APS rate hike: Customers protest 14% electricity cost increase proposal

PHOENIX - The room was packed Monday with a line out the door and an overflow room filled with people testifying. It was just day one though, and there is a lot to go before it is known what rates will be set at.

What they're saying:

Juan Luna is one of the many who spoke during the May 18 hearing.

"I know what it's like to live paycheck to paycheck," Luna said. The youth soccer coach says everyone is feeling the cost of electricity.

"The families I coach are low-income families, and they tell me they're struggling," Luna said.

‘Shame on you’

At the first day of a weeks-long hearing at the Arizona Corporation Commission (ACC), Arizonans spoke about an APS proposal. The for-profit utility has asked the commission to raise rates on customers by 14% and on certain businesses like data centers by 45%.

"Absolutely ridiculous, it's crazy, it makes no sense," one commenter said. Another commenter noted, "No one has a choice who they buy their electricity from."

"Shame on you, I will be voting you out," a separate resident stated.

Dig deeper:

In the weeks ahead, these hearings will include more than 30 third-parties, like the Arizona Attorney General, who will testify. The judge, Charles Hains, will weigh the evidence and determine what a reasonable rate is, and give that information to the commission.

"The ACC members just rubber stamp everything because that relationship that they have with the utilities is beneficial to them," Ylenia Aguilar of the Sierra Club said.

When asked if that is true, Arizona Corporation Commission Chairman Nick Myers pushed back.

"Utilities come in and ask for whatever they want all the time. Doesn't mean they'll get it. In fact, I've never seen a rate case where a utility came in and got everything they asked for. It just doesn't happen," Myers said.

The other side:

FOX 10 received a statement from APS justifying the increase, which stated, "… over the past five years, APS has experienced rapidly rising costs of equipment needed to deliver power to customers. One example is transformer costs which are, on average, 49–90% higher now than when our rates were last set."

A lot is at stake in the months ahead.

"We do the best to juggle what we can and make sure these rates are just and reasonable and at the same time as affordable as we can possibly make it for the customers," Myers said.

'… based on costs from five years ago'

APS states on its website, "Current APS rates are based on costs from five years ago. Inflation and rising expenses mean those rates no longer cover what it takes to operate and strengthen the electric grid today. By updating rates to reflect current costs, APS can continue to provide customers with the top-tier reliability they need and expect, especially during Arizona’s long, hot summers. As a regulated utility, APS must look backward to adjust its rates based on the actual costs it paid to serve customers in 2024 and 2025. This ensures rates more accurately match the true costs of providing electric service to customers. For context, over the past five years, APS has experienced rapidly rising costs of equipment needed to deliver power to customers …"

What's next:

Next up, it's anticipated the judge will wrap up testimonies by the end of June and then make a recommendation to the commission. Then they have to weigh the decision and vote on it.

The earliest a new rate could be expected to go into effect is next year.

What you can do:

To learn more about the proposed rate and resources for financial support, click here.