PHOENIX — Arizona utility regulators passed a plan Thursday night that raises the allowed profit margin of Arizona’s largest utility. APS, a regulated monopoly, received authorization to earn a profit margin as high as 9.55%, up from 8.9%.
But customer advocates say the actual impact on bills is not known.
An attorney for the utility said the average bill impact would be a hike of 8.3%. However, stakeholders involved in the negotiations said that is likely not accurate.
“The bottom line is nobody can really say what the average impact to bills per month is, which is obviously pretty disturbing,” said Diane Brown of Arizona PIRG, a consumer advocate nonprofit. “It is unclear what adjustors are included in that final estimate that will also impact a customer’s bill.”
A proposal issued by Administrative Law Judge Sarah Harpring that served as a blueprint for Thursday’s hearing projected the impact on monthly bills would be 15.5%. APS attorney Melissa Krueger told commissioners just before the final vote Thursday night the impact would be 8.3%.
Moments later, Commissioner Ana Tovar cast a “no” vote while adding she wasn’t clear on the actual bill impact.
“I’m still unsure if that even includes the adjustors as well, so stay tuned because that might be a bit different than what was just quoted,” Tovar said.
Late Thursday, a spokesperson for APS said the “net impact” on the average customer bill will be “roughly 8%.”
Brown said PIRG will ask the Commission Friday to request clarification from commissioners.
“The Commission should vote to reconsider and ensure data is placed in the docket that provides clear explanation of projected increases by customer class and that it can be scrutinized,” Brown said.
Commissioners also voted to approve Harpring’s recommendation for an average $2.50 “grid access” surcharge to rooftop solar customers.
Solar advocates accused Harpring of due process violations and discrimination against residential solar.
“Some may believe the charge is warranted, others may believe it is not warranted, but I hope you all believe in due process,” said Court Rich, an attorney representing the solar industry.
Harpring defended the charge, saying it’s rooted in the commission decision passed in 2014 and is justified by “cost of service” studies conducted by Commission Staff and APS.
Commissioners also approved an amendment by Commissioner Nick Myers (R) to halt new sign-ups for a “solar communities” program operated by APS, targeted towards low-income residents. Myers has made it a priority to eliminate programs using customer funds to advance renewable energy.
The Commission also approved an “adjustor fee” that will likely result in higher rates in the future outside of a traditional rate case. The adjustor gives APS flexibility to seek new energy sources, including fossil fuels. Consumer advocates called the program a “blank check” that lacks transparency.
Tovar asked APS CEO Ted Geisler if he would commit to terminating the adjustor if it proves not to save customers money.
“We’ve tried to carefully design this so there are plenty of protections in place. It will save customers money,“ Geisler said.
Tovar again asked Geisler to agree to terminate the adjustor if there aren’t proven savings.
Geisler did not agree.
“I would say I’m vastly disappointed. Put your money where your mouth is and commit to getting rid of this adjustor if it proves to cost customers more money,” Tovar said.
Commissioners also voted 4-1 (Tovar dissented) to prohibit shareholder funds from assisting coal-impacted communities.
“My recommendation is not based on the belief that coal-impacted communities don’t need assistance,” Harpring said.
An amendment by Commissioner Kevin Thompson was passed 5-0 that prohibits APS from using ratepayer revenue for public image marketing and advertising.
"I'm frustrated after reviewing advertising examples that appeared more to be promotional pieces than educational,” Thompson said.
Up to Speed
Catch up on the latest news and stories on the 12News YouTube channel. Subscribe today.