Regulators slash rates for Arizona’s largest power company
PHOENIX — State regulators on Tuesday voted to reduce the rates that Arizona Public Service can charge its customers.
The Arizona Corporation Commission approved a plan that will reduce APS base rates by about $119 million, according to a press release.
The changes will begin affecting bills in December, but the company says it will take months to fully implement them.
APS, the state’s largest electric utility, is prepared to sue and called the decision “shortsighted.”
“Our most important responsibility is to our customers, who depend on APS for the energy infrastructure that will power Arizona’s prosperity far into the future,” said a company statement released after the vote. “(Tuesday’s) short-sighted decision by the Arizona Corporation Commission ignores that crucial responsibility.”
The company warned the plan will increase consumer costs in the long run, saying it will raise the utility’s borrowing costs for future investments, including renewable energy projects, and the higher costs will ultimately be paid by customers.
The rare reduction reflects a significant change of fortunes for the politically influential utility, which had more than two years ago initially filed its rate application requesting a $184 million revenue increase.
APS in 2017 was granted a large rate hike that was billed as an average increase of 4.5% but amounted to a much larger spike for many of its customers.
Lea Marquez Peterson, the commission’s Republican chairwoman, said APS rates haven’t been reduced since 1996, “providing relief to captive customers that have struggled with multiple challenges with APS’ previous management and a global pandemic.”
She voted for the changes along with Republican Jim O’Connor and Democrat Anna Tovar.
Under retired CEO Don Brandt, APS spent lavishly on political contributions, including millions to elect its favored members of the Corporation Commission. Some of the spending was funneled through dark money political groups and wasn’t acknowledged by APS executives for years.
The new rate plan also reduces the number of “peak” hours when customers on some plans pay higher rates. The new hours will be 4 p.m. to 7 p.m. instead of 3 p.m. to 8 p.m.
The Associated Press contributed to this report.