Although opening day will be here before we know it, in the last year three electric utilities have already stepped up to the plate seeking a rate increase from the Arizona Corporation Commission.
Fortunately, two have struck out. Both UNS Electric and Tucson Electric Power lost their pursuit to score a mandatory demand charge for residential customers. This charge would have been set for the entire month based on the most electricity used in just one hour.
Next up to the plate is Arizona Public Service (APS). Based on a recent proposed settlement agreement, a third out for mandatory residential demand charges seems imminent. This is very good news for Arizona ratepayers. Many customers would have seen dramatic increases on their electricity bills.
Soon it will be time for the five elected members of the Arizona Corporation Commission to respond to this proposed settlement agreement. Although we appreciate efforts to reach a negotiated compromise, it is important to note that AARP did not sign onto this agreement. We share some of their concerns and also oppose the agreement.
While we should celebrate the rejection of mandatory residential demand charges, there are several key adjustments that Commissioners should make to the agreement in order to go to bat for ratepayers, hit a home run, and log a win:
Commissioners should say no to an unjustified rate increase. A rate increase of $6 per month for the average customer is not supported by the facts in the case. In addition, this increase will be a burden for many consumers, especially low-income households or those on a fixed income.
Commissioners should oppose any increase to the mandatory monthly fee. The proposed agreement would increase this fee from $8 to $15 per month for many residential customers -- an increase of 87.5 percent. Instead of mandatory fees which customers must pay no matter how little electricity they use, Arizonans should be charged primarily on the amount of electricity they do use. This provides customers more control over their electricity bills and offers a greater incentive to save energy and money in their homes and businesses.
Commissioners should ensure that customers -- not APS -- select the best rate plan to meet their needs. Under the proposed settlement agreement, new customers would automatically be defaulted to Time-of-Use rates, which charge consumers a higher price for electricity during certain time periods. Customers would not be allowed to switch their plan back for 90 days. A moratorium on ratepayer choice means some consumers -- such as those who are at home all day, who work from home, or who have inflexible schedules -- may be forced onto a costly rate plan that does not meet their needs.
As the Arizona Corporation Commission hosts public comment sessions across the state and prepares to vote on the APS rate case, we encourage APS ratepayers to urge the Commission to reject the unjustified rate increase and say no to unfair utility charges.
Diane E. Brown is the Executive Director of the Arizona PIRG Education Fund. The Arizona PIRG Education Fund conducts research and education on issues in the public interest. Diane can be reached at email@example.com