PHOENIX (AP) — About 1.4 million customers in Arizona will pay more for electricity after regulators approved a rate increase proposed by the state's largest utility, and an additional fee for customers with rooftop solar arrays is prompting more criticism.
The average monthly bill for residential customers of Arizona Public Service Co. will increase by about $10 to $12 starting in March, and customers with solar panels will face an additional $2.50 to $3 per month under changes passed by the Arizona Corporation Commission pay after an hours-long hearing on Thursday.
A few dozen people spoke at the meeting and more than 2,000 people submitted written comments in the months leading up to the decision.
Commission Chairman Jim O'Connor told reporters Friday that he and three Republican colleagues approved the new rate plan without knowing the exact impact it would have on customers, saying it was expected to be “in the order of magnitude.” of around 8%. O'Connor argued that the margin of error was too small to delay the vote for another day.
The Arizona Public Interest Research Group Education Fund is asking the commission to reconsider the approval and require utility executives to appear before the commission and explain under oath the precise expected impact of the rate increase on all classes of customers.
“Comprehensive data should be entered into the record and APS leaders should be sworn in before they speak,” Diane Brown wrote in her appeal for the nonprofit group. “The Commission failed to ask the necessary questions to ensure it had adequate and complete data before voting on the entire tariff plan.”
The parties in the collective bargaining dispute, which began almost two years ago, include unions, citizens' groups, renewable energy advocates and public schools.
Utility officials said the rate increase is necessary to ensure reliable and resilient service for customers living in 11 of the state's 15 counties. The increase is intended to help the energy supplier recoup the expenses incurred in expanding the infrastructure in previous years.
The increase gives the utility a return on equity of 9.55%, the Arizona Republic reported. APS President Ted Geisler has argued that a return of at least that level is needed to appease creditors and lenders on which APS relies as the utility's creditworthiness and profitability have faltered.
“We need immediate and sufficient tariff relief,” said Geisler. “We must continue to rely on lenders to finance the necessary network investments.”
Commissioner Anna Tovar, a Democrat, cast the lone dissenting vote. She said she couldn't “support something that costs customers more.”
Commissioner Lea Marquez-Peterson also expressed concerns but voted in favor of the rate plan, saying it was critical for APS to be able to make infrastructure investments.
Michael O'Donnell, vice president at Sunsolar Solutions in Peoria, wrote in a statement to The Republic that it was “truly outrageous” that the commission would enact a new fee that would only target solar customers and not the utility or any other party in the case had requested it.
He said customers with solar panels pay an average of about $80 a month to connect to the grid. He estimated that after the price increase, the same customer might end up paying $120 a month for the same service.
The utility said solar customers do not pay the full cost of the services provided to them because those costs are overwhelmingly concentrated in transmission lines, power plants and other infrastructure rather than the actual energy produced. An even higher solar surcharge was approved by a previous commission less than a decade ago, but was revoked in 2021.
The rate structure approved this week will have different impacts on different customer groups, such as schools and small businesses. The Commission has asked the utility to provide a written updated analysis and the Commission's own staff is working to finalize the data.
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