Technologies such as rooftop solar, LED lighting and smart thermostats have given customers more power to control their energy usage and potentially reduce their costs. And as more emerging technologies, such as energy storage devices, become commercially viable, they will continue to change how our customers interact with us. By being proactive and working with our customers to identify and respond to their changing needs, we remain well positioned to deliver value.

In 2018, three new APS programs incentivized customers to adopt advanced technologies in their homes to help harness an abundance of midday solar energy. These programs make it easier for customers to consume electricity at midday when solar energy is plentiful and to conserve power in the late afternoon and early evening when it is in greatest demand and thus costs more. The APS Rewards program goes beyond using traditional batteries and helps to harness the use of thermal storage through smart water heaters and thermostats. Making use of midday solar is an important part of delivering on a cleaner energy future and furthering Arizona’s solar leadership.

The new Rewards programs include the following:

• Storage Rewards — Residential battery systems deployed in customer homes on specific feeders to reduce system peak and thermal loads, act as a solar sponge and manage customer peak demand charges
• Reserve Rewards — Grid-interactive water heaters installed in homes on specific feeders to provide load management benefits by shifting water heating demand periods into times when solar generation is excessive; soaking up the sun
• Cool Rewards — Residential customers can connect smart thermostats in their homes to an APS operating platform, allowing us to call demand response load reductions during system peak events up to twenty times annually. If customers follow the same pattern regularly they could save on their energy bills 

By providing customers the opportunity to manage their own energy and peak demand, we can expand the use and understanding of load-management technologies, encourage customers to use energy during off-peak hours and better align with solar production curves and system peak conditions.

Learn more about customer technology and the Rewards Programs.

With traditional energy efficiency measures such as LED light bulbs and energy efficient appliances now commonplace, APS is pursuing the next generation of energy efficiency. Our 2018 and 2019 Energy Efficiency proposed plans, currently with the Arizona Corporation Commission for review, include:

• Smart thermostats
• Electric vehicle charging infrastructure
• Energy storage (increase in funding for our existing program from $4 million to $6 million)
• Water heater timers
• Outfitting new homes with pre-wiring for vehicle charging outlets
• Helping Arizona businesses and cities electrify their fleet
• Providing free electric buses and charging stations to select school districts
• Increasing the number of charging stations
• Placing charging stations in multifamily housing locations

Additionally, many of APS’s current rebates will continue, including Residential HVAC, Home Performance with Energy Star, Residential New Construction and Solutions for Business.

You can read the full plan here.

The energy efficiency standard (EES) set by the Arizona Corporation Commission, which is one of the most aggressive standards in the nation, requires utilities to achieve cumulative savings equivalent to 22 percent of 2020 retail sales. Through 2018, APS has achieved 16 percent of the EES goal. Our current portfolio of energy efficiency programs provided 392,022 MWh of energy savings in 2018. That is enough energy to power more than 28,000 typical Arizona households for an entire year. Since 2005, the lifetime energy savings from APS energy efficiency programs have avoided approximately 23 million metric tons of carbon emissions.

APS customers across the state are now benefiting from APS Solar Communities, a new program making renewable energy more accessible to those who otherwise may not have the financial means to go solar. Designed specifically for limited- and moderate-income customers, we are investing $10 million to $15 million annually for three years (2018-2020) in the program. APS Solar Communities residential participants agree to have a rooftop solar system installed at no cost. Customers then begin receiving a monthly $30 bill credit from APS while helping to contribute to our 50-percent clean energy mix. The program also plans to include Title I schools, nonprofits aiding limited-income groups, multifamily housing and government entities serving rural communities located in our service territory.

Learn more about the APS Solar Communities.

Our Solar Innovation Study is a state-of-the-art initiative that integrates distributed energy resources such as rooftop solar, energy storage, home energy management systems, smart thermostats and multi-stage, variable speed HVAC systems and couples them with demand-based rates. The study of 75 single-family homes in the Phoenix metro area tests ways our customers can employ behind-the-meter distributed technologies to manage their energy use. It also employs price signals that encourage customers to shift their energy use away from peak demand times. Data from the study will be used to expand industry-wide knowledge and enable the efficient use of available and emerging distributed technologies.

The Solar Innovation Study moves us closer to a future in which modernized rate structures and realistic pricing signals drive market innovation and unlock new technologies. This initiative will give our customers greater control over their energy use and increase our flexibility to integrate new energy solutions into the grid.

The Solar Partner Program was awarded Renewable Integration Project of the Year at DistribuTECH 2017. The program is also the focus of a new Electric Power Research Institute (EPRI) report showing that smart inverters can help grid operators better manage distributed energy resources on the power grid.

The report outlines key research findings from the deployment of almost 1,600 smart inverters on rooftops as part of the APS Solar Partner Program, an initiative that is assessing the impact of using advanced inverters to incorporate solar photovoltaic and battery storage on our distribution system.

APS provides Crisis Bill Assistance to help our customers lower their energy burden. In 2020, APS will have $1.25 million in funding and new agency partners in the distribution network. APS and our agency partners are expanding where and how customers can access this support. When customers seek APS crisis bill assistance from these agencies, they can also check their eligibility for and enroll in the APS Energy Support program, which offers qualifying limited-income customers a flat 25% discount before taxes on their monthly bill.

The APS Energy Support program is funded at $48 million for 2019 and 2020. In 2018, approximately 46,381 customers received the limited-income rate discount, and we are working to expand the program to reach more eligible customers. APS also provides funding for limited-income home weatherization in partnership with community action agencies throughout Arizona. This weatherization program enables qualified customers to make their homes more energy efficient. In 2019, APS has $3.5 million to complete limited-income weatherization projects around the state.

Through Project SHARE, APS customers can join us in giving back to our communities by making tax-deductible contributions when they pay their monthly bill. In addition, APS matches employee contributions to SHARE dollar-for-dollar. This limited-income assistance fund is administered by the Salvation Army. In 2018, customers, employees and APS as a company donated close to $399,000 through Project SHARE.

Learn more about assistance programs.

During 2018, we experienced a banner year in meeting customer needs with our self-service tools. There were a total of 13.3 million visitors to aps.com and 11.7 million completed self-serve transactions such as start/stop service, registration, paying bills, program enrollment and more; of which more than 80% were completed on aps.com. Our combined web and IVR self-service transactions resulted in 9.29 transactions per customer, exceeding our annual goal for self-service transactions. Successful milestones included:

• Since the mobile app launch, June 2016, there have been more than 230,000 downloads and 580,000 completed payments
• Successful migration of 1.2 million customers to new service plans that were approved in the August 2017 rate review. We never had transitioned more than a million customers to new plans in such a short amount of time
• Midyear, we launched a new service plan comparison tool for customers to benchmark their current plan against other options and get energy saving tips
• We relaunched our popular Home Energy Reports to about 20 percent of our residential customers to help them better understand their usage and learn more ways to save
• In late 2018, we launched the second phase of our enhanced IVR, improving its natural speech capabilities
• And we began a web chat pilot to explore our capabilities and customers’ need to engage with us in this new hybrid channel

Looking forward to 2019, we will continue to explore ways to help our customers save time and money as well as be well informed about their options. A leading example is the launch of our redesigned aps.com website, which will be more dynamic at accommodating digital transactions and improving usability for mobile devices. With the customer as the end user of our tools and channels, we will continue to enhance the customer experience with us anywhere, anytime.

Learn more about customer programs and tools.

APS was one of the first utilities in the nation to pass the benefits of federal tax reform on to customers. Customers started receiving these tax savings in March 2018, and a second wave took effect beginning with their bills in April 2019. The savings will vary based on actual usage and appear on monthly bills as a line item called “Tax Expense Adjustor.” APS is currently seeking (April 2019) Arizona Corporation Commission approval to once again lower customer rates as a result of federal tax reform. This request will be the final of three adjustments related to federal corporate tax cuts. Once approved, this latest reduction will bring the overall savings from the tax expense adjustor to more than $11 per month, or more than $130 a year, for a customer using the average amount of electricity. Additional savings from lower APS operating costs and an innovative energy trading program, combined with the tax reform reductions, are lowering bills $14 per month, or $168 a year, for the average electricity user compared to one year ago (April 2018 vs. April 2019). 

Learn more about tax reform savings.

Partnering with other western utilities and the California Independent System Operator (CAISO) in the Energy Imbalance Market (EIM) provides APS with greater operational efficiency and flexibility. The EIM, which is the only five-minute energy market in the western United States, enables us to more quickly take advantage of favorable pricing opportunities in wholesale energy markets, more effectively integrate all generation resources and pass the savings on to our customers. 

According to a report released by the California Independent System Operator, APS saved more than $45 million for 2018, which puts the savings since our participation began in October 2016 at a total of $82.5 million.

Learn more about our participation in EIM.

As cybersecurity attacks become more frequent and more sophisticated across numerous industries, safeguarding the data and technology that delivers power to APS customers becomes increasingly important. Our comprehensive cybersecurity program is designed to prepare our people, programs and technologies for emerging threats. 

All APS employees and contractors are required to take cybersecurity training and learn techniques to identify suspicious cyber activity and safeguard sensitive customer information. Quarterly security boot camps and other outreach activities help raise employee awareness about emerging threats and risks to the company. We also hold workshops to educate employees on critical issues, such as creating secure passwords, recognizing potential attacks, securing personally identifiable information and ensuring safe file storage. Regular awareness testing assesses our employees’ susceptibility to certain cyber threats, such as phishing.

APS monitors for emerging cybersecurity threats 24 hours a day, seven days a week. Our Cyber Defense Center detects, alerts, contains and mitigates attacks in real time. To enhance our capabilities and provide improved threat intelligence, we maintain relationships with federal, state and local government partners as well as fellow utilities and private sector information sharing organizations. We ensure that cybersecurity awareness is strong at all levels of APS, including briefings to the company’s Board of Directors, presentations to senior management and updates at staff meetings companywide.

In addition to our cybersecurity efforts, APS takes extensive measures to protect data privacy as a result of our commitment to keep customers’ sensitive information safe and secure. Internal audits, data loss prevention technology, and reviews utilizing Generally Accepted Privacy Principles are examples of our internal controls and systems to ensure safe handling of customer data.