APS 2018 Rate Hike

APS customers are in for a big surprise this summer as their energy bills will spike even if there energy usage goes down because of dramatic rate increases by the utility company.  The Arizona Corporation Commission has already approved utility rates that increase APS customer’s energy bills by as much as 70% (see below for calculation) by May 1st, 2018.  APS states that the rate hike will better reflect the true cost of serving customers during peak hours but it will also offset the lower energy bills solar customers have that APS says is eating into their bottom line even as they profit from removing program to help customers save money on their energy bills through efficiency upgrades.  You may have seen or heard APS promoting their rate changes as giving customers more options but in fact, they are mandating that every customer choose a new rate and will not allow any rate plans to be grandfathered in and the rate changes homeowners are going to see are amazing.

Old APS rate plan

APS old rate of $0.06118 Time Advantage 7 pm - 12 pm before August 19th

APS new off peak rate of $0.10873, a 77% increase

What Are The New APS Rate Plans

​Below is a table of APS frozen rate plans which will expire by May 1, 2018.  

​Below is a table of APS’s new rate plans.  You can also view APS's new rate plans here.

The lowest on-peak and off-peak rates will come with a demand charge that penalizes customers for using more energy during the hottest part of the day. 
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Let’s say you had the ECT-2 Combined Advantage with peak hours from 12-7 pm with APS.  Now, APS wants to switch you to the Saver Choice Plus with peak hours from 3-8 pm.  Look at the table below to see what change you could expect.

That’s a $54 increase or 16% additional costs for using the exact same energy you were last year.  Not only is the rate increase dramatic, the new rate punishes those who need the house at a cooler temperature for medical reasons or if you are like me and have teenagers in the house that don’t care what the thermostat is set to.  

What is a Demand Charge?

​A demand is a unit of measure APS and SRP use to say how much energy you are using at one time.  Your demand increases when you are using multiple appliances at one time.  If you have your dishwasher, dryer, water heater and AC running, your demand much bigger than someone running only their water heater.  Obviously in Arizona, the air conditioner is the majority of our demand and when we need it the most during the hottest part of the day, that’s when APS penalizes us the hardest for staying comfortable.  APS has a demand rate fee for each unit of demand so if your home averages 5 Demand Units, you would be charged $8.40 x 5 = $42.  APS customers get their demand averaged every hour.  SRP customers get their demand rate averaged every 30 minutes.  The demand is an average so if you go above a demand of 4 one time but average a 3 in an hour period, you will be charged a 3. 

How Much Energy Do Your Appliances Use?

• Water heater: 4.5 kW
• Electric dryer: 5.6 kW
• Oven: 3.4 kW
• Stove: 1.5 kW/burner
• Pool water pump: 2 kW
• Electric car charger: 2.3 kW
• 5 ton heat pump: 5-8 kW  

How to Prepare for APS Demand Charge

There is no way around the monstrous APS rate increase but there are ways to prepare and make the best of a bad situation. 

1. Definitely stagger your use of appliances.  Try your best not to do laundry, dishes, cooking or blasting the air conditioner at the same time.  This will spike up your demand and you’ll end up paying even more on your energy bills.
2. Change the times you perform household chores.  Do dishes and laundry before 1 pm or after 8 pm on weekdays.  Even try to avoid using the stove during peak hours of 1-8 pm as ridiculous as that sounds.  This can be a learned practice for some but most people but the hard part will be waiting until 8 pm to start normal life again.
3. Install a water heater timer and turn the water heater off during peak hours.  Water heaters will keep your water hot 24-7, regardless if you are using hot water or not and you never know when it will turn on.  By installing a water heater timer to shut the water heater off during peak hours, you will entire your demand will stay low.
4. Pre-cool your home before peak hours.  Pre-cooling is when you take your thermostat down to 73-74 degrees during off-peak hours and then let it rise during peak hours so the AC system rarely comes on.  This will only work if you have an energy efficient home that is well sealed and insulated.  If you try pre-cooling your home without insulation, sealed ductwork and airflow issues fixed (note, I did not mention new windows, radiant barrier or solar) you could end up spending more on your energy bills because all the cool air in your home will leave your home almost as fast as it enters.  An energy efficient home will keep the cool air inside much longer like a picnic cooler, so our unit won’t have to run as much. 
5. Have your home checked for leaks and inefficiencies.  Having a whole house energy audit can identify areas of waste that will pay for themselves and leave you more comfortable and with lower energy bills for the life of the home.  A good energy auditor can show what upgrades are more important than others and which ones are scams and should be avoided so you aren’t spending your money on fixes that won’t really help.  Our team of energy saving professionals is so confident in our approach; we will actually guarantee your energy bills after we’ve performed a $99 energy audit on your home.
6. Find the best new rate for your lifestyle.  The rate plan that APS recommends may not be in your best interest.  We’ve seen the letters APS sends out with a new recommended plan and it is clear that APS is steering most homeowners to a plan with a demand charge.  We’ve done a thorough analysis of APS’s new rate plans compared to their old plans and we see the rate plans that have demand charges as a way to punish homeowners for using too much energy during peak hours.  From our analysis, the rate plan that APS picks for homeowners is never the least expensive plan and their helpful tips aren’t that insightful.   

Compare APS Plans to Predict Your Energy Bills Under Different Rate Plans

​Want to know what your energy bills are going to be under APS’s new rate plans?  Use our tool to compare plans to see which plan makes the most sense for you.  I’ve created a handy payment estimator that can predict your energy bills and help you to decide which rate plan is best and strategies to best manage your demand rate during peak hours.  Simply fill energy your highest and lowest energy bill below and we will create a customized prediction table, recommendation and plan of action for you.