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Arizona Public Service CEO apologizes for billing tool error

December 17, 2019 GMT
FILE - This Tuesday, April 16, 2019 file photo shows a view of the Arizona Public Service utility company in Phoenix. The new head of Arizona's largest electric utility has apologized for a faulty bill calculator that was supposed to help customers find the cheapest rate plan but instead steered 10,000 of them to higher-priced options. (AP Photo/Ross D. Franklin,File)
FILE - This Tuesday, April 16, 2019 file photo shows a view of the Arizona Public Service utility company in Phoenix. The new head of Arizona's largest electric utility has apologized for a faulty bill calculator that was supposed to help customers find the cheapest rate plan but instead steered 10,000 of them to higher-priced options. (AP Photo/Ross D. Franklin,File)

PHOENIX (AP) — The new head of Arizona’s largest electric utility apologized Wednesday for a faulty bill calculator that was supposed to help customers find the cheapest rate plan but instead steered 10,000 of them to higher-priced options.

Arizona Public Service CEO Jeff Guldner told frustrated state utility regulators that the company fell short. APS executives pledged refunds to customers for the amount they overpaid plus an additional $25 for the inconvenience.

“I want to personally apologize to those customers who were affected by that error,” Guldner told the Arizona Corporation Commission. “It is our responsibility to do better and you have my commitment that we will do better.”

The billing problem is the latest in a series of missteps by the utility, which serves 1.2 million customers throughout much of Arizona. Last year, an elderly customer died when the company turned off her power because she was about $50 behind on her bill on a day temperatures reached 107 degrees.

The billing error incensed several members of the elected commission. They demanded that the company answer for how the problem happened, when APS discovered it, and how the public can be confident in the information the company issues in the future.

“For APS, these miscues seem to be the status quo and compounded by more bad news the next day,” said Commissioner Lea Marquez Peterson.

APS officials said the problem began in February but senior managers weren’t aware of it until November when contacted by The Arizona Republic.

“The issue could and should have surfaced earlier,” Daniel Froetscher, executive vice president of operations for APS, acknowledged.

Guldner said he’s focused on adapting the company’s culture to improve its focus on customers and empowering employees to speak up when they see problems.

Ted Geisler, the utility’s chief information officer, said the plan comparison tool incorrectly calculated bills based on a higher-priced period of 2 p.m. to 7 p.m. However, APS’ on-peak energy hours are 3 p.m. to 8 p.m. The tool was available on the company’s website and was used by the company’s call center representatives.

APS initially estimated that about 12,000 customers were steered to higher-priced plans but said Wednesday that further analysis placed the figure at 10,000, and only about a quarter of them paid more than $25 extra after switching.

A new plan comparison tool is in the works.

Guldner appeared before the commission for the first time since taking the helm at APS and its parent company, Pinnacle West Capital Corp., last month.

In September, commissioners lit into Guldner and other top APS executives, saying they schemed to control electricity regulation through lobbying and millions in political spending, growing wealthier while some of their customers struggled to pay their bills.

Commission Chairman Bob Burns, a Republican, pressed Guldner during the September meeting to commit to never getting involved in corporation commission campaigns during his tenure as CEO. Guldner demurred, saying he’d get back to the commissioner after he took charge.

Guldner did not discuss political spending Wednesday. He’s scheduled to discuss the issue at a commission hearing next month.

Stacey Champion, an APS customer who has become a leading critic of the company since challenging its 2017 rate increase, said APS has an overriding focus on producing profit for shareholders and faulted regulators for failing to hold the company accountable to customers.

“At what point do you all stop verbally slapping their hand and do something to provide this massive amount of people some relief?” Champion said.

She called the company’s plan to give customers $25 “insulting.” She said APS acknowledging fault is a positive step but questioned why commissioners trust the company’s statements.

“You can’t just take what they say at face value,” she said.