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APS representatives discuss ongoing rate review case

8/24/16

Elizabeth Medora
Staff

NORTH VALLEY – APS customers may be seeing changes to their bills in summer 2017. APS is asking the Arizona Corporation Commission to approve a 7.96 percent increase in residential customers’ rates. APS’ proposal includes using demand-based rates, changing on-peak electricity hours, and restructuring solar plans for customers who install solar after July 1, 2017.

APS Director of Revenue Requirements Stefanie Layton spoke at the Aug. 12 New River/Desert Hills Community Association Town Hall meeting. Layton said at the meeting that APS is reaching out to the community to communicate the proposed changes’ potential impact to customers. Layton noted that the Corporation Commission decides APS rates and that the last rate review took place five years ago.

“It is important that we can continue to serve you reliably and support the infrastructure we need for our customers,” Layton said.

Layton noted that the requested rate hike would equal an additional $11 per month for the typical customer. However, the result of the request is up to the Corporation Commission, which can deny, approve, or provide an alternative option to utilities’ rate requests.

“We never get exactly what we asked for,” Layton said.

According to Layton, solar customers are not currently paying all of the costs serving them incurs. She noted that 70 percent of APS’ costs are fixed but that customers’ bills are 90 percent variable. Layton said that the “grid that a solar customer uses is still there. Other customers pick up the difference.”

Layton said that the current rate structure will “collapse on top of itself at some point in time,” adding that APS wants a structure that can support renewable energy into the future.

The APS solar proposal would give new solar customers modified net metering. Right now, solar customers export and sell extra power to APS at “retail rate,” according to Layton; the new proposal would change that retail rate to “market rate”. If the proposal goes through, APS will pay solar customers 3 cents per kilowatt hour for the extra energy they produce, instead of the current rate of 14 cents per kilowatt hour. Current solar customers and those who enter a completed application before July 1, 2017 will be grandfathered in with the rules in place at the time of their connection, and this grandfathering clause will remain for 20 years from the time of connection.

For customers who are on the 12-7 p.m. on-peak plan, on-and-off-peak changes are expected. In the proposed new plan, APS’ on-peak time would be 3-8 p.m. The grandfathered in 9 a.m.-9 p.m. on-peak plan will be going away. Four new off-peak all day holidays will be added. Proposed plans will have three components of charges: basic service, energy, and demand charges. Layton said there would be an option for low-use customers, and the equalizer plan would still be offered. A flat bill rate with a guaranteed price every month would also be offered.

Layton said demand charges would only be measured during on-peak hours. Staggering the use of major appliances, such as air conditioners, electric dryers, and ovens will lower total demand charges and can help reduce the electric bill.

But consumers who are already turning off their AC during on-peak hours and avoiding use of appliances, lights, etc., and already doing their best to use minimal on-peak electricity are concerned about how the new demand charges will affect them.

A commenter at the Aug. 12 meeting noted that she already avoids major appliance usage during on-peak time. She and others objected to the new on-peak time. She noted her family already waits to make dinner, do laundry, etc., until after 7 p.m. so that the oven doesn’t run during on-peak time, and she doesn’t want to move that forward to 8 p.m. or even later, should APS change its times again.

“Why not let the consumer choose their peak hours?” she asked.

Layton said that under the new plan, customers would not see their bills fluctuating wildly. Right now, consumers pay four times more for on-peak electricity than off-peak. Under the new structure, they’ll pay two times more instead.

“Off-peak will go up a little bit, but most of the difference will go into the demand component,” Layton reported.

New River resident Nancy Santori has filed comment with the Arizona Corporation Commission opposing the proposed demand plan.  

“I am against allowing a demand rate plan for APS because their smart meters are not accurate enough to provide a fair system,” Santori wrote in her Aug. 15 filed case opinion. She referenced a recent power outage, saying her household was charged for power usage when the power was actually out, then no power was charged to their account when she knew they had used some.

“Assuming the meter measured the amount of power correctly but charged it to the wrong period of day when the rate is high, we will be billed about $4 more than we should be,” Santori wrote. “If we were on a demand plan, the error would cost us a lot more.”

At the Aug. 12 meeting, Anthem resident Roger Willis suggested that APS get a rate calculator for the new plans on their Web site so that customers can input their demand usage and get an idea what their rates would be under the new proposal.

“I would love to take my last year’s demand and plug it into a calculator to show me these demand charges and what it’s going to look like,” Willis said.

Layton said that such a calculator is in the works and that they’re working with the IT department about it.

Layton called rate increases “not something that we take lightly” and noted that the proposed rate increase is below standard inflation.

“We do really try,” Layton said, as she concluded her presentation at the Town Hall meeting.

See APS’ proposal online at www.azenergyfuture.com. See information on rate case at http://edocket.azcc.gov – search Arizona Public Service Company.