Data centers would see larger rate increase than households under proposed APS hike

PHOENIX – A proposed Arizona Public Service rate hike for power includes a hefty increase for data centers, the utility company said.

“What’s really important is that the proactive part of this rate case is us actually managing things like data centers,” Anne Carlton, APS regulatory compliance manager, told KTAR News 92.3 FM’s Arizona’s Morning News on Monday.

APS submitted its latest rate hike proposal to the Arizona Corporation Commission (ACC) in June 2025, 16 months after the regulatory body approved an 8% increase that added about $10-$12 per month to the typical residential bill.

How much does APS want to increase rates on data centers?

The proposal calls for a hike of 14% on residential customers, which would increase the typical household’s bill by another $20 a month.

The rate increase would be even larger for data centers.

“One of the big proposals we have in this rate case is actually a 45% increase for their (data centers’) rates to make sure that they will continue to pay their fair share, even if they grow at the rate that we expect them to, which is very, very large,” Carlton said.

The ACC has scheduled a series of public comment hearings about the proposal. The next hearing is set for 6 to 8:30 p.m. Thursday and is telephonic only. It can be accessed by calling 877-309-3457 and using passcode 801972877.

There will be two more hearings on Feb. 18 and another on May 18.

If approved by state regulators, the new rates would go into effect during the second half of 2026.

Why does APS want to increase the price of electricity again?

The proposed APS rate hike is opposed by Arizona Attorney General Kris Mayes, who called it a “blatant” grab for profits.

Carlton said another increase is needed because the current rates are based on what APS paid for equipment in 2021 and 2022, while costs have soared in recent years.

“We’ve seen our equipment increases from 60 to 90% for things like transformers, which we have hundreds of thousands of,” she said. “It’s really important that we’re able to manage this rate case so that we can maintain a safe and reliable grid for people and keep the lights on during the summertime and through the winter.”

APS, which is owned by publicly traded Pinnacle West Capital Corp., provides electricity for about 1.4 million customers statewide. The utility company’s service area includes a portion of Phoenix along with Valley suburbs to the west and north.

Carlton said customers who are struggling to pay their bills can find information about company, state and local assistance programs at APS.com/assistance.

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