At the Arizona Corporation Commission’s June 21, 2023, regular open meeting, Commissioner Nick Myers voted in favor of settling a lawsuit with Arizona Public Service Company (“APS”) resulting from its 2019 rate case. “With a 4-1 vote, the Commission made the right decision because this settlement protects APS customers,” said Commissioner Myers, “Through the work of the Commission and its Legal Division, APS was willing to settle and forgo millions of dollars of revenue.”   

Earlier this year the Arizona Court of Appeals ruled in favor of APS in part, vacating the Commission’s 0.2% reduction in APS’s return on equity (“ROE”) and it’s disallowance of investments associated with the installation of Selective Catalytic Reduction equipment (“SCR”). To avoid unnecessary further litigation expense and delay—costs which are passed on to APS customers— the Commission and APS reached a resolution that minimizes the bill impact on customers.

To recover the lost revenues over the past nineteen months due to the lower ROE and SCR disallowance, APS agreed to amortize the recovery over four years without interest. In addition, APS agreed to utilize a 2038 end of life for depreciation purposes on the SCR costs, rather than its planned 2031 retirement date.

In initial negotiations, based on the ruling from the Court of Appeals, the typical residential customer with annual average usage of 1,050 kWh per month could have experienced a monthly bill increase of around $3.40. However, after extensive negotiations and through the tireless efforts of the Commission’s Legal Division, the same typical residential customer is now anticipated to experience a much lower bill impact of $1.84. 

 “I am pleased the Commission was able to reach a settlement that complied with the Court of Appeals decision but in a way that will save APS customers millions of dollars,” concluded Commissioner Myers.   

For more information about this settlement, please contact Amanda Hasty at ahasty@azcc.gov