Details for APS/LAVIDGE - Ad from 2020-01-12

Legal No. 687 PUBLIC NOTICE OF HEARING ON ARIZONA PUBLIC SERVICE COMPANY’S (“APS’S”) APPLICATION FOR APPROVAL OF A PERMANENT RATE INCREASE. (DOCKET NO. E-01345A-19-0236) Summary On October 31, 2019, APS filed with the Arizona Corporation Commission (“Commission”) a Rate Application (“Application”), requesting approval of rates, charges, and schedules that would result in an annual increase in net revenue of $184 million. The Application uses a test year ending June 30, 2019. APS states that the increased revenue requested is necessary to cover the Selective Catalytic Reduction (“SCR”) project at the Four Corners Power Plant, the Ocotillo Modernization Project, an increase in Crisis Bill funding for limited-income customers experiencing financial crisis, the elimination of certain customer fees, changes to the depreciation rates currently applied to APS’s utility plant, and 12 months of post-test year investments in plant. The Application proposes a return on equity of 10.15%, a 7.41% weighted average cost of capital, and a return on fair value increment of 1.0%, resulting in a proposed fair value rate of return of 5.62% on a proposed fair value rate base of $12.3 billion. The proposed revenue requirement includes a pro forma adjustment to reflect the increased expense related to suspending disconnections of service and late fees during the summer months to comply with the Commission’s emergency rules on termination of service. Adjustor Mechanisms APS proposes: • to eliminate the monthly Tax Expense Adjustment Mechanism (“TEAM”) Phase I credit ($0.004194 per kWh for most customers) and instead include in base rates the $119 million in annual tax expense savings that resulted from the 2018 federal corporate tax rate reduction; • to recalculate and retain its Lost Fixed Cost Recovery Mechanism (“LFCR”); • to stop collecting through the monthly Environmental Improvement Surcharge (“EIS”) the $3.9 million environmental compliance capital investment and instead collect it through base rates; and • to stop collecting through the monthly Renewable Energy Adjustment Charge (“REAC”) the $321,000 Arizona Solar Communities-related renewable generation capital investment cost and instead collect it through base rates. In the alternative, APS proposes to eliminate the need for all adjustor mechanisms other than the Power Supply Adjustor and the Transmission Cost Adjustor through implementation of a formula rate mechanism that would allow for annual review and adjustment to rates based on agreed inputs to the formula. Residential Rate Changes APS does not propose any major changes to its existing rate plans. APS proposes to add a winter super off-peak (10 a.m. to 3 p.m.) feature to its two residential demand rates (R-2: Saver Choice Plus and R-3: Saver Choice Max), to eliminate certain routine customer charges and instead collect those charges through base rates, to waive certain customer charges once per calendar year per customer, and to propose a subscription flat rate pilot program that would allow for a guaranteed monthly bill for two years based on average annual historical usage. General Service Rate Changes APS proposes to increase general service rates to reflect the requested increase in revenue requirements for the class, to create an experimental AG-Y program that would provide access to market index pricing for eligible medium and large general service customers, to streamline street lighting rates, to revise irrigation pumping rates (schedule E-221) to distinguish between agricultural and non-agriculture uses and better align to cost of service, and to cancel the E-36M rate schedule (Station Use Service Medium) due to low enrollment. Bill Impacts Based on test year usage, the proposed residential rates are expected to result in approximately 95.5% of customers experiencing a monthly bill increase of between 3% and 6%, approximately 4.33% of customers experiencing a monthly bill increase of 7%, and approximately 0.13% of customers experiencing a monthly bill increase of between 8% and 11%. The proposed general service rates are expected to result in an average monthly bill increase of 5.8% for general service customers. Additional Requests APS requests approval of an accounting order to allow it to defer the expenses of the limited-income discount programs E-3 and E-4 above or below test year expenses for recovery or refund in APS’s next rate case. APS also proposes to change the eligibility criteria for new customers in rural areas (Service Schedule 9) by reducing the minimum customer load requirement from 2 MW to 1 MW. Further, APS proposes to revise its conflict-of-interest provisions. Finally, APS proposes to offer a simplified residential bill and requests waiver of any Commission rule requirements necessary to allow for such a bill. NEITHER THE COMMISSION’S UTILITIES DIVISION (“STAFF”) NOR ANY INTERVENOR HAS YET MADE ANY RECOMMENDATION REGARDING APS’S APPLICATION. THE COMMISSION IS NOT BOUND BY THE PROPOSALS OF APS, STAFF, OR ANY INTERVENORS. THE COMMISSION WILL DETERMINE THE APPROPRIATE RELIEF TO BE GRANTED IN RESPONSE TO APS’S APPLICATION BASED ON THE EVIDENCE PRESENTED IN THIS MATTER. THE FINAL RATES APPROVED BY THE COMMISSION MAY BE HIGHER, LOWER, OR DIFFERENT THAN THE RATES PROPOSED BY APS OR BY OTHER PARTIES. If you have any questions concerning how the Application may affect your bill or other substantive questions about the Application, you may contact APS at: its office at 400 N. 5th Street, M.S. 9708, Phoenix, Arizona, 85004, Attn: Rate Case Program Manager, call 602-250-2767 or email How You Can View or Obtain a Copy of the Application Copies of the Application are available from APS at; at the Commission’s Docket Control Center at 1200 West Washington Street, Phoenix, Arizona, and the Commission’s office at 400 West Congress Street, Suite 218, Tucson, Arizona, during regular business hours; and on the Commission website ( using the e-Docket function. Public Comment The Commission will schedule Public Comment Sessions concerning this matter at a later date. Written public comments may be submitted by mailing a letter referencing Docket No. E-01345A-19-0236 to Arizona Corporation Commission, Consumer Services Section, 1200 West Washington, Phoenix, AZ 85007, or by submitting comments on the Commission’s website ( using “Cases and Open Meetings” and “Make a Public Comment in a Docket.” If you require assistance, you may contact the Consumer Services Section at 602-542-4251 or 1-800-222-7000. Arizona Corporation Commission Public Hearing Information The Commission will hold a hearing on this matter beginning July 17, 2020, at 10:00 a.m., at the Commission’s offices, 1200 West Washington Street, Phoenix, Arizona. Public comments will be taken on the first day of the hearing. If you do not intervene in this proceeding, you will receive no further notice of the proceedings in this docket unless you sign up to Follow the Docket. However, all documents filed in this docket are available online (usually within 24 hours after docketing) at the Commission’s website ( using the e-Docket function. Information on how to Follow a Docket is available on the Commission’s website by clicking on “Cases and Open Meetings” and “Follow a Docket.” About Intervention The law provides for an open public hearing at which, under appropriate circumstances, interested persons may intervene. An interested person may be granted intervention if the outcome of the case will directly and substantially impact the person, and the person’s intervention will not unduly broaden the issues in the case. Intervention, among other things, entitles a party to present sworn evidence at hearing and to cross examine other parties’ witnesses. Intervention is not required for you to appear at the hearing and provide public comment, to file written comments in the record of the case, or to receive emailed notice of each filing made in the case by following the docket. Information about what intervention means, including an explanation of the rights and responsibilities of an intervenor, is available on the Commission’s website ( by clicking on “Cases and Open Meetings” and then clicking on “Intervene in a Case.” The information includes a Sample Intervention Request and a Fillable Intervention Request Form. To request intervention, you must file a written request to intervene, either (a) by filing a hard copy request (meeting filing requirements) with Docket Control (Docket Control, 1200 West Washington, Phoenix, AZ 85007), or (b) by eFiling the request. Your request must be filed or eFiled no later than February 11, 2020. Instructions and restrictions for eFiling are available on the Commission’s website at You also must serve a copy of the request to intervene on each party of record, on the same day that you file the request to intervene with the Commission. Your request to intervene must contain the information below: 1. Your name, address, and telephone number; 2. The docket number for the case in which you are requesting to intervene; 3. A short statement explaining: a. Your interest in the proceeding (e.g., a customer of the regulated company involved, a property owner in an area to be affected by the case, etc.), b. How you will be directly and substantially affected by the outcome of the case, and c. Why your intervention will not unduly broaden the issues in the case; 4. If a hearing has not been scheduled, whether and why you believe a hearing is needed; 5. A statement certifying that you have sent a copy of your request to intervene to the regulated company or its attorney and to all other parties of record in the case; and 6. If you are not represented by an attorney who is an active member of the Arizona State Bar, and you are not representing yourself as an individual, sufficient information and any appropriate documentation to demonstrate compliance with Arizona Supreme Court Rules 31, 38, 39, and 42, as applicable. This only applies if you are NOT representing yourself and you are not a licensed attorney. The granting of motions to intervene shall be governed by A.A.C. R14-3-105, except that all motions to intervene must be filed on or before February 11, 2020. ADA/Equal Access Information The Commission does not discriminate on the basis of disability in admission to its public meetings. Persons with a disability may request a reasonable accommodation such as a sign language interpreter, as well as request this document in an alternative format, by contacting the ADA Coordinator, Kacie Cannon, E-mail, voice phone number 602-542-3931. Requests should be made as early as possible to allow time to arrange the accommodation. PUB: Jan 12, 2020 687

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