Arizona Commissioner Says Retail Competition A Solution To Challenges Customers Are Facing At APS

In a memo in advance of a June 18 meeting, Arizona Corporation Commissioner Justin Olson said that, "I believe retail electric competition is an appropriate solution to the challenges ratepayers are facing with APS [Arizona Public Service]," referencing issues related to educating APS customers about a menu of new tariff options (with various levels of flat monthly charges, demand charges etc.) that were previously implemented.

At the June 18 meeting, the Commission is scheduled to discuss APS's customer education plan, and the attendant customer experience, associated with the movement of customers to various new rate plans (tariffs) that were previously instituted.

A report prepared for ACC Staff by consultant Barbara Alexander found that, among other things, "... data suggests that APS's communications designed to educate customers about their 'best' or 'most economical' plan have not been successful."

The report noted that only 22% of APS residential customers affirmatively chose a "best" plan during a transition period for which the APS education plan was developed

ACC Chairman Bob Burns called the report a, "scathing assessment," of the APS education plan, and noted the possibility that APS is overearning, due in part to APS's possibly inadequate education plan.

Burns has called for solutions to keep customers harmless due to the inadequate education plan.

Olson said in the memo, "I agree ... that Arizona Public Service's ('APS') customer outreach and education program ('COEP') has not been successful. Barbara Alexander's report prepared on behalf of the Arizona Corporation Commission's ('Commission') Utilities Division Staff revealed not only a flawed COEP, but more fundamentally a flawed rate system."

Olson requested that retail electric competition be included as a possible topic of discussion at the June 18 Open Meeting, and the retail competition docket was added to the agenda (RE-00000A-18-0405).

Olson said in the memo that, "I believe retail electric competition is an appropriate solution to the challenges ratepayers are facing with APS. That is why I requested retail competition be added to the agenda. It is my hope that in addition to discussing how to improve APS's COEP, the Commission also uses this opportunity to discuss whether there is any justification for continuing the monopoly system -- to the detriment of ratepayers -- at a time when technology allows for a healthy, robust, and reliable energy market for retail customers."

"As I have expressed at previous open meetings and workshops, I believe it is time for the Commission to move forward with retail electric competition rules. We should comply with A.R.S. §40-202(B) which clearly states: 'It is the public policy of this state that a competitive market shall exist in the sale of electric generation service,'" Olson said in the memo