Arizona Regulators OK Utility Rate Hike

PHOENIX (AP) — Arizona utility regulators elected with confirmed or suspected financial backing from the state’s largest electric utility on Tuesday approved a rate increase for the company and cuts to how much its new rooftop solar customers will be paid for excess power.

The 4-1 vote by the Arizona Corporation Commission comes months after the utility, Arizona Public Service, reached a deal with solar and consumer advocates over its planned increases. The deal allowed smaller rate increases and cuts to what the utility pays rooftop solar customers than it originally proposed.

The average homeowner will pay about $6 a month more starting Saturday and higher basic service charges, giving the utility a 4.5 percent increase from those customers.

The company originally sought an 11 percent increase last year. The company, which serves 1.2 million residential and commercial customers, had proposed commercial rate increases of between 1 percent and just over 6 percent, but settled for a 1.9 percent average for that group.

An administrative law judge largely agreed with the proposal and the commission vote formally approved it.

Commissioner Bob Burns was the sole no vote. He has been taking on the utility and its parent company, Pinnacle West Capital Corp., in court to force it to fully reveal its political spending. The other four commissioners have refused to back his efforts and on Tuesday rejected his push to delay the decision.

Burns criticized his colleagues, saying he had “offered the commissioners a final reminder and opportunity to do the right thing to meet their constitutional duties and allow me to do mine by using the powers delegated to me by the framers of the state Constitution and the Legislature.”

“It appears I will not see that change and will now need to rely on our courts to enforce my rights and the other commissioner’s duties,” Burns said.

Commissioner Andy Tobin did not take Burns’ comments in stride.

“During this time period, several large issues have occurred that deeply alarm me,” Tobin said. “And of course the attacks by Commissioner Burns on his colleagues, the degradation he believes is appropriate, I’ve never seen before. But that doesn’t mean it’s not something to be expected into the future.”

As a regulated monopoly, Arizona Public Service is allowed a fair rate of return on its capital costs. Burns noted that when the utility provided its costs and they were reviewed by the commission staff and the panel’s ratepayer advocate, both came out with recommendation for no increase or a reduction, Burns said.

Pinnacle West spent $4 million last year to back Burns and two other Republicans who won election in November using an independent expenditure committee formed by the company.

The company is also widely suspected of spending $3.2 million to back the other two Republicans on the panel in 2014. The company disclosed in public filings a year ago that it has received federal grand jury subpoenas seeking information on the 2014 commission and secretary of state elections but has neither confirmed nor denied the spending.

Existing rooftop solar customers will keep “net-metering” rates that pay them full retail costs for electricity sent back to the grid for 20 years. New customers will get substantially less, though more than initially proposed.

Solar companies oppose the cuts but were prompted to negotiate by a December commission decision that would end net metering for new customers once the regulatory body sets new rates. They would mainly be based on wholesale rates companies pay for power from commercial solar plants.

Arizona Public Service originally proposed in June paying 3 cents per kilowatt-hour to new solar customers, a huge cut from the current 14.5 cents per kWh. The agreement sets a rate of 12.9 cents per kWh, but that rate is adjusted down each year by as much as 10 percent until it reaches commercial rates. When new customers sign on, their rates would be locked for a decade.

The utility has seen its stock soar about 50 percent in the past two years. Profits went up by 11 percent in the past three years to $442 million in 2016 on flat revenue of about $3.5 billion.

The rate increase boosts revenue by about $94 million a year.

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