The Sierra Club and Synapse Energy Economics released a report titled Passing the Buck, which analyzes the impact of Arizona Public Service (APS) expanding its natural gas infrastructure. The study highlights how the utility's reliance on gas affects customer bills and suggests implementing a fuel cost-sharing mechanism to mitigate financial risks for ratepayers.
APS is currently seeking a 14 percent rate hike, which would raise the average residential utility bill by approximately $240 annually. This request marks the third potential increase in five years. Additionally, the company is proposing a formula rate system that would allow for annual price adjustments with reduced regulatory oversight and public participation.
The utility is expanding its fossil fuel operations, including the planned Desert Sun Power Plant and the Redhawk Expansion Project. The latter involves constructing eight new methane gas-fired turbines in Maricopa County. The report notes that these projects coincide with the company scaling back its clean energy targets and abandoning plans to retire the Four Corners coal plant by 2031.
Analysts argue that the current model allows APS to pass 100 percent of its fuel and purchased-power costs directly to consumers. By requiring the utility to share a portion of these costs, advocates believe the company would have a stronger incentive to transition toward renewable energy sources and reduce its long-term dependence on volatile fossil fuel markets.
