Arizona Attorney General Announces $7 Million Settlement with APS Over Disconnection Practices
Arizona Attorney General Kris Mayes announced a $7 million settlement with Arizona Public Service (APS) following an investigation into disconnection practices during extreme heat. The settlement aims to address allegations against APS for disconnection practices that violated the Arizona Consumer Fraud Act. Mayes emphasized the importance of ensuring that no Arizonan is put at risk due to inability to pay their electric bill. As part of the settlement, APS will pay $2.75 million in monetary relief, provide $1 million in credits to eligible consumers with outstanding balances, and invest $3.1 million in consumer protection improvements, including transitioning from a date-based to a temperature-based policy for account shut-offs.
The case that led to the settlement stemmed from the death of Katherine Korman, an APS residential customer whose electric service was disconnected on May 13, 2024, due to nonpayment when the daily high temperature was 99 degrees. Korman was found dead six days later, prompting scrutiny of APS's disconnection practices. Mayes highlighted that APS had recently discontinued its voluntary 95-degree hold practice, which had previously prevented service disconnections during extreme heat. The cause of Korman's death was ruled as an accident, with the primary cause being "Chronic ethanolism."
All payments related to the settlement must be funded through APS shareholder funds and cannot be recovered from ratepayers through future rate cases or surcharges. Maricopa County, where the incident occurred, is the fourth largest county in the United States by population, with 4,485,414 people according to the 2020 Census. The county, which encompasses around 63% of Arizona's population, spans 9,224 square miles, making it larger than seven U.S. states. Maricopa County boasts one of the largest park systems in the nation, with an estimated 120,000 acres of open space parks that offer various recreational opportunities. The county's seat is in Phoenix, the state capital and the fifth most populous city in the United States. Maricopa County was named after the Maricopa Native American Tribe.