PHOENIX — A judge recommended that APS be able to earn 9.55% profit in its latest rate hike – lower than the utility wanted, but still higher than the state’s consumer watchdog recommended.
Administrative Judge Sarah Harpring is overseeing the APS rate case, a legal proceeding to determine the fair value of the company and new rate schedules for customers. Harpring recommended a Return on Equity, or profit margin, of 9.55% for the utility. That recommendation is lower than APS’s request of 10.25% but is more than a percentage point higher than the recommended ROE of 8.2% by the state consumer agency, RUCO.
Each fraction of a percent means the difference in tens of millions of dollars of allowed profit margin for the utility.
The Arizona Corporation Commission is slated to consider the APS rate request in an open meeting on Feb. 22.
As 12News has reported, APS says its proposed rate increase is necessary in order to ensure reliable and resilient energy service to its estimated 1.4 million customers in Arizona. Parties in the case include labor unions, citizens groups, renewable energy advocates, and public schools.
APS’s proposal impacts customers differently.
For example, the company proposes small businesses and schools pay a higher rate increase than large companies.
APS customers paid an average of 12% more per kWh in the summer of 2023 compared to the previous summer, according to federal records filed by APS.
That increase is the result of commission votes last year to aggressively reimburse the utility for higher fuel costs in the wake of the pandemic and to settle an ongoing court dispute.
The current commission, made up of four Republicans and one Democrat, made six major decisions last year involving rates and energy policies impacting Arizona’s largest electric utilities and their captive customers. RUCO generally opposed all six of those decisions.
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