About 1.4 Million Arizonans to Face Higher Electricity Rates
Regulators Approve Rate Hike Amid Controversial Rooftop Solar Fee Increase
PHOENIX (AP) — The Arizona Corporation Commission, after an hourslong hearing, has given the green light to a proposed rate hike by Arizona Public Service Co. (APS), the state’s largest utility. The decision, however, has drawn criticism due to an added fee for customers with rooftop solar systems.
Increased Costs for Arizona Public Service Co. Customers
Starting in March, Arizona Public Service Co. residential customers can expect an average monthly bill increase of about $10 to $12. Furthermore, customers with solar panels will face an additional $2.50 to $3 per month under the newly adopted changes.
Commission Chair Jim O’Connor, along with three Republican colleagues, approved the rate hike without having exact figures on the customers’ projected impact, reasoning that the estimated 8% rate increase fell within an acceptable range. However, critics argue that the commission failed to acquire the necessary comprehensive data.
Unsatisfied with the approval, the Arizona Public Interest Research Group Education Fund has called for the commission to reconsider and demand utility executives provide precise projections of the rate hike’s impact. The nonprofit group insists that comprehensive data and sworn testimony from APS executives were necessary before voting.
Varied Parties, Two Years, and Countless Arguments
The rate case, which has spanned nearly two years, incorporates parties from labor unions, citizens groups, renewable energy advocates, and public schools. The multiple perspectives and arguments regarding the rate hike have made for a protracted and contentious process.
While APS officials argue that the rate increase is necessary to maintain reliable service in most Arizona counties, critics maintain that the rate hike serves partly to recoup the utility’s prior infrastructure expansion expenses.
The newly approved rate plan aims to provide APS with a return on equity of 9.55%, ensuring the utility’s credit rating and profitability amidst recent uncertainties. APS President Ted Geisler stresses the importance of sufficient rate relief and continued lender funding for infrastructure investments.
The Dissent and Outrage Over Solar Customer Charges
Commissioner Anna Tovar, the sole dissenting vote, states her refusal to support anything that burdened customers with increased costs. However, Commissioner Lea Marquez-Peterson ultimately voted in favor, stressing the importance of facilitating APS’s infrastructure development.
The commission’s decision to implement an additional charge solely for solar customers has triggered outrage. Michael O’Donnell, a vice president at Sunsolar Solutions, voiced his discontent, highlighting that the charge was implemented without any prior request from the utility or involved parties. He argues that with the new rate hike, solar customers who are already paying an average of $80 per month for grid connectivity might expect a staggering $120 monthly bill.
APS justifies this solar surcharge by stating that solar customers do not directly cover the full costs of service provided, with the charge primarily targeting infrastructure expenses such as transmission lines and generating stations. Notably, a larger surcharge was previously rescinded in 2021.
The specific impact of the rate structure on various customer classes, such as schools and small businesses, remains to be seen. The commission has requested additional analysis and data from the utility to assess these effects.
