Settlement bars Arizona utility from extreme-heat disconnections

PHOENIX (CN) — Arizona’s largest power company will no longer disconnect service for nonpayment when temperatures are at or above 95 degrees Fahrenheit, thanks to a $7 million settlement with the state attorney general’s office.

The settlement, announced by Attorney General Kris Mayes, follows an investigation into the death of 82-year-old Arizona Public Service customer Katherine Korman. On May 13, 2024, APS remotely disconnected Korman’s power for nonpayment.

“It was 99 degrees that day,” Mayes said in a Wednesday press conference. “Six days later, she was found dead in her home.

“I do not believe that Kate’s death had to happen,” Mayes continued. “That is why we are here today.”

Under Arizona Corporation Commission rules, utility companies can either pause disconnections from June 1 to Oct. 15 or suspend disconnections if the forecasted temperature exceeds 95 degrees. APS formerly practiced the latter but discontinued that policy just three days before cutting off Korman’s power.

Now, the policy is legally binding.

“If the temperatures are dangerous, the power stays on,” Mayes declared.

The settlement requires APS to pay $2.75 million to the Arizona consumer protection fund and provide $1 million in credit to customers behind on their bills. It also requires APS to spend $3 million to improve customer service, communication and outreach to prevent future tragedies.

Finally, Mayes demands in the settlement that APS CEO Ted Geisler write to all other major utilities in Arizona to encourage them to adopt the same policy.

“This shouldn’t just be APS policy,” Mayes said. “It should be the standard across the industry.”

The corporation commission first implemented its disconnection moratorium rule in 2022 after a woman died in her home after her power was cut off in 2018. Because most companies choose to abide by the June 1 to Oct. 15 moratorium, thousands of people are cut off in the months of April and May, when temperatures can still reach beyond 100 degrees.

In 2024, APS disconnected 3,205 people in April, 2,208 people in May, and “accidentally” disconnected one person in June.

A report from the U.S. Energy Information Administration revealed Wednesday that utilities across the U.S. cut off electricity to customers more than 13.4 million times in 2024.

This year, the first day of spring in Arizona brought with it a record-shattering 110 degrees of heat. Phoenix broke 15 daily temperature records in March, and experts say the summer is likely to remain hot and dry.

“Extreme heat is not something that happens once in a while,” Mayes said. “It is a known, predictable, annual reality that is getting worse. This year, we hit triple digits in March! No utility operating in this state should be allowed to cut off someone’s power on a 99-degree day because of an unpaid bill.

“Kate Korman deserved better. APS customers deserve better, and today, we are making sure that they get it,” she added.

In a statement posted to its website, APS denies all wrongdoing.

“While we have chosen to resolve this matter by adopting enhancements that benefit our customers, APS rejects the Attorney General’s assertions regarding our existing disconnection policies and customer communications, which already meet or exceed all applicable state laws and regulations,” the power company said. “Our entire team at APS prioritizes customer safety and cares deeply about the well-being of our customers and communities.”

APS says it tried to contact Korman about her nonpayment 10 times beginning in January of 2024. The company maintains that it followed all appropriate protocols before her power was shut off.

“I don’t think this was about whether they followed their own protocols,” Mayes responded. “It was about whether their protocols are adequate for keeping people alive. You shouldn’t have to die because you failed to pay.”

Mayes called on the corporation commission and the Legislature to codify the 95-degree limit into regulation and state law. While no deaths have occurred under other utilities, Mayes said she is looking into other companies like Salt River Project. Because SRP is not under the jurisdiction of the corporation commission, it suspends disconnections only in June and July.

If APS disconnects a customer before the temperature reaches 95 degrees, it’s unclear whether the settlement would require it to reconnect that customer when the temperature rises. Mayes says it would but suggested the parties might need to return to the table if APS sees it differently.

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