Phoenix, Ariz. —   The Arizona Corporation Commission values public participation and input during the ratemaking process and sincerely appreciates the dozens of people who have contributed their opinions in the ongoing Arizona Public Service Company (APS) rate case.  The Commission strives to share timely and transparent updates and provide background information on how rates are calculated.

"I understand that utility bills matter deeply to families, seniors, small businesses across Arizona.  I do hear the concerns about affordability, and I do take those very seriously,” said Chair Nick Myers, who attended the Wednesday’s Public Comment meeting.   “As Commissioners, we are bound by the Arizona Constitution to ensure just and reasonable rates, which means finding a balance that is both just and reasonable for both the utility and the customers of the utility.”

“It is vitally important that we hear from ratepayers throughout the APS territory during this rate case,” stated Commissioner Lea Márquez Peterson. “There are many ways to engage with the Commission including sending an email or participating in the public comment events. We are each listening very closely to ratepayer opinions on the complex issues within the rate case.” 

The rate case timeline can be broken down into eight steps:  1) Utility files an application, a docket is opened; 2) ACC Staff reviews the application and determines eligibility; 3) A hearing schedule is set; 4)  Parties apply to intervene in the rate case; 5) Discovery and public comments are gathered; 6) The Administrative Law Judge holds (ALJ) an evidentiary hearing where the utility, ACC Staff, and other parties present evidence under oath and cross-examination, typically over multiple days of hearings; 7) The ALJ drafts a Recommended Opinion and Order (ROO) based on the evidence and data presented by all parties during the hearing; 8)The Commission discusses the ROO at an open meeting, may propose amendments, and finally votes whether to approve the ROO.

At this time, the APS rate case is in step five of the process. There are more than two dozen intervenors—parties or organizations with a direct interest in the case. Each intervenor may file any evidence, testimony, or other discovery they intend to rely on to support a proposed rate that differs from APS’s request. All parties will present their arguments and evidence before the ALJ during the evidentiary hearing beginning on May 18, 2026, which is expected to last about eight weeks.  The start of the hearing marks the sixth step in the rate case process.

The ACC Staff performs a comprehensive audit of APS’s accounting practices and recordkeeping.  The Commission uses a fundamental equation in rate design to determine a utility's revenue requirement: 

Revenue Requirement (R) = Operating Expenses (E) + [Rate Base (Value - Depreciation) X  Rate of Return (r)

The outcome of the rate case reflects the combined application of standardized accounting methods, calculations supported by expert testimony, independent forecasting, market data, academic research, and detailed analyses of appropriate utility returns.

The constitutional responsibilities of the Commission is to establish just and reasonable rates, ensure the utility is providing safe and reliable services to its customers.  The Commission must adhere to its duty - simply denying a utility’s application on the basis of not wanting to increase rates would be a violation of the Arizona Constitution (Article 15). 

All documents related to the APS rate case can be found in the ACC’s eDocket system at https://edocket.azcc.gov/ , Docket No. E-01345A-25-0105.