The following is the opinion and analysis of the writer:
Abhay Padgaonkar
If you are a 做厙勛圖 Electric Power customer, instead of the red and blue, you will soon start seeing black and blue.
TEP is pushing for an eye-popping windfall by demanding an extra in Base Rate Revenue a 16.5% increase, although it nets to 14% after taking into account other changes.
Worse yet, the monopoly is also seeking to ram the ratepayers with ARAM, an annual rate adjustment mechanism, to ensure it gets future increases on an , which will that get in the way of monopolies reaching into our pockets faster.
People are also reading…
Looking out for the customers?
The latest demand by TEP follows a increase in non-fuel retail revenue, representing a 10% increase it received in late 2023. Commissioner Anna Tovar cast the against it, saying, We have an obligation to think of more than just the utilitys bottom line; we must also look out for the customers.
Sadly, looking out for customers was and remains a minority view on the corporation commission, which is supposed to regulate monopolies and protect ratepayers from their overreach.
A commission that was has become even more aggressively pro-utility and anti-consumer.
They programs that reduce peak demand and increase energy efficiency.
They a new docket regarding the influx of new data centers, but prematurely assumed that the data center industry is , which experts say is impossible to verify, even for the regulators, because they are not privy to secret contracts.
They the other way when APS returned two years later with a 1,000 times higher balance on the fuel surcharge, and instead of ordering an audit, approved an even higher surcharge for years to come.
And they the nuclear expansion announcement as if to signal pre-approval without a single hearing. Now, remember that two nuclear reactors at Plant Vogtle in Georgia, first U.S. reactors built from scratch in decades, were a boondoggle of historic proportions: and possibly the most expensive power plant ever built.
The sharply higher power bills are already Georgians, with the fifth-highest monthly utility bill in 2022. (Arizona was close behind with the 9th highest.)
Stagnant sales, but skyrocketing profits?
All regulated utilities have a to engage in accumulating excessive amounts of capital. The more the steel in the ground, known as the rate base, the higher their shareholder profits are at guaranteed, double-digit margins.
TEP is no exception. It says the company deserves a 10.5% return on equity. And it , claiming to support growing energy needs because the energy demand in Arizona is increasing rapidly.
While that may be somewhat true for other utilities because of the data center demand surging at a rate, it certainly isnt true for TEP.
TEPs total electricity sales have been as flat as a pancake for the last decade, so much so that it sold 1% less electricity in 2024 than it did in 2015, according to the .
And yet, TEPs average residential bill increased by 33% over that period, although households reduced their average usage by 2%.
Ay, heres the rub: TEPs profits soared by a jaw-dropping 126% over that period, peaking at $289 million in 2024! You can only guess what its net income will be if the current rate hike is rubber-stamped.
Project Blue, the massive data center complex, would be a grand slam for TEP. The utility assured the Pima County Board of Supervisors that TEP ratepayers would be protected, and the board then voted to approve the project hours before TEPs announcement.
Cozy commission enabling corporate greed
Can you imagine any other business with stagnant sales for a decade that can more than double its profits anyway? Only if it has captive customers and a commission looking after its bottom line.
TEPs Canadian parent, , worth $24 billion, has bragged about providing a total annualized shareholder return of 10.7% over 20 years, or 666% in total, far exceeding the industry benchmarks.
And yet, the commission is focused on protecting the utilitys bottom line rather than protecting captive ratepayers. Absurdly enough, commission chair Kevin Thompson seems most concerned about the monopolies than about the financial struggles caused by their exorbitant rates.
The three for-profit monopolies regulated by the commission, APS, TEP, and UNS, were already charging higher prices .
If you want to know where TEP is headed, look to its sister company, UNS Electric, which has jacked up its rates by 51% and boosted its revenue by 77% over the last decade to become the most expensive utility in Arizona.
A petition signed by about 15,000 people to against the UNS rate hike last year and their request for a rehearing fell on at the wrongheaded commission.
Like I said, bear down!
Follow these steps to easily submit a letter to the editor or guest opinion to the 做厙勛圖.
Abhay Padgaonkar is a prominent consumer advocate who has served as an expert witness on behalf of ratepayers.
