Arizona Public Service is asking state utility regulators to approve a nearly 14% rate hike, or a monthly increase of about $20 to the average residential customer's electric bill beginning in mid-2026.
The utility is also seeking permission to adjust its rates more frequently under a formula rate plan, a controversial policy adopted by the Arizona Corporation Commission last year to allow electric, water and gas companies the commission regulates to seek yearly rate adjustments.
APS last sought a rate hike in 2022, when it requested a 13.6% increase.
Regulators on the Corporation Commission ultimately approved a lower rate increase, roughly 8%, last year, raising monthly residential utility bills by about $12.
In a statement, APS President and CEO Todd Geisler said the current rates – based on the utility’s operating costs from over three years ago – have not kept pace with what it costs to operate a reliable, resilient energy grid.
“Reliability isn’t optional – it’s essential, especially in Arizona,” Geisler said in a statement. “We must ensure the power is there when our customers need it most, and we thank them for trusting us with their energy needs. That is what this rate case and proposed adjustment are about.”
And the utility company argues that allowing annual rate adjustments, bypassing what it describes as costly and time consuming traditional rate cases, “would enable smaller, annual adjustments – up or down.”
A 14% rate hike would raise APS revenue by nearly $580 million annually at a time when consumer advocates have accused APS of prioritizing shareholder profits over customers. Pinnacle West Capital Corporation, the utility’s parent company, reported a net income of $609 million last year, up from $502 million in 2023.
APS is also requesting the Corporation Commission’s approval to alter its rate design for large industrial users, including data centers, “to ensure that the costs of serving large high load factor customers… are apportioned fairly and in a manner that does not place undue financial burden on residential and small business customers.”
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