New APS utility charge confuses, alarms consumers

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By Mike Gertzman By Mike Gertzman

PHOENIX -- Some Valley residents say they're a little upset over a notice they are getting in the mail from their utility company, APS.

The notice is in regards to a new charge that consumers will be seeing on their bill, but the new charge is not sitting well with some, and consumers expressed their frustration and confusion to 3 On Your Side.

One of those APS customers is Bill Plesha, who does all he can to decrease his energy usage.

"During the day, we try to keep it around 67 or 68 degrees during the winter months," Plesha said, referring to how he turns down his heat to conserve.

Not only does he watch his thermostat, he also runs ceiling fans during the summer months. He's installed sun screens on the outside of his home.  
And, Plesha has even replaced every single light with low-energy bulbs called CFLs just to cut his monthly energy bill.

"If you talked to my wife, I think the word that she would use would be cheap," Plesha joked.

So, you can imagine Plesha's disbelief when he opened up his APS power bill recently and found a notice about electric rates.

"I was upset and, quite honestly, disappointed because we have done everything they (APS) have asked us to do, as have many other customers," he said.

The notice indicates APS is "selling less electricity" because consumers like Plesha have done such a great job of cutting down.

As a result, APS says it will "implement a new charge" to help cover the utility company's fixed costs.

"Somehow to me, the logic there does not make sense," Plesha said of the new charge.

Plesha wants to know why in the world would he be penalized for using less electricity?

So, 3 On Your Side sat down with APS spokesman Jim McDonald.

McDonald said he understands why consumers would initially be upset with the notice.

"If I am going to save, I want to see my complete savings," he said, reiterating what many consumers have been saying.

McDonald said that although APS is selling less electricity due to people like Plesha, for example, it's unable to keep up with what it calls "fixed costs." 

"It's a fact of life, we have to pay for infrastructure, the poles, the transformers, power lines, the wires that go into your house," he said. "They have to be paid for."

In order to keep up with those fixed costs, APS went to the Arizona Corporation Commission, which regulates utilities in Arizona. Many consumers don't know it, but the commission is demanding APS to decrease energy sales by 22 percent by the year 2020. That's why APS has been encouraging consumers to use CFL low-energy bulbs and to take advantage of many of solar programs that they help subsidize.   

It's those programs that has led to lower utility usage, but it has also taken a hit on paying company's fixed costs.

To offset those costs, APS asked for and was granted permission by the Arizona Corporation Commission last year to add the "Lost Fixed Cost Recovery" or LFCR charge to your power bill. That new charge is going into effect in March, which explains why consumers are getting the notice.

But, exactly how much will this LFCR be?

"For the average household, it will be going up 38 cents a month. That's it," McDonald said.

So, before you get too worked up at seeing that APS notice in the mail, remember, the increase will only be around 38 cents a month, and more for those who use more electricity.

Plesha said 38 cents is not much and feels better after 3 On Your Side explained the matter. However, he wishes APS wasn't so quick to pass on additional charges to customers.

"What about ways that they (APS) can be more efficient without turning around and charging the customer right up front?" Plesha asked, saying it should be a shared responsibility.

APS claims it has implemented cost-saving measures and has done what it can to shave additional expenses, but that the LFCR is needed.

Regardless, 3 On Your Side believes the notice that is being mailed out to APS customers probably could have been explained better so consumers would not have been so alarmed.

If you'd like more information on the Lost Fixed Cost Recovery (LFCR) charge, you can call APS at 602-371-6820.