A report published by Sierra Club in cooperation with Synapse Energy Economics on September 15, 2026, titled Passing the Buck: How APS’s Gas Rush Risks Ratepayer Dollars, examines the effects of Arizona Public Service’s (APS) increasing reliance on gas, the impact of new generation projects on customers’ bills, and the proposed fuel-cost-sharing mechanism intended to protect them from rising prices.
The report comes as APS seeks a 14% rate increase, which could raise the average residential customer’s bill by approximately $240 annually. If approved, it would be the third increase customers have borne in five years. The company also proposes what it calls “formula-based rates,” a mechanism that allows rates to increase each year with less oversight and limited public participation, according to the report.
What Is APS Planning?
The publisher says APS has the largest volume of planned gas projects among the state’s utilities. The projects include the Desert Sun Power Plant, as well as the Redhawk Expansion Project in Maricopa County, which involves building eight new turbines powered by methane gas. The report links this expansion to concerns about air pollution and public health, noting that the county is consistently ranked among the areas with the worst air quality according to the State of the Air report issued by the American Lung Association.
At the same time, the report says APS is retreating from its clean-energy goals, abandoning its commitments related to carbon-free operations, and backing away from a previous pledge to close the Four Corners coal plant by 2031.
Risks Identified by the Report
- Expanding gas-fired electricity generation could increase the annual residential customer bill by more than $112.
- Under the Power Supply Adjuster mechanism used by APS, customers bear the entire difference if gas prices exceed the company’s forecasts used to calculate rates.
- Relying on gas to meet electricity demand increases customers’ exposure to fuel-price volatility.
Sierra Club argues that this structure does not give APS sufficient incentive to manage fuel-cost risks because the company can pass 100% of fuel and purchased-power costs on to customers. The organization proposes that the company share part of these costs, which could encourage it to reduce reliance on fuel-dependent plants and increase the use of renewable energy sources.
Why Does This Matter?
The issue goes beyond building new plants because it concerns who bears the risks of investment and gas-price volatility: the company or customers. However, the report represents the position of Sierra Club and Synapse Energy Economics, and the available material does not include a response from APS or an independent assessment by the regulator of the projects’ viability or bill estimates. Therefore, the figures and impacts presented still require review as part of the rate-increase proceedings before they can be considered a final outcome.