Commission Approves APS Rate Hike Spelling Higher Bills for Ratepayers

PHOENIX, AZ – Today in a 4 to 1 vote, the Arizona Corporation Commission (ACC) approved Arizona Public Service's (APS) proposal to raise its rates and burden ratepayers with higher electricity bills, enabling APS to double down on coal and gas. The rate increase will bolster APS shareholder profits while prolonging operation of the utility’s outdated Four Corners Generating Station despite cheaper clean energy alternatives. Commissioner Tovar was the sole dissenting vote.

A substantial portion of APS’s rate increase is due to the Company’s spending on high-cost, dirty fossil fuels, including its outdated coal-fired power plants. Both the Four Corners Generating Station and Cholla Power Plant are uneconomical to keep running, and APS ratepayers have already been forced to pay hundreds of millions of dollars on the operation and maintenance of those plants even though much cheaper clean energy alternatives are available. 

The evidence in this rate case and APS’s own analysis demonstrates that the utility could save ratepayers money by retiring the Four Corners plant before 2031 and transitioning to renewable resources like solar and battery storage. Specifically, APS’s own 2023 Integrated Resource Plan finds that the Company could save $139 million if it retired Four Corners in 2028 instead of retiring the plant in 2031 as planned.

The ACC also rejected APS’s proposal for Coal Community Transition (CCT) funding that would have provided urgently-needed financial support for communities impacted by the closures of coal-fired power plants. APS had proposed over $100 million in funding that would have been distributed over nine years to support economic transition for coal-impacted communities, including for the Navajo Nation, Hopi Tribe, and areas around Joseph City where the Cholla Power Plant is located. The Commission’s vote provides no help to these communities in facing this urgent challenge.

The Commission also approved APS’s proposal for the System Reliability Benefit (SRB) mechanism, which will allow APS to charge ratepayers for tens of millions of dollars in spending on large new fossil fuel generation projects between rate cases without adequate scrutiny or stakeholder input. The ACC’s determination is the latest in a series of decisions that have gone against consumers' best interests.

In addition, in a last-minute, surprise move, the Commission imposed a new charge on rooftop solar customers that would force those customers to pay more. That charge was not proposed by APS and was never discussed during the Commission hearings on APS’s proposals in this case.

In summary, the Commission approved a rate increase without even knowing what the real rate increase will be – not even APS could say for sure – and has allowed APS to keep ratepayers on the hook for its imprudent business decisions, continuing to act in opposition to renewable energy and to the best interest of ratepayers. To make matters worse, the Commission did not allow all members of the public to make their voice heard at the Commission meeting on APS’s rate increase, cutting short and turning away many members of the public who had requested to speak and who had been waiting for hours to voice their concerns.

“Unfortunately, what we’re witnessing is just how out-of-touch the ACC is with utility ratepayers, the public, and our communities,” said Sandy Bahr, Director of the Sierra Club’s Grand Canyon Chapter. “To enable APS to raise its rates to prolong the livelihood of obsolete expensive and dirty power plants, impose charges on solar customers, and deny Coal Community Transition funding for coal-impacted communities goes directly against the best interests of ratepayers, our air, our water, and our communities, and ignores affordable transition planning that is urgently needed.”

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