Arizona regulators OK belt-tightening in utility rate case

Arizona utility regulators considering a rate case for Arizona Public Service Co. have voted to abolish a fee paid by customers with rooftop solar panels and to not make customers pay for some of APS’ spending on a New Mexico power plant.

Various changes that the Arizona Corporation Commission has approved so far in the ongoing rate case would reduce APS’ annual revenue by an estimated $125 million, the Arizona Republic reported.

The commission on Wednesday approved several changes that followed others. The commission plans to vote on the rate package on Nov. 2 when it expects to receive calculations of the financial impacts for APS and its customers.

The regulatory panel sets rates and decides certain operational matters related to rates for Arizona’s investor-owned utilities.

Elimination of the “grid-access charge,” which was implemented in a 2017 rate case, would save an APS customer with a 7-kilowatt-hour rooftop system $7 a month.

The commission voted to not permit APS to charge customers for $215.5 million of its i$450 million in spending on environmental controls for the Four Corners Power Plant near Farmington, New Mexico.

APS has tried to recover the Four Corners expense since its 2016 rate case, but the commission approved an amendment saying that spending the $215.5 million was imprudent because APS now plans to close the plant nearly a decade earlier than anticipated.

In other changes approved Wednesday, the commission voted:

– To shorten to three hours from five the “on peak” time period for time-of-use electricity plans.

– to provide $10 million to communities, including the Navajo and Hopi tribes, affected by closing coal plants.

The commission previously voted to reduce the potential profits of APS by trimming the company’s authorized profit on its expenses to 8.7%, down from 10%.

The company earlier this week threatened to sue if the commission’s cuts are too severe.