Phoenix, Ariz. – The Arizona Corporation Commission unanimously approved the Power Supply Adjustment (PSA) rate for Arizona Public Service Company (APS) customers to go into effect on March 1, after Commissioners thoroughly questioned the utility about its spending and calculation of the funds.  The PSA will increase by $0.002 per kWh, and according to APS’ calculation and Staff review, the impact on the average residential customer using 1,050 kWh would be an increase of $2.10 per month.  

The PSA adjuster is an annual adjustment that would otherwise go into effect automatically unless the Commission decides to review the proposal. The PSA is a pass through cost to account for actual spends by the utility and APS does not earn a profit on the PSA.  APS voluntarily delayed the implementation of the increase pending Commission deliberation and action.  The increase covers the prices the company has already paid to fuel its power plants and purchase renewable energy via Purchase Power Agreements (PPAs).  APS estimates its undercollected balance for fuel costs currently stands at about $290 million, and this adjustment will save ratepayers about $20 million a year in interest.

The Power Supply Adjustment rate can go up or down, depending on the market price of fuel, such as natural gas, used to generate energy and the cost of purchasing energy from another company, such as an independently owned and operated solar developer.  During the hearing, APS confirmed that it gets about two-thirds of its power from its own generation, and approximately one-third of the balances comes as a result of purchased renewable energy generated by other companies.