By Rusty Bradshaw
Arizona Public Service, one of the state’s major electricity providers, reached a rate review agreement with a diverse group of stakeholders on its first rate review in five years.
The agreement includes dropping a mandatory demand charge that had set customers on edge during local public meetings. APS already has the demand charge on an optional basis and that will remain in the agreement, according to an APS press release.
Dropping the mandatory demand charge was a huge win for customers, according to Greg Eisert, Sun City Home Owners Association Governmental Affairs Committee chairman.
“It should be optional for customers,” he said. “It takes a lot of diligence for that charge to save customers money, so they should have the option whether they want to take that step.”
Under the terms of the agreement, that still must be approved by the Arizona Corporation Commission, APS will be able to raise rates by 4.5 percent, an average of 4.5 per month. Utility officials had requested revenue increases that would have raised the electicity rate 7.96 percent, an average of $11 per month.
“There are a number of different categories of electricyt use — residential, commercial, etc.,” Mr. Eisert said. “So the average bill increase could be higher than the rate increase.”
The agreement also calls for APS to refund to customers an estimated $15 million of savings through a surplus energy efficiency program through the first year of the agreement, according to the utility’s press release.
“We see this as a win for customers,” Mr. Eisert said. “APS was very generous in working with all the factions; they gave up a lot.”
The agreement must now go before the Arizona Corporation Commission for review, a public hearing and a vote by commissioners later this summer.
According to APS officials, the agreement will pave the way for investment in a smarter, cleaner energy infrastructure; more choice and control through new rate options for customers; and continued solar leadership for Arizona.
“This agreement demonstrates what can be accomplished when people come together with a willingness to compromise and resolve complex policy issues. Consumer advocates, environmental advocates, business customers, solar industry representatives and more have agreed on a path for Arizona’s energy future. The winners are Arizona electricity customers,” said Don Brandt, APS chairman, president and CEO. “What we have is a blueprint that will bring about more solar, a smarter energy infrastructure, a cleaner energy mix and more options for customers.”
Limited-income customers would benefit from increased program funding from the current $35 million to $48 million, a simplified monthly bill discount and a $1.25 million annual emergency bill assistance fund, according to APS officials.
Under the agreement, APS would not begin another request for a comprehensive review of its rates before June 1, 2019, meaning three years between rate reviews.