Surprise Residents Face $20 Monthly APS Rate Hike as Attorney General Mayes Blames Data Centers and Billionaires

Attorney General Makes Unprecedented Move in Utility Case

Arizona Attorney General Kris Mayes has formally intervened in the Arizona Public Service rate case, marking the first time any state attorney general has opposed a utility rate increase in the state.

The move comes as APS seeks a 14 percent residential rate hike that would add roughly $20 per month to the average customer bill. Residents in Surprise, a city served by APS, would feel the impact directly.

"The vast majority of Arizonans do not believe that they should be subsidizing the cost of building data centers for a whole bunch of out-of-state billionaires," Mayes told KTAR News on Thursday. "That is what is going on with these rate increase proposals by both APS and Tucson Electric Power Company down in Tucson. It is."

Data Centers Drive the Ask

Mayes pointed to the rapid expansion of data centers in Arizona as the primary reason APS needs new infrastructure and higher rates. The utility has argued that current rates do not cover the costs of building new power plants and maintaining grid reliability.

But Mayes challenged that framing. She said the public should question why the expansion is needed in the first place.

"Let's ask ourselves why they need all that new infrastructure and more power plants," Mayes said. "It's because we have so many data centers coming into the state of Arizona."

Mayes hired an expert witness to testify that a 3 percent increase would be sufficient to cover costs and allow APS to attract capital. She added that APS already generates $600 million a year in profits.

Formula Rates Raise New Concerns

Beyond the immediate 14 percent hike, Mayes flagged a secondary threat: formula rates. This mechanism would allow utilities to automatically increase rates each year without traditional oversight from the Arizona Corporation Commission.

The ACC normally reviews rate cases using a "historical test year" to evaluate actual past spending before approving increases. Formula rates would bypass that review process.

"So they want 14% now, and then they're also looking for these formulaic rate increases later," Mayes explained. "It's really — honestly, guys, it's gross."

A Back-to-Back Hike

This proposed increase comes just 16 months after the ACC approved an 8 percent rate increase that added about $10 to $12 per month to typical residential bills. Mayes called the consecutive hikes "outrageous."

APS is currently more than halfway through its eight-part rate adjustment process. The company submitted its rate hike proposal in June 2025. Public comment on the case has now concluded.

The Credit Rating Argument

APS has warned that failing to approve the full rate increase could damage its credit rating and make it harder to attract investors. Mayes dismissed the claim as a recurring utility tactic.

"They're also making the perennial claim — they constantly do this — that if they don't get exactly what they want, their credit rating will go down," Mayes said. "It's sort of a 'sky is falling' argument that the utilities always make."

She added that the argument should not carry weight for a utility already earning $600 million annually in a rapidly growing state.

"That's not going to happen with a utility that's already making $600 million a year and in a state like Arizona that is still growing tremendously," Mayes said.

The ACC has not yet issued a decision on the rate case. Hearings continue as the commission evaluates the proposal.