CorpComm Weighs New Shutoff Protections, Warns Changes Will Raise Customer Rates

Miriam Wasser
Bottom line, said one protester: "It's time for [APS] to take their customers into consideration more than their pockets."
The Arizona Corporation Commission is proposing new rules limiting when and how utilities can cut off power to customers for unpaid bills, in the wake of news about a woman's heat-related death last September after Arizona Public Service disconnected her service on a 107-degree day.

These changes are supposed to protect public health and prevent similar deaths in the future, but CorpComm staff warned that the new restrictions are likely to jack up utility rates for all customers, plenty of whom already struggle to pay their bills.

Current policy contains no specific parameters preventing shutoffs during extreme heat. The suggested additions, published Wednesday morning, would bar utilities from cutting off power to a residential customer from June 1 through September 30, or "if the local weather forecast will include weather conditions that the Commission has determined, by order, are especially dangerous to health."

The CorpComm's definition of "weather especially dangerous to health" does not include specific references to heat — just extreme cold. None of the proposed changes would affect this definition. CorpComm spokesperson Holly Ward was not able to disclose how many times, if at all, the CorpComm has made these determinations in the past. Nor is it clear how, or if, the CorpComm communicates those decisions with utilities.

Under the proposed rules, utilities would also be barred from disconnecting service unless their offices are open the day before and after a shutoff. They would be required to notify customers whose shutoff was suspended because of the dates or the weather, and to remind them that the customers will still owe the utility for the power they use.

The proposed changes state, too, that a customer "whose intended service disconnection was prevented" by weather has to join a payment plan with the utility and subsequently pay any outstanding balance in installments. It did not contain specifics about what that payment plan would look like or whether such a plan could provide utilities with an opportunity to gouge customers.

CorpComm staff also predicted that the proposed changes, aimed at protecting public health, will result in even higher bills for customers. Utilities would have higher expenses, they said, due to payment delays and increases in bad debt and administrative expenses — claims that could pave the way for utilities to attempt to justify further rate increases that, in an ironic twist, would heighten customers' struggles to pay their bills.

The five Commissioners are slated to discuss and vote on the changes on Thursday morning; public comments will be accepted until 10 a.m. that day. If the Commissioners accept the proposed changes, the new rules will be sent to the Secretary of State on Friday to be incorporated into state code.

At least one member of the public already has formally weighed in. Steven Neil, who identified himself as an APS ratepayer, critiqued the CorpComm's definition of dangerous weather. "It seems reasonable that the Commission should determine that high temperatures are also 'especially dangerous to health' and add such to the current definition," he wrote.

Last week, four of the five Corporation Commissioners requested a review of shutoff policies after Phoenix New Times reported on the death of 72-year-old Stephanie Pullman. APS cut her service on a 107-degree day, the same day Pullman paid $125 of the $176 demanded by APS to prevent disconnection. The coroner wrote that her death was due to "environmental heat exposure in [the] setting of significant cardiovascular disease."

Stephanie Pullman
Courtesy of Stephanie Pullman's family
Following that report, Chairman Bob Burns called for emergency rule-making to review and revise utility shutoff policies. Usually, rule-making takes six months to a year; Burns gave staff four days, including the weekend, to revise the CorpComm code in a way that "will further protect the electric utility customers of Arizona from the health risks that can occur with the loss of electricity service during the summer heat and the winter cold."

Commissioner Sandra Kennedy was the last among her colleagues to weigh in on Burns' request. In a letter she submitted Tuesday, she chastised fellow and previous Commissioners and effectively blamed a controversial APS rate increase in 2017 — approved by Commissioners — for Pullman's death.

With that increase, APS said bills would increase by an average of $6 per month, but a formal complaint, filed last year by local activist Stacey Champion, said that the actual amount was more like $17.

"If the Commission had been listening during the outcry about this rate shock, this elected body would not have missed an opportune time to respond by modifying or correcting its decision," Kennedy wrote.

In her letter, Kennedy also requested the amount of total revenue that APS took in in 2018 from shutoff-related fees. APS charges a $10 "Field Call Charge" to terminate an account (it comes to $10.65, with taxes), according to its own service schedule.

Jeanine Smith, one of Pullman's daughters, told New Times that she was hoping for policy changes. Her sister, Chris Hotes, also said she wanted to see positive change come from her mother's death.

The news of Pullman's death — and by extension, the issue of utility shutoffs — has drawn varied reactions from state leaders. In some cases, they appear to fall along partisan lines, even as activists say that killer heat and utility shutoffs should not be partisan issues.

Governor Doug Ducey described the CorpComm's move to revise shutoff rules as "mission creep," saying, "We want to see the Corporation Commission doing what their constitutional charge is," Capitol Media Services reported Monday.

"Something of this level could rise to legislation or regulation to protect Arizona’s most vulnerable,” Ducey added, suggesting that perhaps the Legislature and the governor's office should be involved in "other opportunities around energy regulation and policy."

The Arizona Constitution does, in fact, give the CorpComm "full power" to "make and enforce reasonable rules, regulations, and orders for the convenience, comfort, and safety, and the preservation of the health" of employees and customers of public service corporations, including regulated utilities like APS.

Ducey spokesperson Pat Ptak did not respond to a query from New Times asking for a response from the governor to Pullman's death. 

On Monday, 14 Arizona House and Senate Democrats sent a letter to each of the five Corporation Commissioners, demanding more information about when and where power companies are cutting people's power for unpaid bills, and labeling heat-related deaths as a public health crisis.

They specifically asked the CorpComm to map out where utility shutoffs take place and to publish that map. "Are they happening more in certain areas of the Valley, or are there other socio-demographic aspects that characterize what is happening?" they asked.

The letter also urged the body to look at "any correlation" between heat-related deaths, a recent surge in utility shutoffs, and the latest rate increase. They pointedly criticized the CorpComm for giving its "apparent approval" to APS in allowing the utility to omit shutoff data from its 2018 annual report, which was submitted to the Corporation Commission in May.

In May, 12News reported on the lack of shutoff data in that most recent report, which had been included in annual reports dating back to 2013. The CorpComm then provided those numbers only in response to the public records requests from 12News and Champion, the activist who filed a rate complaint and who long has sounded the alarm about shutoffs and heat-related deaths.

Last year, APS likely raked in at least $1.1 million in termination fees from cutting off power to customers.

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Those numbers revealed that in 2018, APS cut off power to customers more than 110,000 times — a 50 percent increase over 2017. Those 110,000 shutoffs represented nearly 80,000 unique accounts, according to APS spokesperson Jill Hanks. Data from the utility indicate that APS held off on disconnections on 31 different days last year because of the heat.

APS has just over 1.1 million residential customers in Arizona, meaning that last year, more than 7 percent of customers had their power cut over an unpaid bill. If APS charged the $10 Field Call Charge for every single cutoff last year — and presumably, it demanded at least that amount, because it can also charge "applicable adjustments" — then it raked in more than $1.1 million last year cutting off people's power.

Commissioner Lea Márquez Peterson called the Democrats' request of geographic data "reasonable," asking for staff and APS to create a spreadsheet that broke down shutoff data by ZIP codes. But she refrained from agreeing that any of that data should be readily available to the public.

"To ensure that any sensitive data is used only for proper purposes, I would suggest that any outside request to review or gain access to the data should be made as a formal public records request," Márquez Peterson wrote.

Matt Specht, spokesperson for the House Republican Caucus, said he was not aware of any letters to the CorpComm sent by Republicans in the Legislature.

Last week, Attorney General Mark Brnovich tweeted that he would be willing to "work with any member of the legislature next year to help enact shut-off safeguards for the most vulnerable members of our society."

Ryan Anderson, Brnovich's spokesperson, said that the AG's office had begun examining statutes in other states that laid out protections against utility shutoffs during life-threatening weather. He acknowledged that the Attorney General doesn't write law — "we're not policymakers," he said — but said the office could offer resources and input.

"What do consumer protections and protections for vulnerable individuals need to look like for the future? A few people can’t get this done," Anderson said. "It’s going to have to be a very comprehensive effort.”

click to enlarge A monthly breakdown of shutoffs by Arizona Public Service in 2018. - ARIZONA PUBLIC SERVICE
A monthly breakdown of shutoffs by Arizona Public Service in 2018.
Arizona Public Service
APS, meanwhile, appears to be in full crisis-management mode after Pullman's death, even as it is firmly, comfortably embedded among Arizona's political power players. 

On Monday, APS held "an initial listening session with several community organizations to get feedback before we begin a review of our disconnection process," Hanks said. The goal of the session was to solicit input "from a broad group of stakeholders on how we can partner to better support vulnerable populations during extreme weather." She declined to release the names of those organizations, but promised that APS was "committed to a transparent review process" and would soon share more information.

The fallout from Pullman's death doesn't appear to have reached the Arizona Chamber of Commerce.

On Thursday evening at the Phoenix Art Museum, the powerful organization of businesses and industries is scheduled to give Don Brandt, CEO of APS parent company Pinnacle West, the Arizona Heritage Award (sculpted by Arizona House Speaker Rusty Bowers, no less), "highlighting an Arizonan who has elevated the state nationally and internationally."

A previous version of this story incorrectly identified Márquez Peterson as sitting on the board of directors for the Chamber of Commerce. At the time of writing, the chamber's website listed her as a member of the board, which Márquez Peterson left in 2018.