Issue: Energy efficiency has lowered revenue
The electric utility serving much of the Phoenix area is adding a new fee to customers' bills beginning in March.
As outlined in an insert in January bills, Arizona Public Service (APS) will be initiating a "Lost Fixed Cost Recovery" fee.
According to APS spokesman Jim McDonald, the problem is that as customers become more energy efficient – using higher-efficiency lighting and appliances and/or wasting less energy around their homes – the utility's revenues aren't keeping up with fixed costs such as equipment maintenance and repair or replacement of power poles and lines.
As part of its last rate case before the Arizona Corporation Commission, APS agreed not to raise its base electric rates, but was allowed to implement this new fee to cover the fixed costs of operating the system.
McDonald says the fee will average 38 cents per month, beginning with the March billing cycle.