APS seeks 14% rate hike; Mayes calls it 'outrageous'
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Gabriella Turrisi/Axios
APS, the state's largest utility provider, is seeking a 14% rate hike that Attorney General Kris Mayes is calling "outrageous."
Why it matters: The typical residential customer would pay an additional $20 per month for electricity if the increase is approved, according to the utility company.
The big picture: The proposal comes as metro Phoenix data centers demand more energy, hotter and longer summers require greater air conditioning needs and consumers continue to feel the burden of inflation.
State of play: APS announced last month that it will hold mandatory public hearings on the proposal early next year.
- The elected Arizona Corporation Commission must approve the rate increase for it to take effect, which wouldn't be until July 2026 at the earliest, per APS.
Friction point: The public utility company says its current pricing no longer covers the cost of delivering power to its 1.4 million customers.
- Meanwhile, Mayes argues the rate hike will only inflate corporate profits. In a press release, she noted that APS' parent company Pinnacle West Capital Corporation reported net income of $609 million last year.
Threat level: Customers who can't afford their electricity bills may have their power shut off — a sometimes deadly consequence.
- APS and other Arizona power companies have moratoriums on disconnects during the hottest months of the year, but with extreme heat conditions starting sooner and lasting longer, people have died of heat-related causes while their power was turned off, an Arizona Republic investigation recently found.
Zoom out: Data centers and extreme weather conditions are driving up the cost of energy in much of the U.S.
- APS says that the rate increase would, in part, pay for fire-resistant equipment and technology that provide early warnings during wildfires.
- It would also allow APS to upgrade its power plants to increase efficiency during the summer, when power demand is at its peak.
Between the lines: As part of the rate case, APS is also asking the Corporation Commission for permission to charge data centers and other "extra-large energy users" a higher rate to account for the extra demand they place on the state's electrical grid.
What we're watching: An administrative judge ruled last month that Mayes can intervene in the rate case on behalf of the state, allowing her to testify against the proposed increase early next year.