The Arizona Corporation Commission, the state’s utility regulatory body, began its first evidentiary hearing on May 18 on Arizona Public Service’s request to raise customer rates by roughly 14%.

The hearings are scheduled to end on Tuesday, June 30 and, if approved, would increase customer’s monthly bills by at least $20.

“Today’s rates were set based on costs incurred in 2021 and 2022, and costs have risen sharply since then,” according to APS’ website that cites the price of insulators on power poles increasing by 111% over the last five years among similar rising material costs. “This proposal brings rates closer to current costs of service and supports ongoing investments made to meet demand and improve reliability.”

APS has proposed a rate increase of more than 45% for extra-large energy users such as data centers, plus an annual review, it said so other users are not paying for data centers’ electricity costs.

In December 2024, the ACC approved a policy statement that would allow utilities to request annual rate increases through a formula rate mechanism and would require a full rate case to come before the commission every five years.

The Residential Utility Consumer Office, a state agency that advocates for ratepayers, sued to block the formula rates in Maricopa County Superior Court, but the court threw out the case on June 13, 2025.

RUCO appealed, and the Arizona Court of Appeals ruled in November that the ACC couldn’t approve the policy as a minor internal change, rather the ACC may have been required to hold public hearings before adopting it. The ACC then appealed to the Arizona Supreme Court, which sent the case back to the Maricopa County Superior Court.

“We’re proposing to use formula rates in the future, to make rate adjustments, either up or down, based on the previous year’s expenses and investments,” APS wrote.

The formula-rate policy isn’t the only part of APS’s request drawing opposition.

“APS is asking Arizona families to foot the bill for shareholder profits that far exceed what any reasonable investor requires,” Attorney General Kris Mayes [D] wrote in a March 3 press release, announcing her office had filed testimony with the ACC. “This is just corporate greed run amok. Our expert analysis proves that customers are being asked to pay far more than is needed. Instead of a 14% rate hike, the expert testimony we just filed with the ACC shows that APS can achieve the same reliability with just a 3% increase by aligning what customers pay with APS’s actual costs.”

The commission previously approved 8% APS price increases in both 2023 and 2024. APS’ parent company, Pinnacle West, posted $600 million in profits in 2025, a market cap approaching $12.5 billion.

“The utilities can come in and ask for whatever kind of rate increase they want,” ACC Chairman Nick Myers [R], said at the May 18 public comment session. “That does not mean that they are going to get everything they ask for. As a matter of fact, I have never actually seen that happen. Contrary to popular belief, we as commissioners do not have the option of simply saying ‘no’ to a rate case as much as we want to, we just don’t have that option. We are required to set just and reasonable rates, which is a balance between the utilities’ viability and keeping the rates as low as possible.”

Consumer comments to the ACC have been nearly universally opposed to this latest round of proposed rate hikes.

“Please do not approve any increases for electricity costs by APS in the near or far term,” Sedona resident Julie Williams wrote to the ACC. “Rates have been rising sharply in the past few years, to the point that people like me — retired, voting in every election — are cutting back on the most basic necessities of living because we must pay for air conditioning in order to survive in the ever-increasing heat in Arizona.”

Much of the public comments focused on the affordability issue for seniors and people on fixed-incomes.

“It is unconscionable that APS is not required to operate within federal cost-of-living guidelines. COLA for 2026 … has been set at 2.8%,” Cottonwood resident Hines Metz wrote. “APS claims they need a 14% rate increase to cover their operating expenses — this is excessive. The rest of us don’t have the luxury of receiving handouts like this. We need to survive within our means. For me, Social Security is tied to COLA.”

APS filed its Rate Case Application on June 13, 2025 and four public comment meetings were held in January and February, with the Commission anticipated to vote and issue its decision in December, and the new rates, if approved, would go into effect in early 2027.

Visit aps.com/ratecase for more information.