Grand Canyon Times

The Arizona Corporation Commission has approved a new Power Supply Adjustment (PSA) rate for Arizona Public Service Company (APS) customers. The decision, reached unanimously, will see the PSA rate increase by $0.002 per kWh starting March 1. This adjustment is expected to result in an average monthly increase of $2.10 for residential customers using 1,050 kWh.

The PSA adjuster is typically an automatic annual adjustment unless reviewed by the Commission. APS does not profit from this adjustment, which reflects actual expenditures by the utility. The company voluntarily delayed implementing the increase until after the Commission's review and decision.

This rate change accounts for costs already incurred by APS to fuel its power plants and purchase renewable energy through Purchase Power Agreements (PPAs). APS estimates that its current undercollected balance for fuel costs is around $290 million, with the adjustment projected to save ratepayers approximately $20 million annually in interest.

The PSA rate can fluctuate based on market prices for fuel like natural gas and costs associated with purchasing energy from external sources, such as solar developers. During a hearing, APS stated that about two-thirds of its power comes from its own generation facilities, while roughly one-third is derived from purchased renewable energy generated by other companies.