Are data centers raising Arizona electric bills?
Whether Arizona homeowners subsidize data centers is being decided at the Corporation Commission right now. The analysis that started it, the utility rebuttals, the EIA numbers underneath, and what has actually been ruled.
Nobody has ruled on it yet. Whether data centers are raising Arizona electric bills is an open regulatory question in front of the Arizona Corporation Commission, with an independent analysis on one side, two utilities disputing it on the other, and no decision on the record.
This article lays out what each side actually claims, what the underlying data shows, and where the decision gets made. It does not pretend the question is settled, because it is not.
14.6x
Claimed residential-to-commercial disparity per unit of new load, 2022 to 2025
Analysis by Abhay Padgaonkar, reported by 12News, May 27, 2026. APS disputes the metric's relevance.
Contested, no regulatory finding
The short version
| Question | Answer |
|---|---|
| Has a regulator found that homeowners subsidize data centers? | No |
| What is the headline claim? | Residential paid 14.6x more per unit of new load than commercial, 2022 to 2025 |
| Whose analysis is it? | Abhay Padgaonkar, an independent energy data analyst, reported by 12News |
| What does APS say? | The metric “lacks clear relevance to how APS customer rates are set” |
| Where is it being decided? | ACC Docket E-00000A-25-0069 and the APS rate case, E-01345A-25-0105 |
| When? | ACC vote on the rate case due by December 31, 2026 |
The claim that lit the fuse
The analysis is frequently described as a “12News data analysis.” That attribution is not quite right, and the correction matters.
The work is Abhay Padgaonkar’s, an independent energy data analyst who has been filing submissions with Arizona regulators for roughly eight years. 12News reported it on May 27, 2026 under the headline “In APS territory, homeowners paid nearly 15 times more than commercial sector for every new unit of power.”
The three specific findings, as stated:
- Between 2022 and 2025, for every 1 GWh of new load the residential sector added to the grid, it paid 14.6 times more than the commercial sector paid.
- Over the same period, the commercial sector, driven primarily by data centers, accounted for over 100 percent of the entire growth in electricity consumption, yet paid only about 60 percent of the additional revenue APS collected.
- Residential customers consumed an average of 5.5 percent less electricity in 2025 than in 2022, while paying an average price per kWh that was 23 percent higher.
“Over 100 percent of the growth” is not a typo. It means commercial load grew by more than the system’s net growth, because residential load shrank at the same time.
That is a striking finding and it deserves to be taken seriously. It is also one analyst’s construction of a metric, published through a news outlet, not a finding by regulators after examination. Treat it as a serious claim now being tested.
Does the underlying data support it?
Partly. The direction is confirmed by EIA. The 14.6x figure itself is a constructed ratio that only the ACC can adjudicate.
Statewide EIA retail sales data for Arizona shows exactly the divergence Padgaonkar describes:
Arizona retail electricity sales by sector, 2024 vs 2025
Total retail sales in gigawatt-hours. Commercial and industrial load grew while residential load fell, which is the split underlying the cost-allocation argument.
View the numbers as a table
| Category | 2024 ( GWh) | 2025 ( GWh) |
|---|---|---|
| Residential | 40435 GWh | 39062 GWh |
| Commercial | 36100 GWh | 37543 GWh |
| Industrial | 14308 GWh | 14947 GWh |
Source: EIA retail sales, Arizona, annual. Industrial and other derived as statewide total (90,843 GWh in 2024; 91,552 GWh in 2025) minus residential and commercial.
Residential sales fell 3.4 percent. Commercial rose 4.0 percent. Industrial rose 4.5 percent. So the shape of the claim, that growth came from the commercial side while households used less, matches the state’s own reported data.
What EIA cannot tell you is whether the revenue each class contributed was proportionate to the cost each class caused. That is a cost-of-service question, it requires the utility’s own allocated cost studies, and it is precisely what a rate case exists to determine.
This means the honest position is that the premise checks out and the conclusion is unproven. Anyone telling you otherwise is skipping a step.
What the utilities say back
APS and SRP both reject the idea that data centers shift costs onto homeowners, and both point to specific tariff mechanisms rather than to general assurances.
The APS response
An APS spokesperson responded to the Padgaonkar analysis directly, saying the “disparity premium” metric “lacks clear relevance to how APS customer rates are set or how costs are allocated.”
Beyond the rebuttal, APS points to what it has actually filed. In its pending rate case, Docket No. E-01345A-25-0105, the requested increase is deliberately uneven across classes:
APS requested rate increase by customer class, percent
Requested base-rate revenue increases in the pending APS rate case. The Extra High Load Factor class is where very large continuous loads such as data centers sit.
View the numbers as a table
| Customer class | Value (%) |
|---|---|
| Residential | 16.44% |
| GS Small | 9.32% |
| GS Large | 15.73% |
| GS X-Large | 23.52% |
| XHLF | 47.03% |
Source: ACC public notice, APS rate case Docket E-01345A-25-0105, filed June 13, 2025.
The Extra High Load Factor class, at a requested 47.03 percent, is where APS puts its answer. XHLF is not new; it was created in 2017 for customers with monthly maximum demand at or above 5,000 kW and a load factor at or above 92 percent, which is the profile of a facility that runs flat out around the clock.
APS has proposed two changes that tighten it. First, making XHLF mandatory rather than optional for data-center customers taking service after January 2024, and for similarly situated large users requiring generation not already in the June 2025 resource plan. Second, eliminating the market-proxy-index option for generation fuel and power supply charges within XHLF, on the stated grounds that market prices are “likely no longer adequate to ensure that generation costs to serve the XHLF class are recovered from that class.”
That second change is the more revealing one. It is an admission that the existing mechanism was undercharging.
The SRP response
SRP is not regulated by the Corporation Commission. It is a public power district governed by its own elected board, so its price plans are board-adopted rather than ACC-approved.
SRP points to two things. The Large Customer Integration Process, introduced in 2025, is the study that determines what infrastructure a new large load requires and prices it back to that customer. And price plan E-67, effective from the November 2025 billing cycle, sets the terms.
The E-67 tariff (opens in a new tab) is specific:
- A “Large Load Account” is one with 20 MW or more, or reasonably expected to reach 20 MW within five years of first taking service.
- Each new Large Load Account carries a minimum billing demand of 80 percent of the customer’s forecasted demand, so a facility that forecasts high and delivers low still pays.
- SRP requires “the customer’s written agreement to reimburse SRP for the costs incurred in developing or procuring the resource(s) and associated infrastructure,” to the extent needed to ensure “no adverse economic impact on other SRP customers.”
- Participation is mandatory for any new Large Load Account, and SRP sets a maximum load with “no obligation to serve load in excess.”
For scale, SRP’s monthly service charge on E-67 is $5,479.45 before a kilowatt-hour is consumed.
Both utilities are therefore arguing the same thing in different regulatory frames: the mechanisms to make large loads pay their own way exist, and they are being tightened.
Where it actually gets decided
Two proceedings, two different bodies.
ACC Docket No. E-00000A-25-0069 is the generic inquiry, opened by Chair Kevin Thompson in a letter dated April 3, 2025, “In the Matter of the Commission’s Inquiry and Review of the Existing Rate Classifications and other Potential Issues relating to Data Centers.” The Commission held a large-load workshop on April 16, 2026.
That workshop produced no order and set no rule. It was a scoping exercise. Figures put on the record there are useful anyway:
| Utility or scope | Figure stated at the April 2026 workshop |
|---|---|
| SRP large-load customers | 59 customers, roughly 7,000 MW combined |
| APS large-customer peak demand | Approximately 13.1 GW |
| TEP and UNS | 286 MW contracted, roughly 800 MW forecast |
| Arizona statewide data centers | 2,000+ MW operating, 10,600+ MW planned |
Stated next steps were statewide standard-service mechanisms, large-load tariffs and energy supply agreements, alignment with the federal Ratepayer Protection Pledge, and a further workshop on tariff consistency and hook-up fees. Commissioner López framed the principle as “the ‘cost causer’ bears its fair share of expenses.”
ACC Docket No. E-01345A-25-0105 is the APS rate case, where the actual class allocations get decided. The evidentiary hearing ran May 18 to July 7, 2026, across 31 hearing days with roughly three dozen intervenors, more than 50 witnesses and over 300 exhibits. As of August 2026 the case is in post-hearing briefing. The Administrative Law Judge’s Recommended Opinion and Order is expected in late November 2026, and the Commission must vote by December 31, 2026.
SRP, again, sets its own rates through its elected board and is outside both proceedings.
For the broader picture on why demand is surging in the first place, see why your Arizona electric bill keeps going up and the running case summary on the APS rate increase page.
Why this matters even if the utilities are right
Suppose the rate structures work exactly as APS and SRP describe, and every dollar of data-center infrastructure is recovered from data centers. The bill pressure does not go away.
Demand growth still requires generation and transmission that did not previously exist. Pinnacle West materials indicate roughly $10.35 billion of APS capital investment planned across 2025 to 2028. SRP’s 2023 Integrated System Plan (opens in a new tab) plans for “greater than 40% growth in energy demand by 2035” and lists 7,000 MW of renewables, 1,500 MW of battery, 1,000 MW of pumped hydro and 2,000 MW of firm gas.
Shared system costs get allocated across all classes, and residential customers carry a share of them regardless of how the large-load classes are priced. Meanwhile APS has requested a 16.44 percent residential increase in a case that will not be decided until the end of 2026.
The regulatory question and the household question have different timelines. Regulators are working on a schedule measured in quarters. Bills arrive monthly.
Common questions
Are data centers raising my electric bill in Arizona?
It is genuinely disputed and no regulator has ruled. An independent analysis reported by 12News found APS residential customers paid 14.6 times more per unit of new load than the commercial sector between 2022 and 2025. APS says that metric is not relevant to how rates are set.
What is documented: Arizona commercial electricity sales grew 4.0 percent in 2025 while residential sales fell 3.4 percent, and APS has disclosed a queue of roughly 19 GW of potential data-center load. Whether that translates into cross-subsidy is the question before the Corporation Commission.
What did the 12News analysis actually find?
Three things. For every 1 GWh of new load added between 2022 and 2025, the residential sector paid 14.6 times more than the commercial sector. The commercial sector accounted for over 100 percent of consumption growth while paying about 60 percent of the additional revenue APS collected. And residential customers used 5.5 percent less electricity in 2025 than in 2022 while paying 23 percent more per kWh.
The analysis is Abhay Padgaonkar’s, an independent energy data analyst; 12News reported it. It is one analyst’s metric, not a regulatory finding.
How do APS and SRP say they protect homeowners?
APS has proposed making its Extra High Load Factor class mandatory for data centers taking service after January 2024, with a requested 47.03 percent increase for that class against 16.44 percent for residential. It has also proposed removing the market-proxy pricing option within XHLF.
SRP requires new customers at 20 MW or above to take service on price plan E-67, which carries a minimum billing demand of 80 percent of forecast load and a written agreement to reimburse SRP for the infrastructure built to serve them.
Who decides whether data centers pay their fair share?
For APS, the Arizona Corporation Commission. Two dockets are relevant: the generic data-center inquiry, E-00000A-25-0069, which held a workshop on April 16, 2026, and the APS rate case, E-01345A-25-0105, where the class allocations are actually set.
SRP is a public power district and sets its own price plans through an elected board, so it is outside ACC jurisdiction on rates. Either way, the outcome runs through public bodies rather than the utilities alone.
When will there be an answer?
For the APS rate case, the Administrative Law Judge’s Recommended Opinion and Order is expected in late November 2026 and the Commission must vote by December 31, 2026, with new rates expected in early 2027.
The generic data-center docket has no set deadline. The April 2026 workshop set scope and named a further workshop on tariff consistency, IRP modifications and hook-up fees, but produced no rule.
Related reading
- Why your Arizona electric bill keeps going up breaks the bill into base rates and adjustors with current tariff figures.
- The APS rate increase page tracks the pending rate case as it moves toward a vote.
- Data centers vs Arizona’s power and water covers the resource side of the same buildout.
- APS rate plans explained covers the residential plans these allocations feed into.
This article describes an ongoing regulatory dispute. Positions, figures and schedules change as the dockets proceed; everything above was verified against ACC, APS, SRP and EIA sources on August 10, 2026.
- Rate Cases
- APS
- SRP
- Arizona
More on Rate Cases
APS rate increase history, 2017 to 2026
A dated reference record of every APS general rate case decision since 2017: docket numbers, decision numbers, approved revenue changes, and what Arizona's average residential price actually did over the same period.
How to comment on the APS rate case
A procedural guide to Arizona's public comment process: the four submission channels, what a comment must contain to be docketed, how to look up Docket E-01345A-25-0105, and when the next comment window opens.
Arizona grid peak demand explained: why 4pm to 7pm costs the most
Arizona peak demand hits after the sun starts dropping, not at noon. Here is the real hourly load shape for APS on its record day, why peak hours are priced highest, and what a strained grid means for your bill.