Utilities

APS to pay $24 million back to customers in rate plan flap

Posted 2/22/21

Arizona Public Service Co. will pay tens of thousands of customers a cut of $24 million in an agreementover a billing issue revolving the utility's rate structure implemented nearly four years …

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Utilities

APS to pay $24 million back to customers in rate plan flap

Posted

Arizona Public Service Co. will pay tens of thousands of customers a cut of $24 million in an agreementover a billing issue revolving the utility's rate structure implemented nearly four years ago.

The deal, announced by Arizona Attorney General Mark Brnovich, has the state's largest utility paying the money to roughly 225,000 customers for not having the customers on the rate plan that would have cost them the least.

"Today's historic and consequential settlement provides $24 million t more than 200,000 Arizonans who may have relied on inadequate information from APS," Mr. Brnovich said in a statement.

APS received approval for a new rate structure in 2017 from the Arizona Corporation Commission. Under the plan, the utility was required to educate its 1.1 million customers about changes to its rate plans.

The challege was there was an error in APS' rate calculation tool that was recommending customers use plans that were costing them hundreds of dollars more per year. There also was a letter sent in 2017 to customers that may have impacted their plan choice.

Under the agreement, the money will be divided:

  • $20.7 million to up to 210,000 consumers who APS estimates were not on their most economical plan as of the March 2020 billing cycle and would have saved $120 or more over the previous 12 months. This group of consumers will receive a per capita payment of at least $98. 
  • Up to $3.3 million to approximately 17,500 consumers who may have been affected by the data error in the 2017 letters. This group of consumers will receive a varying restitution payment based on the extent of the likely effect on the consumer resulting from the data error. 
  • Restitution will be provided in the form of checks (or possibly bill credits) and will be made within four months of the court’s approval of the consent agreement.
  • APS previously compensated consumers impacted by its rate tool errors. The restitution announced today is separate and in addition to those refunds.

APS also will be required to cover the $200,000 cost of the investigation and another $550,000 to promote the Attorney General's Office's consumer and community outreach awarness and prevention programs.

Residential customers with questions about their rate plans should visit aps.com or call APS directly at 602-371-7171 or 800-253-9405.

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