Rampant corporate greed enabled by lax oversight was already running Arizona’s ratepayers into the ground. 

Arizona Public Service collected $1.1 billion more than in 2022 after major rate hikes in 2023 and 2024, while Tucson Electric Power’s profits surged 33% following a 10% increase in August 2023. 

Now, APS aims for an extra $580 million and a 14% rate hike, while TEP seeks $172 million more, as both are setting the stage for future increases on an annual autopilot. 

Growth ain’t paying for growth

APS has justified a substantial rate hike by claiming it’s necessary for growth and grid reliability, but CEO Ted Geisler’s “growth pays for growth” schtick unravels under closer scrutiny.  

Data centers present an existential threat to the power grid. With over 10,000 MW of energy requests pending, demand from just a couple of large data centers could exhaust APS’s entire allocation of 1,146 MW from Palo Verde!

While the weather-normalized average business usage skyrocketed by 9% in a single year, the average household consumption decreased by 1%, with businesses accounting for 91% of the overall growth, primarily due to the data center demand surging at a 100 times faster rate.

Despite this, residential rates increased by 7.4%, more than double the hike for non-residential customers, while industrial rates even dropped by 1.8%, and commercial customers only faced a 3.5% increase. 

Captive homeowners also pay peak rates over three times higher than the sweetheart deals for data centers, with some large customers allowed to bypass APS’s exorbitant prices and purchase cheaper power from third parties. 

No amount of rationalization from data center lobbyists will ever justify struggling homeowners subsidizing Big Tech. 

Corporate greed makes affordability impossible

APS wants us to believe that rapid growth and reliability make exorbitant prices inevitable. It is a ruse. 

Despite flawed claims by the Arizona Corporation Commission about Arizona having the second lowest energy costs, the state ranked 7th highest in total energy price, with the three for-profit monopolies charging more than in 38 states. 

In contrast, SRP, a large utility with similar customer demand as APS but not regulated by the commission, had among the lowest rates in the Southwest and has consistently ranked as a top utility in the nation for reliability and customer satisfaction. 

In 2024, APS prices were 25.4% higher than SRP’s, costing customers an extra $1 billion annually for the same amount of electricity.

While SRP plans a modest 2.4% rate increase, APS and TEP are seeking a shocking 14% hike—nearly six times as high. The new rates could make the APS price premium, an unconscionable 40% over SRP for the same commodity.

SRP, a not-for-profit utility, demonstrates that top-notch reliability, customer satisfaction, and affordability can coexist—but only if corporate greed and rubber-stamp regulators are removed.

Putting profits over people

The toxic combination of greedy monopolies and utility-friendly regulators has already led to dire consequences.

In 2024, APS shut off power to 46,000 customers —double the 2021 figure—and wrote off  $33 million as uncollectible revenue, three times the pre-pandemic level as a percentage of revenue. 

Following a 2017 rate increase, two customers died from shutoffs, including Stephanie Pullman, who owed just $52, an amount APS CEO Don Brandt earned in 30 seconds.

In 2024, 82-year-old Kate Korman also died after being disconnected for a $500 bill, while APS CEO Jeff Guldner’s pay tripled from $5.5 million in 2021 to $17.2 million in 2024, driven by rising company profits. 

Meanwhile, Pinnacle West, APS’s parent company, outperformed industry benchmarks for shareholder returns each year since 2022 and raised dividends for 13 straight years, distributing $400 million in 2024.

More devastation coming

Kevin Thompson, the commission chair, seems absurdly concerned about APS filing for bankruptcy. 

This is for a monopoly worth $10 billion with $26 billion in assets, $5 billion in revenue, the second-highest median pay in the state, and a guaranteed profit margin of 9.8%. APS says this return on equity isn’t high enough and should be 10.7%!

Are we to fall for the misinformed fearmongering that thousands will die unless we pay APS the ransom?

A grave concern is that the rubber-stamp regulators have already fallen prey to the propaganda from the powerful monopolies and have consistently neglected consumer interests.

Don’t hold your breath for any meaningful ratepayer protection from this captured commission.

The seismic shock from the outrageous APS and TEP rate hikes, coupled with the critical LIHEAP lifeline to the most vulnerable being DOGE’d, will only serve as a deadly one-two punch.

Abhay Padgaonkar is a longtime consumer advocate who has served as an expert witness on behalf of ratepayers.