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august 15, 2017
acc approves aps rate review agreement
customers to benefit from continued investment in reliability, clean energy, innovation
– The Arizona Corporation Commission today approved a comprehensive and broadly
supported agreement to resolve Arizona
Service’s first rate review in five years. ACC Staff, the Residential
Utility Consumer Office, limited-income advocates, private rooftop solar
organizations and dozens of other stakeholders supported the consensus
agreement, which encompasses a wide range of customer interests and shows what
can be accomplished when people come together to resolve complex policy issues.
ACC approved the previously established agreement with modifications, but the
changes do not materially affect the overall economic terms of the agreement.
energy consumers are the clear winners here because this agreement enables
investment in a smarter, cleaner energy infrastructure, gives customers more
choice and control through new rate options, and continues Arizona’s solar
leadership,” said Don Brandt, APS Chairman, President and CEO.
The agreement brings substantial benefits to Arizona while minimizing
the impact on customer bills. Specifically, it allows for a 3.3 percent overall revenue increase, effective Aug. 19. The revenue
increase is the company’s first base rate increase in five years with the
typical monthly residential bill increasing 4.5 percent, or about $6 per month.
The agreement also includes:
- A $10 million to $15
million per year investment in an AZ Sun II rooftop solar program in which
limited- and moderate-income customers would receive a monthly credit to allow
APS to install rooftop solar systems on their homes.
- A $15 million refund of
surplus energy efficiency program funds to customers;
funding, annual crisis bill assistance and a simplified monthly bill discount
for limited-income customers;
existing private solar customers; and
Four new off-peak
holidays, increasing the total number to 10.
allows us to continue investing in Arizona’s future and continue making
efficient, cost-effective investments while providing safe, reliable service
for our customers,” said Brandt. “It is a needed step in creating a long-term,
sustainable energy policy for our customers and the state.”
Specifically, resolution of the rate review allows APS to:
significantly over the next three years in upgrades and maintenance for
the energy grid;
emissions and water use through a $500 million investment to modernize the
Ocotillo Power Plant;
emissions and comply with more stringent federal environmental standards
through a $400 million investment at the Four Corners Power Plant; and
the continued development of innovative technologies such as battery
storage, microgrids and advanced solar research.
ACC’s decision also builds on a previous Commission decision that aims to
ensure private solar customers are fairly compensated when they produce excess
electricity, while reducing the generous subsidies previously paid for by
customers without rooftop solar. Future solar customers will be compensated for
their excess electricity at a credit starting at 12.9 cents/kilowatt-hour.
What Happens Next?
The rate adjustment will take effect on Aug. 19. Customers do not
need to take any immediate action. APS
will communicate with customers starting in the fall about how they can pick a
new rate plan. The new rate options include incentives for more efficient use
of energy and additional opportunities to save money. Among the benefits of the
- An updated time-of-use
plan that will become the standard rate for future customers
Two optional demand rate
plans, plus a pilot demand rate for customers with certain types of technology
at their homes, all of which would provide even more opportunities to save;
Additional savings for
customers with two more off-peak hours on weekdays (3 p.m. to 8 p.m. instead of
noon to 7 p.m.) and four more off-peak holidays; and
A plan that includes a
super off-peak period of 10 a.m. to 3 p.m. weekdays in winter to encourage
customers to use more electricity at midday when solar production is abundant
and demand is low.
For business customers, the agreement:
APS will not file another
request for a comprehensive review of its rates before June 1, 2019, meaning
three years between rate reviews.
- Establishes a special
discount rate for public schools;
- Caps the net impact bill
increase for military installations;
a new economic development rate option to encourage businesses to relocate
or expand, along with a rural municipal economic development rate;
a new rate to attract highly efficient customers, such as data centers,
that need affordable, highly reliable electricity;
an aggregation rate that lowers energy costs for qualifying chain accounts
such as grocery stores; and
time-of-use options to work better with the operating schedules of many
entire rate review has been open, collaborative and inclusive of a broad range
of customer classes and stakeholders,” said Brandt. “Nearly 15 months after we
filed our initial proposal, we have a resolution that benefits our customers
and positions Arizona as a leader in smart energy policy.”
APS serves about 2.7 million people in
11 of Arizona’s 15 counties, and is the Southwest’s foremost producer of clean,
safe and reliable electricity. Using a balanced energy mix that is nearly 50
percent carbon-free, APS has one of the country’s cleanest energy portfolios,
including both Palo Verde Generating Station and renewable energy. The company
is also a proven leader in introducing technology and services that offer
customers choice and control over their energy consumption. With headquarters in Phoenix, APS is the
principal subsidiary of Pinnacle West Capital Corp. (NYSE: PNW). |
“Arizona’s energy consumers are the clear winners here because this agreement enables investment in a smarter, cleaner energy infrastructure, gives customers more choice and control through new rate options, and continues Arizona’s solar leadership.”
- Don Brandt, APS Chairman, President and CEO