Attorney General Mayes Secures $7 Million Settlement with APS Following Investigation into Disconnection Practices During Extreme Heat

PHOENIX —Attorney General Kris Mayes today announced a $7 million settlement with Arizona Public Service Company (APS), the state's largest electric utility, resolving allegations that APS violated the Arizona Consumer Fraud Act in connection with its disconnection practices. Under the settlement, APS will pay $2.75 million in monetary relief (in addition to attorneys’ fees), provide $1 million in credits to eligible consumers with outstanding balances, and invest $3.1 million in consumer protection improvements, including changing from a date-based policy to a temperature-based policy for account shut-offs.

The case arose from concerns regarding disconnection practices during extreme heat, including an incident involving the death of Katherine Korman, an APS residential customer whose electric service was remotely disconnected on May 13, 2024, due to nonpayment. The disconnection occurred when the daily high temperature in her area reached approximately 99 degrees Fahrenheit. Ms. Korman was found deceased at her residence six days later, on May 19, 2024. APS had discontinued its voluntary 95-degree hold practice — under which it had previously refrained from disconnecting service during extreme heat — just three days before Ms. Korman's service was cut off. The cause of Ms. Korman’s death was not determined as part of this action.

"No Arizonan should be put at risk because they cannot afford their electric bill,” said Attorney General Mayes. “This settlement ensures that APS will no longer disconnect power based on the date on the calendar alone — if temperatures are dangerous, the power stays on."

Settlement Terms

Under the proposed consent judgment, entered in Maricopa County Superior Court, APS is required to:

• Pay $2.75 million into the state's Consumer Protection–Consumer Fraud Revolving Fund, plus up to $250,000 in the Attorney General's attorneys' fees.
• Fund $1 million for the Arizona Consumer Assistance and Education Program, with at least $800,000 applied directly as bill credits to eligible customers facing service termination before September 1, 2026.
• Spend $3.4 million on programmatic improvements and consumer outreach.
• Reinstate the voluntary 95-degree hold on residential power disconnections for nonpayment, halting disconnections whenever temperatures are forecast to reach 95°F or above the following day — outside the existing June 1–October 15 moratorium period.
• Maintain the 32-degree cold weather hold on residential disconnections when temperatures are forecast to drop to 32°F or below.
• Improve customer notifications by adding text message alerts for past-due and disconnection notices.
• Enhance the Safety Net Program to function as an emergency notification system, allowing designated third parties to receive critical alerts — including past-due notices, disconnection warnings, and outage notifications — by text or email.
• Send annual letters to customers enrolled in the Saver Choice Plus frozen rate plan comparing their costs against available alternative rate plans.
• Encourage other Arizona utilities — including SRP, Tucson Electric Power, and rural cooperatives — to adopt similar extreme-weather hold practices.

All payments must be funded solely through APS shareholder funds and may not be recovered from ratepayers through future rate cases or surcharges. This matter was handled by Senior Litigation Counsel John Raymond Dillion IV of the Consumer Protection and Advocacy Section in the Civil Litigation Division.

A copy of the complaint is available A copy of the proposed consent judgment is available. The consent judgment is not final until signed by the Court.