APS plans to repay 12,000 customers

Online rate tool may have given bad advice

Arizona Public Service Co. will repay about 12,000 customers who are not on the cheapest rate plan, possibly because they acted on bad advice from APS itself, the company said Tuesday.

The company couldn’t estimate how much money customers would be credited, but it could be substantial for some, based on major differences in how rate plans charge customers for electricity.

“The credit will be equal to the difference between what they have paid since switching plans and what they would have paid had they been on their most economical plan,” APS said in a letter to state regulators late Tuesday.

APS will alert affected customers. Individuals will then need to contact the company to switch plans and work out the credit, the letter said.

APS confirmed last week that an

online “rate comparison tool” the company provided on its website was doling out bad information, encouraging some customers to move to plans that would actually cost them hundreds of dollars more a year.

The tool was intended to show customers what they would pay on different price plans, taking into account their actual usage in the last year.

But some customers using the tool realized the recommendations were wrong.

The problem didn’t just affect the online tool, but also letters that APS sent to some customers, the letter to state regulators said.

APS officials on Tuesday said they are not sure how many people relied on advice from the online tool or letters.

What the company does know is that 12,000 people have made bad choices when switching plans since the problems began in February, and are now not on their most economical plan.

APS pulled the tool off-line last week after learning of the problem from The Arizona Republic and delayed the rollout of a new feature that would compare rate plans for customers online and printed on monthly bills.

APS still hasn’t figured out what went wrong with the tool, which was developed by a company called GridX, but it has determined the problem has affected recommendations since February, spokeswoman Jenna Rowell said.

Rowell said Friday that APS has actual usage data from customers that is valid and that the problem was isolated to the online tool. The payments from APS will be based on that valid data, she said Tuesday.

Arizona Corporation Commission member Justin Olson recommended APS offer rate-plan comparisons on bills and the commissioners in June ordered the utility to do so. Olson said he was frustrated both with the amount of time it has taken to offer the feature and the revelations that APS has given bad advice to customers.

One of the customers who realized the online APS tool was giving bad advice wrote a letter to commissioners and called Olson last week.

“APS, the Commission and media outlets alike have all been encouraging ratepayers to utilize this tool to ensure that they know which plan would be the lowest cost for the customer based on their actual energy usage history,” Olson said in a letter Friday to APS.

“It is shocking to learn that APS provided at least two ratepayers who followed this admonition with inaccurate information.”