Arizona Public Service Company wants to raise its electricity rates by about 14%.
If approved by the Arizona Corporation Commission, it could take effect later this year.
But Attorney General Kris Mayes says APS could get away with a 3% increase and still maintain reliable service.
She says in the current plan, residential rate-payers would subsidize growing energy demand by new data centers.
In a statement, an APS spokesperson disputed Mayes' 3% plan. They say their proposal would raise electricity rates on large energy users like data centers substantially, while offsetting costs for families and small businesses.
Mayes spoke with KNAU’s Adrian Skabelund outside the Prescott Valley Public Library, where she spoke to rate payers this week.
ADRIAN SKABELUND: As you are talking to ratepayers across the state, what are you hearing about this rate increase and about the challenge that you guys have for it?
KRIS MAYES: I'm hearing that people just can't afford this. A 15% rate increase on top of three prior rate increases is going to drive a lot of people into untenable situations. And that they're going to have to choose between medication and paying their light bill, that they are already experiencing increases in their rent. And now [there are] these huge rate increases that really seem to be driven by data centers that a bunch of billionaires want to build.
And there's a sense out there of extreme unfairness, and it's righteous. This is unfair.
It's not fair for corporate America to ask average Arizonans who are barely making it to foot the bill for their data centers they should be paying for themselves.
SKABELUND: Three percent is what your office has insisted is the actual amount that should be increased. That's a big difference from the 14% on average that ratepayers could see.
Can you talk about what that would mean to the average ratepayer, that difference?
MAYES: The difference is hundreds of millions of dollars that we think APS doesn't deserve, and if they were to win this rate case, would be a huge wealth transfer from average Arizonans to this giant, multi-billion-dollar corporation.
So we're hoping that the commission sides with us, or at least comes closer to our proposal.
And I think it's important to remember, [APS has] already received hundreds of millions of dollars in rate increases in the past.
SKABELUND: APS has said that one of the things this will help let them invest money in is safety features, like for wildfires. How do you see that justification given the real concern among northern Arizonans about that issue?
MAYES: Yeah, no. The utility has plenty of money and profits to invest in wildfire management and vegetation management. That is a core responsibility of being a utility.
They have to do that, and they are making $600 million a year in profit. You would think that they could invest some of that in wildfire management and in preventing wildfires. You expect them to do that. That's their duty to do that.
So I kind of think it's ridiculous for them to try to excuse this rate increase by saying they need it for wildfire management.
SKABELUND: Obviously, we've seen most of the data centers built in, kind of, the metro-Phoenix area.
I guess what I hear you saying is that Arizona ratepayers across the state are subsidizing those developments. Is that the way you really view this?
MAYES: You know, right now, it looks like the data centers are going to Maricopa County and Tucson, so yes. I think it is fair to say that there are a lot of ratepayers in rural Arizona, and especially in Yavapai County, who are being asked to subsidize data centers in the great state of Maricopa.
And that's sort of an added layer of unfairness. This is a utility that serves the vast majority of the counties in Arizona, and the vast majority of those counties aren't seeing data centers. They're going into Phoenix and Tucson, and yet the ratepayers of Prescott Valley and Prescott are being asked to foot the bill, and they're not getting those jobs.
SKABELUND: Attorney General, thank you so much for giving me some of your time.
MAYES: Thank you. It's great to be with you.
This conversation has been edited for length and clarity.
