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Ariz. to review APS rates, suspects utility is over-earning

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Ariz. to review APS rates, suspects utility is over-earning

Responding to numerous complaints from customers about increases in their bills, Arizona regulators will begin an audit and review of Arizona Public Service Co.'s electric rates.

The Arizona Corporation Commission made the decision during a Jan. 9 meeting with commission staff looking at whether the Pinnacle West Capital Corp. subsidiary has sufficiently implemented its customer outreach and education programs, which are intended to help customers minimize their bill increases.

During the meeting, Utilities Division Director Elijah Abinah emphasized that "there cannot be an adjustment upward or downward during a rate review." The commission cannot adjust rates up or down, but will simply examine whether the utility is earning more than it has been authorized to earn in the last rate case.

APS offers different rate plan options and the utility is supposed to help each customer select the plan that works best for them. The commission conditioned its August 2017 approval of the utility's more than $362 million rate increase with a provision that APS inform and guide its customers in selecting time-of-use rate schedules and taking steps such as shifting use of major appliances to off-peak times, when rates are lower, to minimize their electric bills.

"Due to the significant amount of complaints of large bill increases received by the Corporation Commission, Commissioners believe that APS may not have adequately performed its outreach efforts and might be earning profits beyond what was authorized in its recent rate case," the commission said in a press release announcing the decision.

The commissioners ordered the staff to examine the utility's revenues for 2018 and to file a final report by May 3.

The decision follows a Dec. 24, 2018, letter in which Burns and Commissioner Boyd Dunn said they would ask the staff to undertake a rate review. The commissioners on Jan. 7 elected Burns as commission chairman. Commissioner Andy Tobin said in Nov. 1, 2018, and Nov. 14, 2018, letters he had concerns regarding customer complaints about higher bills and asked APS to respond.

Tobin was absent from the staff meeting, but Commissioner Sandra Kennedy, who has called for Tobin's resignation because she said Tobin had inappropriate contacts with APS during the rate case, supported the rate review and voted with the other commissioners for it.