APS Proposes New Rate Hikes
Summary
On June 13, 2025, APS filed a rate application with the Arizona Corporation Commission seeking approval for rate changes that would significantly affect both residential and commercial customers:
- Residential customers: average increase of 16.44%
- Commercial customers: increases ranging from 9.32% to 47.03%, depending on customer class
We fully expect the other Arizona Utilities to follow suit.
Formula Rate Mechanism (FRM)
APS is proposing a new Formula Rate Mechanism (FRM), which would:
- Use a formula to adjust rates annually based on the previous 12 months of costs
- Limit residential rate adjustments to 0.85–1.15 times the annual average change
- Allow five annual FRM adjustments before requiring APS to file a new general rate case
Residential Rate Design Changes
APS proposes raising the basic service charge to better align with the cost of serving different residential rate classes. This means:
- Higher Grid Access Charges for solar customers on current rate plans
- Increased revenue allocations for solar customers still on legacy rate plans
General Service Rate Design Changes
For commercial customers, APS plans to create new rate structures to reduce cross-subsidization. Specifically, the utility is targeting large, high-load customers such as data centers by:
- Adjusting cost-allocation methodologies
- Redesigning rates to ensure those customers pay more of the costs associated with their concentrated system demand
Actual Impact on Customers
The exact bill increase will depend on a customer’s rate plan and usage. For example:
- Time-of-Use 4PM–7PM Weekdays
- +9.17% increase in the basic service charge
- +16.6% increase to both off-peak and on-peak energy charges
- Fixed Energy Charge Plan
- +9.17% to +38.1% increase in the basic service charge (depending on tier)
- +14.7% to +16.9% increase in energy charges
📌 Example: A residential customer with an average $150 monthly bill would now pay about $208.22 — a steep jump with no added value from the utility.
Why This Matters for Homeowners & Businesses
This proposal underscores a hard truth: utility rates will continue to rise. With Congress eliminating the 30% federal solar tax credit starting in 2026, there has never been a better time to go solar.
By acting now, homeowners and businesses can:
- Lock in savings while the federal tax credit is still available
- Protect themselves from future utility rate hikes
- Take control of their energy costs by generating their own electricity
Solar remains the smartest long-term investment you can make in your home or business energy future.