Approximately 1.4 million customers across Arizona could soon see higher electricity bills.
Arizona Public Service, the state’s largest electric provider, is seeking a nearly 14% rate increase under a new policy adopted by the Arizona Corporation Commission on Dec. 3 that allows utilities to request annual rate hikes through a streamlined formula rate-making process, that bypasses the traditional, lengthier review. The policy statement allows Arizona’s 300 utilities to request annual rate increases using the formula rate-making.
On June 13, APS’s parent company, Pinnacle West Capital Corporation, filed a rate application under this new framework. If approved, the rate increase would take effect on Wednesday, July 8, 2026.
Utilities that opt into the formula-based system are still required to undergo a full rate case review every five years.
“For a typical residential customer using 1,000 kilowatt-hours of electricity, the net monthly bill impact would be about $20,” according to an APS press release about the proposed hike.
Supporters of the new rate change policy include all five of the Republican commissioners and industry groups, which argued that it will reduce regulatory lag and provide more predictable rates.
Critics like AARP Arizona, the Residential Utility Consumer Office and Arizona Attorney General Kris Mayes, a Democrat, warned it marked a major departure from over a century of utility regulation and could lead to higher costs.
“If APS’ 14% rate hike request is approved, Arizona consumers will pay an extra $20 on monthly electric bills beginning next summer,” Mayes wrote in a June 17 press release vowing to oppose the newest rate hike. “In 2024, APS increased rates by 8%, which raised the monthly cost of electricity by an average of $12 for Arizona consumers. Prior to that, APS hiked rates 8% in 2023 and 4.5% in 2017. Arizonans already pay more for electricity than consumers in 38 other states.”
“We understand rising costs are impacting so many aspects of customers’ lives today,” Ted Geisler, APS president and CEO, stated in a press release. “We also understand it is never a good time to see bills increase. That’s why we’re focused on doing our part to keep our costs down as much as we can, while giving customers tools, programs and choices to help them manage their bills.
“Reliability isn’t optional — it’s essential, especially in Arizona. 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.”
Comments submitted to the ACC from APS customers have been universally against the proposed new rates as of Sunday, June 22, among those is Sedona resident Bruce K. Misamore, who also voiced his concerns over solar customers on the APS grid.
“ACC needs to thoroughly review what they have allowed APS to charge their solar customers for accessing the APS system — over $80 per month for access is a ridiculous amount, particularly in the context of excess generations from my system going to the grid,” Misamore wrote to the ACC on May 27.
For more information visit aps.com/ratecase or visit the commission’s website at azcc.gov. Comments can also be submitted through the commission’s website at azcc.gov by clicking on “Meetings & Cases” and then clicking on “Make a Public Comment in a Docket,” and should reference Docket Number E-01345A-25-0105.
