Arizona secures $7 million settlement with APS over disconnection practices
Arizona secured a $7 million settlement with Arizona Public Service over the utility's disconnection practices during extreme heat.
Attorney General Kris Mayes announced the settlement on Wednesday, resolving allegations that APS violated the Arizona Consumer Fraud Act.
The attorney general's office began investigating APS following the death of 82-year-old Katherine Korman. Her electricity was remotely disconnected for nonpayment on May 13, 2024.
The attorney general's office said APS discontinued its voluntary 95-degree hold practice three days before Korman's service was cut off. Mayes noted the cause of Korman’s death was not determined as part of this action.
"No Arizonan should be put at risk because they cannot afford their electric bill," Mayes said.
"This settlement ensures that APS will no longer disconnect power based on the date on the calendar alone — if temperatures are dangerous, the power stays on," Mayes said.
Under the consent judgment, APS will pay $2.75 million into the state's Consumer Protection–Consumer Fraud Revolving Fund, plus up to $250,000 in attorneys' fees.
The utility will also fund $1 million for the Arizona Consumer Assistance and Education Program. At least $800,000 of that will be applied directly as bill credits to eligible customers facing service termination before Sept. 1, 2026.
APS will spend an additional $3.4 million on programmatic improvements and consumer outreach.
The settlement forces APS to reinstate its voluntary 95-degree hold on residential power disconnections for nonpayment outside the existing June 1 to Oct. 15 moratorium period. The utility must also maintain its 32-degree cold-weather hold.
Other requirements include adding text message alerts for past-due notices, enhancing the Safety Net Program to allow designated third parties to receive critical alerts, and sending annual letters to customers on the Saver Choice Plus frozen rate plan to compare costs.
The settlement also encourages SRP, Tucson Electric Power, and rural cooperatives to adopt similar extreme-weather hold practices.