Key Points

• A consumer advocate alleges APS’ residential customers paid $587 million for data center growth
• APS and the Corporation Commission say the advocate’s claims are misleading
• Democrats running for two Corporation Commission seats want an independent investigation

Concerns about who will bear the financial burden of data centers are rising, but Corporation Commission candidates are split over whether Arizona ratepayers are footing the bill for large load user growth. 

A consumer advocate, Abhay Padgaonkar, analyzed Arizona Public Service’s financial records and alleges residential and commercial utility customers paid $587 million between 2023 and 2025 for costs associated with data center growth. The analysis was first reported by 12 News. APS characterized its findings as “misleading claims” in a social media post Tuesday.

Meanwhile, candidates running for two open seats on the Corporation Commission are divided on whether the utility regulator should launch an independent review of whether data centers are truly shouldering the costs required to serve their electricity needs. 

Democrats Clara Pratte and Jonathon Hill, who hope to disrupt the Commission’s all-Republican majority, rallied with small business owners and residential ratepayers Wednesday to call for an investigation into Padgaonkar’s findings. 

“If you elect us in November, as soon as we take office, we will actually do the job of the Commission and immediately require APS to open their books and immediately require all the utilities to show us where our money is going,” Hill said. 

But incumbent Commissioner Kevin Thompson, who is hoping to be reelected, defended APS in a social media post Tuesday.

“Our utilities are listening to the @CorpCommAZ,” Thompson wrote. “Growth pays for growth, and that has been our stance since day one!”

A spokeswoman for the Commission said she could not make any commissioners available for an interview regarding Padgaonkar’s analysis, but said the Commission disagrees with its findings. In a statement, the Commission’s Executive Director, Doug Clark, suggested Padgaonkar chose not to participate in APS’ ongoing rate case to build an evidentiary record on data center cost shifts.

“The Commission is unable to comment on the evidence in APS’ current rate case as it is still ongoing,” Clark said. “However, historical data on the record in prior rate cases has shown that commercial/industrial customers have been subsidizing the costs for residential customers.”

In a statement, an APS spokesperson said Padgaonkar’s analysis oversimplifies a complicated cost-recovery mechanism. 

“[The study] ignores the many factors that drove higher fuel and power costs between 2022 and 2025,” APS said. “As a result, the analysis reaches conclusions that are inaccurate, misleading, and frankly harmful to APS customers.”

The company committed to allocate over 4,000 megawatts of electricity to data center customers in the future and is no longer adding new projects to its data center queue. APS is also seeking a 45% rate increase for large load customers in its ongoing rate case. 

APS has not publicly disclosed the number of data centers it powers, but told the Commission in April that it will deliver 13.1 gigawatts of electricity to those customers this year. Salt River Project currently serves 59 large load users, while Tucson Electric Power is expecting its first data center customer to come online in the next few years. 

Pratte and Hill argued that the Commission needs to take a deeper dive into APS’ claims, rather than taking their commitments at face value. Both warned that customers could be on the hook for the data centers’ infrastructure and power needs.

“There are several instances where you have these large load users [who] are the only customer on the [transmission] line, but it could be that the utility is saying, ‘Well eventually there may be other users, so we should spread out this cost,’” Pratte said. “Those types of system upgrades should be looked at in concert with the rate increases because I believe that’s where a lot of the fuzzy math is coming into play.”

Hill said he is concerned that utility companies are purchasing power from other energy providers to serve data centers, but attributing the cost of that power to all customers. 

“I would really want to look at … what time of day they’re purchasing this excess power, who they’re buying it from, what rate they’re getting, because that can drive a lot of the costs that we’re potentially seeing,” Hill said.