Munds Park residents Vanessa and Martin Zeigler aren’t huge energy users and try to conserve wherever they can. They know they can usually expect an electric bill from APS to come in between $110 and $120 around this time of year, so when their December bill was $190, Martin Zeigler immediately called the utility to see what was going on.
Over the past three months, in fact, the Zeiglers’ energy bills have been 55 percent to 88 percent higher than the same months last year, even though their energy usage was, on average, just 7 percent higher.
APS customers across Arizona are seeing their electricity bills rise as the state’s largest utility rolls out a new rate structure, including a rate increase, approved by regulators in August. It will bring in $95 million per year in additional revenue for the utility company. Customers are also being required to choose a new rate plan as the utility phases out existing plans by this May.
But some people, including the Zeiglers, are seeing monthly bill increases well above the 4.5 percent or $6-per-month average for residential customers that APS projected in its rate filing. More than 400 people signed onto a formal complaint, filed last week, requesting the Arizona Corporation Commission rehear the utility’s rate case.
“This rate increase has hurt people and families who are now being forced to make the choice of paying an exorbitant electric bill or buying groceries,” petition circulator Stacey Champion wrote in a cover letter with the petition.
APS was given 20 days to respond and then the commission will have a hearing to consider the complaint.
But the effects of the utility’s August rate case aren’t the only changes APS customers will see to their electricity charges in the coming months.
On Tuesday, APS announced it would seek a $119 million reduction in customers’ bills — about $4.68 per customer, on average — in response to corporate tax cuts approved by Congress in December. The tax-related adjustment was a new component of APS’ most recent rate case and provides for income tax effects to be passed on to customers, with the amount recalculated each year.
The savings will be portioned out on a per-kilowatt-hour basis, so the average customer using 1,100 kilowatt hours per month would save $4.68 on each bill, with higher users saving more and lower users saving less. In a press release, the utility stated that it anticipates additional tax cut savings in the future, “once the full impact of the new law is realized.”
The reduction needs approval by state regulators before it can go into effect.
On a parallel track, APS plans to ask those same regulators, the Arizona Corporation Commission, to approve another $70 million revenue increase to cover the cost of pollution controls installed on the Four Corners Power Plant this year and last year. The pollution control devices, which reduce emissions of nitrogen oxide and sulfur dioxide, were a requirement of a 2015 settlement with the U.S. Environmental Protection Agency and environmental groups to comply with regional haze regulations.
Installation costs of the pollution controls are split among the owners, and APS owns and operates 63 percent of the Four Corners Power Plant, located near Farmington, New Mexico.
To recoup what it expects to be nearly $400 million in capital costs on the project, the company is requesting a 2 percent rate increase. That works out to about $3 per month for the average energy user, spokeswoman Anna Stewart wrote in an email.
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Customers’ energy bills would reflect whatever rate change is approved by the commission before January of next year.
NEW PLANS HIGHER RATES
When Martin Zeigler called APS, he learned about the rate change and chose a new plan that he hopes will bring his family’s bill back down.
“I'm curious about what the next bill will look like,” he said.
As of Oct. 31, which is the most recent data APS provided, just 6 percent of customers have picked a new rate plan. APS did not release information on what types of plans customers are choosing.
Once they choose a new plan or are automatically transitioned to a new plan, customers can make a plan switch once more within a year, Stewart wrote.
“We encourage customers to stay on the service plan for at least a year to realize the full benefits of the plan through all seasons,” she wrote.
Since APS' new rate went into effect, the Arizona Corporation Commission has received a steady stream of complaints from customers saying their bills have risen much more than the average that was publicized. Among them was a Show Low customer who saw a 48 percent increase in her December bill, despite the same energy usage, and a Scottsdale man who saw his bill nearly triple over the same time the year before.
In an emailed response to questions about why customers were seeing a spike in their bills of much more than $6 per month, Stewart wrote that number is the average over 12 months so bill impacts could be different based on the season.
Higher or lower-than-average temperatures or changes to consumption behavior will also impact what people are charged, Stewart wrote.
Other APS officials have said that once people switch to new plans and adjust their habits to avoid new peak pricing hours and demand rates they could see a decrease in their electricity costs.
The company did not respond to a request for any data it has collected on changes to customer bills or the average increase to its customers' bills since the rate increase went into effect.
Update: Officials with the Residential Utility Customer Office took a closer look at the Zeiglers' APS bills and found that the family was receiving a specific discount that they aren't this year. After taking that discount out of the equation, the increase in the family's electricity bill between last year and this year works out to an average of 5 percent to 7 percent, said Jordy Fuentes, RUCO's deputy director.