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Arizona Public Service and a group of stakeholders from throughout the state reached an agreement last month in regard to the company’s first proposed rate hike in five years.

The agreement, which will go before the Arizona Corporation Commission for approval this summer, includes not only the rate hike but solar power agreements and fees for those who choose to use an analog meter as opposed to the APS-preferred smart meter.


Under the agreement, the typical monthly bill for residential customers would increase 4.5 percent, or about $6 per month. APS originally had requested a revenue increase of 7.96 percent, or about $11 per month. The proposed demand charges will now be optional, as opposed to the mandatory demand charges that APS originally asked for in its application. In addition, under the agreement APS would refund to customers $15 million of surplus energy efficiency program funds over the first year that new rates are in effect.

“This agreement demonstrates what can be accomplished when people come together with a willingness to compromise and resolve complex policy issues,” APS Chairman, President and CEO Don Brandt said in a statement. “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. 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, the release stated.

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.

APS agreed to invest $10 million to $15 million per year in an AZ Sun rooftop program in which customers would receive a monthly credit to allow the company to install rooftop solar systems on their homes. This program would expand access to solar for limited- and moderate-income customers throughout the APS service area.

The city of Sedona intervened on behalf of its residents earlier this year not only in regard to the proposed rate hike but fees for the 40 percent of those residents who opted out of having their analog meters replaced with a smart meter.

Under the proposed agreement, those who now choose to replace their smart meter with an analog will be charged a one-time conversion fee of $50. In addition, those who do have analog meters will be charged a $5 monthly meter-reading fee. Originally, APS had requested a $15 monthly fee.

When asked if he feels these proposals are fair, Sedona City Attorney Robert Pickels said that decision will be made by the Sedona City Council. Members, ultimately, will give direction as to whether the city will sign on to the final settlement agreement.

“There is an old adage about settlement negotiations that ‘if both parties walk away feeling somewhat dissatisfied, then it is probably a fair settlement,’” Pickels said. “The level of satisfaction likely varies from each party that participated in the process.  

“Some were not willing to support the agreement at all because they didn’t feel enough concessions were made. Others had all of their issues addressed and are fully supportive. I think that by indicating support for the agreement at this point, a certain level of satisfaction in its fairness can be inferred.”

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