New APS Chief Promises Change Amid Problems With Customer Bills

Following a slew of problems with customers' bills, the new CEO of Arizona Public Service, Jeff Guldner promised regulators that the utility would do more to serve their 1.2 million captive customers.

The meeting opened on Wednesday afternoon with the five elected Arizona Corporation Commissioners excoriating APS over a rate comparison tool that gave incorrect advice to customers.

In their respective opening statements, Chairman Bob Burns suggested that the monopolistic model of utility generation was outdated, Commissioner Lea Marquez Peterson chided the company for not being neighborly, and Commissioner Boyd Dunn raised the possibility of sanctioning the company.

It was hardly the first time regulators expressed frustration with a utility with repeated stumbles in recent years and months, from secretive political spending to customer deaths. But on Wednesday, APS executives appeared contrite.

Guldner offered what appeared to be a heartfelt apology — in sharp contrast with the bravado of his predecessor, Don Brandt, in his own appearance before the same commissioners in September.

“I firmly believe in my company’s responsibility to own its actions and outcomes,” Guldner said. “We have not met your, nor our own, expectations in helping customers understand their rate options.”

“For this, I want to personally apologize,” he added. “It is our responsibility to do better, and you have my commitment that we will do better.”

Some at the meeting expressed skepticism that such change would, or could, happen, in the current regulatory environment and after years of regulators struggling to rein in APS. Commissioners also pointed to numerous confusions in APS's rate comparison tool, currently suspended, such as the fact that several plan names begin with the term "Saver."

“Every week it’s something new,” Stacey Champion, a local activist and intervenor in the case, told commissioners. “I don’t think that that’s normal,” she added. Citing complaint records, she suggested that commissioners had no idea of the scope of the problems that APS customers faced.

Still, throughout the meeting, as they explained what had gone wrong with rate comparison tool, Guldner and other executives admitted they could have done better.

“The issue could and should have surfaced earlier,” Daniel Froetscher, APS’s executive vice president of operations, said of flaws in the tool.

The tool, which was supposed to show customers which APS plan would be most economical for them, turned out to have been wrong, because its calculations for off- and on-peak energy use accidentally shifted peak time an hour earlier in the day.

The problem began in February, but did not become public until the Arizona Republic reported on the problem in November. Executives said they were not aware of the problem until then.

APS said that the mistake affected 10,000 customers, who then changed to what was not ultimately the most economical plan. Guldner said the company would give a credit to those customers, along with $25 for the inconvenience.

Chief Information Officer Ted Geisler said he took complete responsibility for the tool’s failure to provide accurate information to people.

“We failed to adequately build and test the tool,” he told commissioners.

Guldner also announced plans to establish a consumer advisory panel and a mobile team. The company, he said, was putting in place procedures to help customers in real time, and APS has independently validated its rate comparison tool, with an accuracy rate of 99.9 percent. It paid the Brattle Group, a consulting firm, to do the analysis, using data that APS provided.

Guldner asked to return before the commission in March to provide an update. “It’s my hope that by being here today we’re taking a step in regaining customer trust and commission confidence,” he said.

Meanwhile, regulators and executives continue to deliberate changes to APS customer bills, so that, someday, they might better show customers a comparison of what they would pay under different plans.