Attorney General Kris Mayes has submitted expert testimony to the Arizona Corporation Commission challenging Arizona Public Service’s (APS) proposed 14% rate increase. The filing asserts that the hike could be limited to 3% while maintaining reliable service and a strong credit rating for the utility.
According to the expert analysis, APS is requesting shareholder profits that exceed what is necessary to maintain reliable service. This would result in an estimated $524 million per year being transferred from Arizona customers to APS shareholders.
“APS is asking Arizona families to foot the bill for shareholder profits that far exceed what any reasonable investor requires. This is just corporate greed run amok,” said Attorney General Mayes. “Our expert analysis proves that customers are being asked to pay far more than is needed. Instead of a 14% rate hike, the expert testimony we just filed with the ACC shows that APS can achieve the same reliability with just a 3% increase by aligning what customers pay with APS’s actual costs.”
The Attorney General’s expert witness reviewed APS’s request and concluded that:
– The proposed shareholder profit level surpasses what is needed to attract investment in current market conditions.
– Adopting an alternative proposal based on actual cost of capital could save customers $524 million annually.
– Each residential customer would save about $220 per year compared to APS’s original proposal.
– The requested 14% rate increase could be reduced to 3%, without compromising investor compensation or credit ratings.
– Some financial models used by APS rely on assumptions considered unrealistic or economically impossible.
The analysis found that when using market-based assumptions consistent with modern finance, the calculated cost of equity was much lower than what APS proposes.
“What APS is proposing is a half-billion-dollar annual transfer of wealth from Arizona ratepayers to its shareholders,” said Attorney General Mayes. “Arizonans are already stretched thin. They shouldn’t be paying a premium on their electric bills so APS can deliver outsized returns to its investors.”
Independent evidence cited in the testimony—including investment firm forecasts and academic research—suggests authorized returns for utilities in Arizona and across the U.S. are higher than required by investors.
The Attorney General’s office maintains that lowering the allowed return would not impact service reliability or weaken APS financially, as savings would come from adjusting charges rather than cutting maintenance or infrastructure spending.
“Arizonans should not have to choose between keeping the lights on and keeping their bills affordable,” said Attorney General Mayes. “APS can remain financially strong, attract investment, and maintain reliable service — all while charging customers a whole lot less. That’s exactly what we’re asking the ACC to require.”
The Arizona Attorney General’s Office acts as the state’s chief legal entity, providing advocacy and protection for residents statewide through various services including addressing civil rights violations, elder abuse, cold cases, fair housing initiatives, and accountability measures for social media companies.
Kris Mayes serves as Arizona’s 27th attorney general and is recognized as the first mother in this position.
A copy of today’s filing can be accessed online.