Attorney General Mayes Urges Arizona Corporation Commission to Investigate Whether APS Customers Subsidized Data Centers and Other Large Energy Users
PHOENIX – Attorney General Kris Mayes today urged the Arizona Corporation Commission to swiftly and publicly investigate whether Arizona Public Service Company’s (APS) Power Supply Adjuster (PSA) has facilitated a nearly $600 million cost shift from large energy users to other APS customers in recent years.
“APS is asking Arizonans to pay for a $608 million annual rate increase at the same time it may have passed almost $600 million in costs from data centers and other large energy users onto them,” said Attorney General Mayes. “Before the Commission approves any APS rate increase, Arizonans deserve answers.”
Attorney General Mayes’ request for an investigation follows a recent 12News investigation based on analysis that Abhay Padgaonkar filed in multiple Commission dockets on October 2, 2026. Mr. Padgaonkar contends that between 2023 and 2025, $587 million in costs attributable to a handful of large energy users may have been allocated to the rest of APS’s customers. APS is currently seeking a $608.7 million rate increase.
“This, if true, is a textbook cost shift – and a sizable one at that,” Attorney General Mayes wrote to Chairman Nick Myers and the Commissioners.
The letter notes that the Arizona Constitution charges the Commission with ensuring that APS’s rates are just and reasonable, and that cost causation – making sure the customers who cause costs are the ones who pay for them – is highly relevant to that responsibility. It also contrasts the reporting with APS’s statement during a January 2026 legislative committee meeting that “Residential customers are not subsidizing data centers.”
“The Commission should not just take APS’ word for it,” the Attorney General wrote. The letter explains that the Commission has the authority to revisit its past decisions and investigate these claims, and that it can order APS to produce the underlying billing and PSA records needed to fully vet them. A full cost of service study may also be required.
APS and Commission Executive Director Clark have both publicly disputed Mr. Padgaonkar’s conclusions, and APS has called the study “misleading” and said it “oversimplifies” the PSA. The Attorney General responded: “If that is the case, APS should show the Commission and its ratepayers, using the underlying records and calculations, why Mr. Padgaonkar is incorrect.”
The letter also warns that allowing these concerns to linger could undermine public confidence in the pledges by the Commission and APS that growth should pay for growth, and may continue to erode public support for new data center development in Arizona.
“Understandably, people already struggling with their energy bills do not want to subsidize data centers and other large energy users,” Attorney General Mayes wrote.
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