rate increase is approved

Ryan Randazzo
The Republic |
The Arizona Corporation Commission on Tuesday approved a $6-a-month rate hike for Arizona Public Service Co. customers.

State utility regulators voted Tuesday for Arizona Public Service Co. to increase the average household bill by $6 a month starting Saturday.

The rate hike includes increases in the basic service charge for some customers on simple rate plans and a change in the on-peak hours for time-of-use customers.

By a 4-1 vote, commissioners approved a settlement deal that APS reached with the commission staff, Residential Utility Consumer Office, the state department created to intervene in such cases on behalf of utility customers, and several other parties. An administrative-law judge also approved the terms after a procedural review.


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"A number of things we covered today are so crucial to the quality of life for individuals that are customers for this company," Chairman Tom Forese said.

He mentioned specific elements, such as $1.25 million annually in crisis-bill assistance for low-income customers, that will benefit ratepayers.

Commissioner Robert Burns was the no vote among the five elected Arizona Corporation Commission members. He said the initial assessments from commission staff and RUCO indicated APS did not need an increase. The application was filed in June 2016.

"There is a question mark of whether a rate increase is necessary," Burns said.

He mentioned Salt River Project, a public utility in central Arizona close in size to APS, and its lower rates.

"The CEO of APS makes about $1 million a month," Burns said. "SRP, running a company of almost equal size, the CEO makes about $1 million a year."

The rate changes will be implemented in multiple steps.

The higher rates will go into effect Aug. 19. The average residential bill will increase from $135.54  a month to $141.70, APS said.  

 New customers will only be able to select from the new rate schedules.  

Time-of-use rate plans, which charge higher rates for on-peak usage, will change from noon to 7 p.m. to 3 p.m. to 8 p.m. during summer.

Existing customers who do not voluntarily change rate plans will be transitioned starting next year and all should be on new plans by May, officials said. They still will have a basic rate plan available to them.

Deadline for solar

Aug. 31 will be the last day for customers to apply to connect a residential solar array to the APS system and receive full net metering, which gives a full retail credit for each kilowatt-hour of surplus power sent to the grid. After that, solar customers will be credited based on a new formula. The initial credit will be 12.9 cents per kilowatt-hour.

The changes will result in lower monthly savings for customers who install solar, but solar advocacy groups approved of the settlement.

"Arizona’s families and businesses should be able to meet their own energy needs with the state’s plentiful sunshine if they so choose,” said Briana Kobor, regulatory director with Vote Solar, a non-profit solar organization.

The basic-service charge for residential customers today is about $8 a month, and under the settlement it will increase to $10 for "extra-small" households, $15 for basic-rate plan customers and $20 for large homes.

Customers on a time-of-use rate plan or demand-rate plan will see a reduction in their basic-service charge from $17 a month today to $13 a month.

Demand rates base a large portion of the monthly bill on the highest one hour of use during a peak hour in the month. Most businesses are on demand rates.

APS officials said the service fees are intended to encourage customers to select plans that allow them to save money by conserving energy during peak-demand hours.

AARP and the Southwest Energy Efficiency Project conservation group opposed the service-fee and time-of-use hour changes.

Commissioner Boyd Dunn offered a proposal to mitigate the basic service-fee increase on some customers, but it failed after debate, including with RUCO.

"This basic service charge was an issue that was hotly debated," RUCO Assistant Director Jordy Fuentes said. "We went round and round and round on this issue."

Commissioner Doug Little said it was important that RUCO was supportive of the service-charge increases because it represented a compromise.

"They think this is the best thing for consumers generally," Little said.

Steve Jennings, an associate state director for AARP, said they would be difficult for seniors to mitigate and were troubling because they reflect a larger trend at utilities nationwide. 

"Other utilities across the country are watching and we are going to have to fight this in other states," Jennings said.

The commissioners passed several additional requirements to the rate case not addressed in the settlement, including:

  • An amendment from Commissioner Andy Tobin requiring APS to consider battery storage whenever it is making major new investments in the power grid.
  • An amendment from Tobin requiring APS to develop a plan to help water utilities conserve water and electricity and minimize peak demand.
  • An amendment from Dunn ordering APS to investigate increased use of biomass power generated by burning trees thinned from Arizona forests.


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