APS customers to see rate hike on bill, new rate starts on August 19

Posted at 2:47 PM, Aug 15, 2017
and last updated 2017-08-16 13:14:07-04

The Arizona Corporation Commission voted four to one on Tuesday to approve a rate hike for 1.2 million Arizona Public Service (APS) customers.

APS says a typical monthly bill would go up by about $6, which was the 4.5-percent hike approved by the board. 

Commissioner Bob Burns was the lone dissenting vote. 

Rates are set to go up August 19. It's the first base revenue increase for APS in five years, according to the company.

The utility is also doing away with its current rate structure. By May 2018 all customers will be on a Time of Use plan (TOU) or a Basic Plan. Customers of APS will be contacted by the power company in the fall to pick a new rate plan or APS will move you to the plan that is closest to the one you currently have. All new customers will have to try the TOU plan for 90 days before being allowed to choose a different plan. 

TOU Plans include:

-$13 Mandatory basic service charge

-Peak hours from 3 p.m. until 8 p.m. (M-F)

The peak hour charges will be determined by demand rates; that is the maximum amount of energy your home uses over a one hour period during the peak hours. There will be an option for two demand rates, however, the company tells me that the higher the demand rate, the lower the price per kWh.

Basic Service Plans include:

-No peak hours

-Mandatory basic service charges ranging from $10 to $20 depending on how many kWh your home uses.

Basic service charges are $10 for less than 600 kWh, $15 for less than 1000 kWh, and $20 for 1000 and above.

The agreement will also include the following, according to APS: 

  • "A $10 million to $15 million per year investment in an AZ Sun II rooftop solar program in which limited- and moderate-income customers would receive a monthly credit to allow APS to install rooftop solar systems on their homes;
  • A $15 million refund of surplus energy efficiency program funds to customers;
  • Increased program funding, annual crisis bill assistance and a simplified monthly bill discount for limited-income customers;
  • Grandfathering for existing private solar customers; and
  • Four new off-peak holidays, increasing the total number to 10."

APS also said, via a released statement, that the resolution of the rate review allows the power company to: 

  • "Invest significantly over the next three years in upgrades and maintenance for the energy grid;
  • Reduce emissions and water use through a $500 million investment to modernize the Ocotillo Power Plant;
  • Reduce emissions and comply with more stringent federal environmental standards through a $400 million investment at the Four Corners Power Plant; and
  • Fund the continued development of innovative technologies such as battery storage, microgrids and advanced solar research."

29 of 40 stakeholders signed off on the plan but some consumer groups say the settlement agreement is unfair to a lot of ratepayers. AARP and Arizona Public Interest Research Group (AZPIRG) both released statements expressing disappointment with the AZCC decision.

In a statement AZPIRG says, "A total of 226,000 APS customers will now experience a 73% or greater increase in their mandatory monthly basic service charge (148,000 ratepayers will pay a $15 monthly basic service charge & 78,000 ratepayers will pay a $20 monthly basic service charge (up from $8.67)). This means more money for APS, less money in the pockets of APS ratepayers."

In the explanation of his 'no' vote, Commissioner Burns question the need for the increase citing the salary of APS' CEO and possible political donations that the company may have made during the last election cycle. The Commissioner is currently suing the company for its donation records.

Solar customers have until August 31, 2017 to file an application to have their current rates grandfathered into the new plans.  According to the agreement, solar customer will maintain their current rates for 20 years past their connection date. For example, if your solar panels were connected 5 years ago, your rates will stay the same for the next 15 years. We are waiting to hear back from APS about specifics about the application process.