News Summary
Arizona Public Service (APS) and Salt River Project (SRP) have proposed rate increases that may significantly affect residential customers. APS aims for a formal rate adjustment due to rising costs, while SRP seeks to raise revenue by $168.8 million. Public meetings are scheduled for community feedback ahead of final votes. Additionally, Southwest Gas is also increasing rates following an approved adjustment by the Arizona Corporation Commission, affecting many residents across the state. Customers should prepare for upcoming changes in their utility bills.
Phoenix, Arizona — Arizona Public Service (APS) and Salt River Project (SRP) have announced plans to raise rates, which could significantly impact residential customers in the Phoenix area. APS recently filed paperwork indicating their intention to pursue a formal rate increase in June, just a year after the Arizona Corporation Commission approved an 8 percent hike in average residential bills.
Details of the proposed APS rate increase have not yet been disclosed, but the utility attributes the need for a new rate adjustment to various rising costs, including inflation, high-interest rates, and challenges within the supply chain. If approved, the new rates for APS customers would take effect no earlier than July 8, 2026.
Community watchdog groups have voiced their concerns regarding the potential rate increases from both APS and SRP, urging regulators to closely evaluate the implications for consumers. Last year, the Arizona Corporation Commission implemented a novel method for calculating utility rates, which allows utilities to apply for annual rate increases. This change replaces a previous system that required utilities to base rates on the prior year’s expenses and could take years to see implemented.
Commissioner Nick Myers, who supported this change, noted that it promotes more gradual rates, reducing the likelihood of drastic increases every few years. However, this has also led to fears among consumers about the potential for continuous rate hikes.
Regarding SRP, the board recently approved a proposal for a rate increase aimed at generating $168.8 million in revenue. The proposal was made public on December 2, 2024, and could lead to an increase of approximately $5.14 in monthly bills for the average residential customer using 1,117 kilowatt-hours. This increase is directed towards funding necessary upgrades to the power system and addressing a forecasted decline of $67.7 million in revenues from fuel and purchased power.
If the SRP proposal receives the necessary approvals, the average customer might see a 3.5% increase in their bills, translating to about $5.64 more each month starting in November 2025. SRP’s General Manager and CEO stressed the importance of these upgrades to maintain service reliability and enhance the overall customer experience.
It is noteworthy that SRP operates as a self-governing entity and is not regulated by the Arizona Corporation Commission, giving it a unique position among utilities in the state. Additionally, public meetings will be held where customers can express their feedback on the proposed rate increases ahead of a final vote by the SRP Board of Directors scheduled for February 27, 2025. The decisions made will directly impact customers beginning with the November 2025 billing cycle.
In a related development, Southwest Gas customers will also face an increase in their monthly bills following a rate adjustment approved by the Arizona Corporation Commission on March 27. Although Southwest Gas originally sought a revenue increase of $126 million, the commission settled on a reduced amount of $80 million. Consequently, the average single-family customer’s gas bill is expected to rise from around $47 to approximately $51 per month.
The commission has established a new Gas Cost Balancing Account rate, which will offer a credit of $1.87 for average residential customers. Southwest Gas currently serves approximately 1.2 million customers throughout Arizona, making this rate adjustment relevant to a significant portion of the state’s residents.
As these planned rate increases unfold, residents of the Phoenix area should prepare for potential adjustments in their utility bills, while also engaging in the public forums provided for feedback and concerns regarding these changes.
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