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Historic Settlement Agreement Approved by ACC
 Historic Settlement Agreement Approved by ACC

After lengthy discussions and consideration of numerous amendments, the ACC approved a settlement agreement establishing new rates for Arizona Public Service Company.  The agreement, reached last May among 22 parties to the rate case, was approved on a 4-1 vote with only minor changes. The ACC’s decision puts APS on a path toward improved financial health and includes a framework for processing future rate cases more efficiently.  It also provides benefits to customers in the form of low-income bill assistance and commitments for investments in energy efficiency and renewable energy resources

As a signatory to the Settlement Agreement, AIC is pleased with the ACC’s action and commends all parties for the professionalism and spirit of compromise exhibited during the multi-month negotiation process this past spring.  The settlement agreement also partially fulfils a recommendation contained in AIC’s White Paper on Streamlined Regulation that the ACC signal encouragement to parties to engage in settlement discussions.  As this settlement demonstrates, such agreements can actually deliver greater benefits for all stakeholder groups than are possible through an adversarial regulatory proceeding. 

Here are the major highlights of the approved agreeement:

- On average customers will experience in 2010 a rate increase of about one-half of one percent
- APS cannot file another request for a base rate increase before mid 2011 and good faith efforts are promised to authorize new rates by mid 2012.  APS could file another case in mid 2013
- APS commits to cumulative cost reductions of $150 million over 5 years and to equity infusions by its parent, Pinnacle West Capital Corporation over a similar horizon
- APS commits to invest in energy efficiency and conservation programs to achieve demand reduction goals
- APS commits to acquire additional renewable energy resources beyond the ACC’s current RES target level
  Gary Yaquinto, AIC President