New APS boss apologizes for misguiding customers on rates

The new Arizona Public Service CEO offered a mea culpa before the Arizona Corporation Commission on December 11 over a faulty rate comparison tool that misguided 10,000 customers about the most cost-effective rate plan.

Jeff Guldner, who took over the reigns as CEO from Don Brandt on November 18, appeared before the commission for the first time since he took the job. He was joined by other top level APS employees.

APS had already vowed to provide credits back to the affected customers, originally estimated at 12,000, and $25 on top of that “for their trouble.” 

Stacey Champion, the activist and frequent APS critic, called that offer “insulting.” 

Through the day-long hearing, an offer was extended to Champion from APS officials to bring her in as a stakeholder to be there for future meetings to express the concern she has pushed for months about how APS goes about its business misinforming its customers.

Champion was crucial in exposing this problem and the reason why APS became aware of the rate comparison tool being a problem in the first place. She had sent emails to the utility and called with her concerns only to find out a customer service representative did not have accurate information. Champion recorded the call and subsequently brought it to the commissioners. 

When APS said it became aware of the issue, the tool was removed from its website.

“We have not met your, nor our own, expectations, in helping our customers understand their rate options,” Guldner said. “For this I want to personally apologize to customers affected by that error. It is our responsibility to do better, and you have my commitment that we will do better.”

APS hired The Brattle Group to audit the tool to make sure it would work properly from now on.

The APS officials said the online comparison tool was using incorrect on-peak hours for customer rates. It was supposed to be measuring on-peak as 3 to 8 p.m., but instead was measuring between 2 to 7 p.m.

Ted Geisler, the utility’s chief information officer, said he has a pre-cooling set up for his air conditioning where from 2 p.m. to 3 p.m. he has the power going hard so it can remain off for the next five hours. 

If others participated in the same tactic that one hour would be using a lot of power resulting in higher monthly bills because the data was being measured incorrectly. This resulted in the 10,000 customers paying roughly $100 more per year, and in one customer’s case – nearly $1,000 more. 

Commissioners acted in unison with their questions and comments for APS, clearly all five were frustrated with how everything unraveled. 

Commissioner Boyd Dunn brought up how there wasn’t just the problem of the rate comparison tool giving bad information, but several customer bills somehow appeared online for the public to see.

Dunn said either one of these instances is problematic by itself, but both together is “unacceptable.” It was Dunn’s original letter to the other commissioners that brought Guldner in for his first public questioning less than one month into his tenure. 

Lea Marquez Peterson, Gov. Doug Ducey-appointed commissioner, told APS it’s “exhausting” dealing with problems that seem to be a common occurrence for the company.

“These miscues seem to be the status quo,” she said. 

Commissioner Sandra Kennedy, not so subtly, made a passing reference to Guldner’s predecessor in her opening remarks. 

“Your predecessor left you with several messes to clean up and an entire company’s reputation to rebuild,” Kennedy said to Guldner, before wishing him luck. 

After several hours of questioning the commissioners decided they were not going to vote on anything until maybe next month at the earliest, much to the chagrin of Champion. 

Champion said she expected to see action taken right away rather than wait another month before any progress was made from commissioners. She said she’s tired of the commissioners always taking things at face value from APS “given everything that they have said and done.” 

She pleaded that the commissioners do their job. Repeating “do your job” to the five of them several times during the waning minutes of the meeting. 

Champion thanked Commissioner Justin Olson for deferring his time, allowing her to speak and ask questions and she even commended APS for admitting it screwed up.

“It’s nice to see some culpability,” she said. But, she added, “If we walk out of here today without any action, then what is the point of being here?” 

Olson agreed and wanted to take action. He brought up his letter asking for an independent investigation into APS to verify facts and remedy to customers who still might not be aware their bill was affected. APS even agreed to foot the bill of the investigation where the commission could pick the third-party. 

The other commissioners were on board with Olson’s request, and while there was no vote, commissioners directed staff to move forward with hiring a third-party investigator.

Guldner is set to return in January, but this time to discuss political spending by APS.