Arizona Public Service ratepayers are using multiple tools to protest the utility's current rate case, and at least one regulator is pressing to open APS' service territory to retail electric competition.

"I hate that everyone keeps saying we are APS customers, because we are more like APS hostages," Arizona Corporation Commission member Justin Olson quoted one commenter as saying during a remote meeting July 27, the first of several devoted exclusively to public comment on the rate case. "Customers have a choice and are granted customer service, and we are not with APS."

The rate case, originally scheduled for hearings in October, will go before the ACC Dec. 14, more than a year after it was first filed. The commission agreed to delay the hearings in response to intervenors' requests citing the hardship of preparing for them while working remotely due to COVID-19 pandemic precautions.

"In response to what the Commission is hearing from APS ratepayers, I would like to raise the possibility of opening up APS's service territory to competition," Olson said in a Sept. 10 letter filed to the docket. His filing included a page of customer comments supporting electric competition pulled from the transcript of the commission's July 27 and 28 public-comment meetings [E-01345A-19-0236].

Olson in his letter requested that parties and intervenors in the current case "develop a record" on whether the ACC as part of the current rate case should make competition available in APS territory. He suggested it as a means for addressing the issues raised during the sessions and in "hundreds" of comments already filed to the docket.

ACC Chairman Bob Burns, in a Sept. 4 filing to a separate docket dedicated to the rate review and examination of APS' books, said he had received 100 emails with duplicate or similar content opposing the rate case, samples of which he included in the filing [E01345A-19-0003].

In a Sept. 8 filing, ratepayer advocate Abhay Padgaonkar suggested that APS has used math to its advantage in reporting shut-off rates for recent years. By including anomalous "outlier" numbers for monthly shut-off rates that were substantially lower compared with the same calendar months in prior and subsequent years, the company effectively reported average shut-off numbers for certain periods that were between 15 percent and 30 percent lower than they would have been if the outliers were removed, Padgaonkar points out in the filing. A comparison of annual shut-off rates before and after approval of the utility's last rate case reflects a 23-percent increase, he says in the filing.

Padgaonkar, a management and marketing consultant, testified as an expert in a formal complaint brought in 2018 by APS customer and ratepayer advocate Stacey Champion regarding the utility's 2016 rate case [E-01345A-18-0002]. Implementation of the new rates, approved by settlement in 2017, included a variety of new plans that have caused great confusion among consumers, who were often shifted to different plans without expecting it. A large number of APS ratepayers, many of them senior citizens on fixed incomes, have come forward claiming to be paying substantially more than the average 4.5-percent increase approved in the case [01345A-16-0036, Decision 76295].

APS says it has had time-of-use rates and demand charges in place since the 1980s. "Our philosophy is to provide customers with options, and they decide how much or how little they want to engage or be involved," APS spokesperson Jill Hanks said in a telephone interview. "We have customers who love those rates and save tons of money in the summer." Others prefer the convenience of steady rates throughout the day and year, she said. Customers also have the option to annualize their bills to avoid summer spikes when air conditioning becomes a necessity. The downside of this is that they tend to pay less attention to consumption, according to Hanks. The current rate case proposes simplified bill options, eliminating some fees, more support for low-income customers and a subscription plan that allows customers to lock in energy costs for a two-year period, Hanks said.

As part of the previous rate case settlement, APS was supposed to provide considerable customer education about the new rate options to help ratepayers avoid surprises on their bills. The utility has fallen under criticism, including from commissioners, for failing to provide adequate customer education and outreach. Padgaonkar in his most recent filing says a detailed analysis of APS figures suggests the utility might be receiving between $83 million and $104 million in revenue surplus annually from customers not on their most economic plans.

A local news outlet has called for an investigation into the conduct of ACC Utilities Division Director Elijah Abinah, based in part on Padgaonkar and Champion's allegations that APS has underreported shut-off information and earned more than the approved 10-percent rate of return, as independent consultant Overland Consulting concluded in a draft report submitted to the ACC in June 2019. Portions of the report were originally redacted when filed to the docket.

ACC member Boyd Dunn in an emailed comment said he has "full confidence in Commission staff and Director Abinah." Other commissioners and ACC staff declined to comment on the allegations.

Staff Writer

Abigail Sawyer grew up in northwestern New Mexico near two massive coal-fired power plants. She spent many hours gazing out the car window at transmission lines on family road trips across the Southwest and now reports on the region from San Francisco.