APS denies claim showing customers paid $587M for data center growth. Analysis says otherwise.
A 12 News analysis of Arizona Public Service records alleges that data centers and other large electricity users avoided approximately $587 million in power costs, shifting $314 million to smaller businesses and $273 million to residential customers. APS disputes the methodology and says its growth-pays-for-growth approach properly allocates costs, while experts cited by 12 News say the findings warrant a regulatory investigation.
A 12 News investigation examined APS's power supply adjustment fee, which has risen sharply over the past several years and is paid by residential customers, small businesses, schools, churches and large commercial users. Analyst Pat Gowkar estimated that 117 of the largest commercial and industrial customers, including data centers, avoided about $587 million in costs compared with an allocation based on the expenses they allegedly caused. The analysis attributed $314 million of the resulting cost shift to smaller businesses and $273 million to homeowners and renters.
APS CEO Ted Geisler has said the utility's priority is serving existing customers and that growth should pay for growth. APS rejected Gowkar's methodology, saying it does not reflect how costs were incurred, allocated or recovered, while declining to answer several detailed questions about its records. Two utility and regulatory experts reviewed the analysis and supported its methodology, and Arizona Senate Minority Leader Priya Sundarishan said APS should open its books and refund customers if ratepayers were improperly charged; the report's author is seeking a regulator-led investigation.