Under its current composition, the Arizona Corporation Commission (ACC) has never met a utility rate hike it doesn’t like. Its recent decision to grant Arizona Public Service (APS) a 14.56% rate hike was just the latest in a flurry of hikes rubberstamped by the commission.
It’s like a twisted version of the movie Groundhog Day , where the same scenario replays over and over again. With every rate case that comes before them, the commissioners give perfunctory lip service to consumer concerns, quickly pivot to utility talking points about grid reliability, then approve the rate increase.
The 7.6% Southwest Gas (SWG) rate hike the ACC approved last yearwhich came on the heels of a 9.7% hike for the company in 2021 resulted in a $61.7 million windfall that represents the largest revenue increase in company history.
In fact, the SWG boasted to its shareholders that the record revenue increase was “
driven by new base rates effective February 1, 2023, in Arizona .” Or in other words, sucked out of its Arizona customers’ bank accounts.
During the hearing for that historic 2023 SWG rate hike, ACC Chairman Jim O’Connor suggested an amendment requiring the company to wait a couple years before the next hike request, but the notion was quickly rebuffed, with SWG doubling down and promising to be back in 2024 with yet another request.
And sure enough, they’re back as promised. The utility has bellied up to the trough again with yet another rate hike request before the ACC. This time SWG is asking for an even larger 12% increase, which would boost its revenue by more than $125 million.
The company is making this huge hike request despite the fact that
SWG’s 2024 net income came in?
“$24 million ?above the ?$225 million ?high end of our expected range .
The ACC’s hike-happy binge isn’t limited to SWG, a company Commissioner Kevin Thompson worked for as its business manager, or APS.
Back in August, the commission approved a 10% hike for Tucson Electric Power (TEP). The TEP hike came despite the utility’s profits increasing from $191 million in 2020 to $217 million in 2022.
That’s not all. Over the past two years the ACC has granted APS, SWG, and TEP fuel cost adjustment surcharges that alone can boost customer electric bills by more than $100 per year. The commission has also approved measures that increase energy costs for rooftop solar and electric vehicle owners.
It seems no matter how valid public concerns are about these rate hikes, what is included in them, or how profitable Arizona’s monopoly utilities are, the ACC cannot be dissuaded from rubberstamping any rate increase the utilities request.
This is all particularly ironic given that Commissioners Thompson and Nick Myers both ran for election on a promise to keep Arizona’s energy prices low. Instead, they have done the exact opposite, raising your electric and gas bills every chance they get.
It appears to be a masterful bait-and-switch to deceive voters. Since that pair was elected, virtually every major ACC action taken has been in furtherance of enriching monopoly utilities at ratepayer expense.
Another irony is that the original decision for Arizona to have an elected utility commission, rather than one appointed by the governor, was in part to reduce the opportunity for corruption and avoid the appointment of officials who are too cozy with industry.
In this case, being too cozy with industry is all the more problematic because it means being too cozy with large monopolies that are exempt from not held in check by free market competition.
As monopolies, each of these utilities have a captive customer base. You cannot switch providers because APS, TEP, or SWG are charging too much. The only entity with the authority to look out for your interest as a ratepayer and keep rates reasonable is the ACC.
When that body functions like the preverbal
fox guarding the henhouse, repeatedly sacrificing the financial health of ratepayers to enrich fat cat monopolies and their out-of-state shareholders, we all lose.
David Jenkins is president of Conservatives for Responsible Stewardship, a national organization with more than 1,200 Arizona members .
Copyright © 2024 BridgeTower Media. All Rights Reserved.
Most Popular
Comments / 0