The AZ Corporation Commission & Public Health (Part I)

At first glance, the Arizona Corporation Commission might seem like it has pretty much nothing to do with public health. But when you scratch the surface, you’ll discover that the Commission does in fact influence public health in important ways.

This week we’ll cover the Commission’s regulation of monopoly electricity utilities and how that impacts the social determinants of health.

Disposable income is a primary driver of the social determinants of health. The Corporation Commission can have a big impact on family budgets depending on whether they listen to the well-heeled utility executives & lobbyists or ordinary working Arizonans.

The average annual residential utility bill in Arizona is more than $2,200 per year (1,201 kWh * 15 ¢/kWh). That means between 4 and 10% of a low income’s total household budget goes toward electricity.

That’s a big chunk out of a working family’s household budget, restricting the choices families can make to keep their family members healthy.

The current Commission has developed a well-founded reputation of taking utility rate increases at face value and pretty much approving anything the utilities want – to the detriment of low-income households (well, really all ratepayers, but rate increases hit low-income folks the hardest).

For example, a couple of months ago the Corporation Commission approved APS’ proposed 8% rate increase. The four Republicans on the Commission approved the rate hike. The only Democrat on the Commission, Anna Tovar, voted no. The rate hike approved by the Commission infuses APS with a net $253 million or so in increased annual revenue.

Pinnacle West (APS’ parent company) in February reported net income of $501 million for 2023, up from $483M in 2022 (attributable, in part, to the Commission’s 2022 rubber stamping an 8% price boost to “cover the rising cost of methane” last year – that’s on top of the 2024 8% increase).

The Commission also recently rubber-stamped APS’ request to set their future ‘return on investment’ to 9.55%, up from the previous 8.9%… paving the way for even more future rate increases.

In a March 4 investor presentation APS even bragged that they enjoy a “supportive regulatory environment” (their words) that envisions ‘more constructive and consistent outcomes’.

In other words, “we’re not getting any pushback from the Commission“.

After you scratch the surface, it’s easy to see that who you vote for in the upcoming Corporation Commission race can have a big impact on the social determinants of health for working families.

Note: Three of the five Arizona Corporation Commission seats are up for election in November — those of Republicans Jim O’Connor and Lea Marquez Peterson and Democrat Tovar, who has announced she will not run again.

Next week we’ll cover how the Corporation Commissioners can have a good or bad impact on Arizona meeting goals to limit carbon emissions.

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