Arizona AG Fights Proposed 14% Rate Hike by APS

News Summary

Arizona Attorney General Kris Mayes opposes a proposed 14% rate hike by Arizona Public Service (APS), which would raise monthly bills for residents. Mayes argues this increase burdens families during rising inflation, labeling it a corporate profit scheme. APS, seeking funds for grid reliability improvements, has faced prior rate increases. Consumer advocates warn of long-term impacts and a push for higher bills. The ruling from regulators is expected in over a year, amid rising tensions between utilities and consumers grappling with financial pressures.

Arizona Attorney General Kris Mayes has expressed strong opposition to a proposed 14% rate hike filed by Arizona Public Service (APS), the state’s largest electric provider. If approved by state regulators, this increase will add approximately $20 to the monthly bills of typical residential customers starting in the second half of 2026.

Mayes has labeled the rate hike as a “blatant” attempt to boost corporate profits at the expense of Arizona residents. He has committed to fighting against the increase, emphasizing the burden it places on families already grappling with inflation and rising living costs. This proposed rate hike comes on the heels of previous increases, including 4.5% in 2017, 8% in 2023, and another 8% that took effect last year. These past adjustments have led to an average residential customer paying approximately $12 more per month compared to the previous year.

APS currently serves around 1.4 million customers in Arizona, particularly in Phoenix and its suburbs. APS CEO Ted Geisler has stated that the proposed rate increase is essential to cover investments in grid reliability and operational expenses, which have not aligned with current costs. The utility company argues that the new rates are crucial for supporting necessary upgrades to infrastructure and enhancing measures for weather resilience.

Consumer advocates are sounding alarms over the potential long-term impact of the proposed formula rates, suggesting they could lead to higher bills for utility customers over time. The proposed rate structure aims for a return on equity of 10.7%, a significant increase from the current 9.55%. Additionally, APS plans to implement annual price adjustments and modify rate designs specifically for large energy users, such as data centers, which demand substantial power resources.

In the aftermath of setting a new energy demand record during last summer’s peak usage, APS’s need for a dependable energy grid is becoming increasingly apparent. The focus on improvements in capacity is vital as the region experiences rising temperatures and rapid growth. City regulators previously approved a rate-setting change that allowed for more frequent adjustments, though this has raised concerns regarding transparency and operating efficiency.

The process moving forward will include hearings and public comment sessions that are scheduled to be overseen by a judge. A ruling from the Arizona Corporation Commission (ACC) is expected to take over a year to finalize. Meanwhile, APS is seeking to introduce new charges for high-energy consumers and also plans to increase fees for residential solar customers to mitigate cross-subsidization across customer categories.

As the situation unfolds, the conflict over the proposed rate increase underscores a growing tension between utilities and consumers, particularly as households continue to face financial challenges amidst an evolving economic landscape.

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