Electricity is already the 2nd second-highest expense for many households, trailing only rent and surpassing even food. Constant rate hikes from our monopoly utilities like APS is making electricity more and more expensive and is seriously damaging the social determinants of health in Arizona.
Last week APS filed yet another rate increase request along with a proposal to make their return on equity even higher for their stock shareholders – proposing to raise residential rates by 14% and boosting their Return on Equity (ROE) entitlement to an eye-popping 10.7%.
Just last year APS asked for (and of course got) an 8% rate increase. True to form, the ACC also rubber-stamped their ROE entitlement to 9.55% the previous year’s 8.7%.
Their current unreasonably high return on equity level of 9.55% is already one of the highest in the country for a ‘regulated’ monopoly.
APS’ argument that these rate increases are needed for infrastructure development are disingenuous. The ONLY reason to raise the ROE entitlement is to be able to make even more profit for their wealthy Pinnacle West/APS stock and bond investors.
Meanwhile, APS’s parent company, Pinnacle West and their stock shareholders are on easy street – with $609M in profits in 2024, up from $502M in 2023.
Shareholders are celebrating the fact they know the Corporation Commission is captured by APS and will almost certainly give APS everything their hearts desire.
Make no mistake, this new rate hike and especially the increase in the return on equity are about Pinnacle West shareholder expectations and APS/Pinnacle West CEO Jeffrey B. Guldner’s compensation.
Electricity & the Social Determinants of Health
Public health isn’t just about access to care doctors and hospitals like many people think. It’s shaped by a range of social determinants like housing, food security, financial stability, and access to utilities.
When electricity costs continue to go up because a monopoly like APS can do whatever they like as they’re being overseen by a captured Commission the social determinants of health crumble.
High utility bills push people to the brink especially in the summer. Many families are forced to choose to keep the A/C on or pay rent. Miss a payment, and eviction or disconnection could follow… especially since our landlord and tenant act makes eviction super easy.
When electricity bills eat up more of a family’s limited income than food it causes emotional stress too. Parents worry about their kids’ safety and whether they’ll make it through another month. Chronic stress is a known driver of heart disease, depression, and poor developmental outcomes in children.
APS doesn’t have any competition. It’s a monopoly that’s supposed to be regulated by the Arizona Corporation Commission. Yet the ACC keeps greenlighting higher rates and richer shareholder returns, like the 9.55% return on equity it approved of last year.
That’s money being drained from Arizona households into the hands of Pinnacle West investors.
When the ACC rubber-stamps rate hikes and continually allows the company to collect more return on equity and higher rates they’re undermining the very conditions families need to survive. In a state where electricity can cost more than food, where there’s little affordable housing and where evictions are super streamlined – that’s unacceptable.
It’s time to stop putting stock investor profits over people. That means electing people to the AZ Corporation Commission who care about you more than monopoly utilities. Until we do, APS will continue to take us to the cleaners.
Vote carefully.
