Attorney General Kris Mayes links ‘outrageous’ 14% APS rate hike request to data centers

With APS seeking a 14% residential rate increase — roughly $20 more per month — and the public comments now concluded, Arizona Attorney General Kris Mayes has pointed to data centers as a key factor driving the utility’s request.

“The vast majority of Arizonans do not believe that they should be subsidizing the cost of building data centers for a whole bunch of out-of-state billionaires,” she told KTAR News 92.3 FM’s Outspoken with Bruce & Gaydos on Thursday. “That is what is going on with these rate increase proposals by both APS and Tucson Electric Power Company down in Tucson. It is.”

APS is currently more than halfway through its eight-part rate adjustment process, which started when it submitted the rate hike proposal in June 2025. It was just 16 months after the ACC approved an 8% increase that added about $10-$12 per month to the typical residential bill.

Mayes called the back-to-back rate hikes “outrageous.”

“I’m the first attorney general to ever formally oppose and intervene against a utility rate case, but I thought it was necessary,” Mayes said. “Yes, it’s extraordinary, but so is what APS is trying to do to the people of Arizona.”

Why APS says it needs to increase utility costs

The utility company has argued another increase is necessary because current rates don’t cover the rising costs of building new infrastructure while maintaining grid reliability.

However, Mayes — who was granted official intervention status in the case — says the public needs to look at why the expansion is needed.

“Let’s ask ourselves why they need all that new infrastructure and more power plants,” Mayes said. “It’s because we have so many data centers coming into the state of Arizona.”

What is Kris Mayes doing to combat proposed 14% rate hike?

Mayes raised another major concern: utilities are pushing for “formula rates.”

This mechanism would allow them to automatically increase rates each year without the traditional oversight of the ACC, which typically reviews rate cases using a “historical test year” to evaluate actual, past spending before granting increases, she said.

“So they want 14% now, and then they’re also looking for these formulaic rate increases later,” Mayes explained. “It’s really — honestly, guys, it’s gross.”

She said she hired an expert to testify that 14% is too much and that a 3% rate increase is enough to cover costs and make sure APS can still attract capital.

However, Mayes added that APS’ ability to attract investors isn’t her top priority, especially since the company already makes $600 million a year.

“They’re also making the perennial claim — they constantly do this — that if they don’t get exactly what they want, their credit rating will go down,” Mayes said. “It’s sort of a ‘sky is falling’ argument that the utilities always make. … They try to terrify these commissioners into believing that if they don’t give them everything that the utilities want that their credit ratings are going to decline.

“That’s not going to happen with a utility that’s already making $600 million a year and in a state like Arizona that is still growing tremendously.”

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