Arizona Public Service Co. has asked the state Corporation Commission to approve a nearly 14% electricity rate increase.
The proposal has gotten pushback from consumer advocates and Attorney General Kris Mayes.
APS says the rate increase is needed to keep up with the rising costs of supplying energy to almost 1.4 million Arizona homes.
The state’s largest utility last raised rates by about 8% two years ago to keep up with rising costs.
But APS spokesperson Ann Porter says the expenses of maintaining the grid have since sharply risen.
“Looking back at 2021 to 2025, overhead wires are 87% more expensive. Some of the transformers are almost 90% more expensive,” Porter says. “So our motivation is not for shareholders. Our motivation is to do what’s best for our customers.”
Mayes insists APS could manage with just a 3% rate hike.
She says average ratepayers are subsidizing the energy needs of large users like data centers.
“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,” Mayes says. “If [APS] were to win this rate case, it would be a huge wealth transfer from average Arizonans to this giant, multi-billion-dollar corporation.”
Mayes’ office has challenged the new rate proposal with the Corporation Commission. A judge is expected to hear it in May.
But Porter says a more modest increase would threaten reliability and jeopardize the company’s ability to invest in the grid long-term.
And according to Porter, the energy used by data centers makes up a fairly small portion of growing energy consumption.
“Last year, on our hottest day of the year, we had peak energy demand,” Porter says. “About 5% of that demand came from data centers, so it's a very small subset of our customer base.”
Porter says APS’s rate proposal includes a 45% increase in the rates for data centers versus the rates for residential and small businesses.
“This is what it costs to provide [data centers] with the energy they need, but also maintain reliability on the grid, and it actually helps position those costs to stay within the data centers so [costs] don't get shifted to our residential customers or our small business customers,” she says.
