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. As more emerging technologies such as energy storage devices become commercially viable, they will continue to change how 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. And by providing customers the opportunity to manage their 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 and system peak conditions. Taking these innovations to scale isn’t just good for customers and the energy grid: it will help us achieve our bold clean energy commitment.

Partnerships

• Assisted municipal customers, such as the cities of Tempe and Flagstaff, in developing Climate Action Plans
• Developed a Memorandum of Understanding with the City of Phoenix to address sustainability goals
• Created a collaborative partnership with Advanced Energy Economy to develop solutions to help APS achieve our ambitious goals for clean energy and support electrification of the transportation sector

Community Programs

Take Charge AZ. We launched an innovative pilot program encouraging electric vehicle (EV) adoption by providing charging stations throughout Arizona. Through this program, we will install and own EV charging equipment at various workplace, fleet and multifamily communities, enabling us to gain knowledge that will help facilitate the electrification of the transportation sector. Under the program, 86 commercial Level 2 charging plugs have been installed at 43 locations. This has enabled charging at hotels, workplaces and municipalities. We expect to install more than 250 chargers through 2021.

As part of the program, we conducted a research study examining EV growth and its impact on load growth. The program is full and has a wait list. One of the installations is at the Pinal County government offices, where we also installed solar panels as part of our Solar Communities program, providing covered solar parking and electric charging for the public and Pinal County employees.  

Solar Communities. This program makes solar and its clean energy benefits available to limited- and moderate-income customers, as well as governments, schools and nonprofits. As of January 2020, the program had met the capacity approved by the Arizona Corporation Commission in our most recent rate case. Construction of remaining sites should conclude in 2021, and will close the program within the $45M total ACC approved program budget. As of year end, 2020, the program had installed:  

• 688 limited- and moderate-income household installations
• 4 multifamily systems
• 13 nonprofits, Title I schools and rural or government buildings

Demand Response Programs

We expanded the Rewards distributed energy resource storage programs. Launched in 2018, these industry-leading and award-winning programs incentivize customers to adopt advanced technologies in their homes to help 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 initiative 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. Rewards programs not only engage a rapidly growing number of customers and harness innovation on both sides of the meter, but at scale, they will help to address the duck curve and provide resource adequacy and significant capacity during operational peaks.  

2020 Programs include:

Cool Rewards: connected residential smart thermostats for demand response with pre-cooling 

• 31,200 smart thermostats enrolled
• Total of 10 events called
• Highest hour of DR capacity was 48MW

Peak Solutions: Commercial and Industrial Demand Response program 

• Approximately 366 customers enrolled 
• Total of 5 events called 
• Highest hour of DR peak capacity was 41MW

Storage Rewards: residential and commercial battery systems installed on specific feeders

• 33 residential sites

Reserve Rewards: grid-interactive water heaters installed in homes on specific feeders 

• 226 grid-interactive water heaters

The Rewards programs have received the following industry awards: 

• Smart Electric Power Alliance’s 2019 Innovative Partner of the Year Award (with EnergyHub)
• Alliance of Energy Service Professionals’ 2020 Energy Award for Outstanding Achievement in the category of Emerging Tools & Technologies
• Peak Load Management Association's Program Pacesetter Award (with EnergyHub)

With traditional energy efficiency measures such as LED light bulbs and energy efficient appliances now commonplace, we are pursuing the next generation of energy efficiency.  The next generation of energy efficiency measures and programs were approved by the Arizona Corporation Commission offering new program opportunities and benefits for customers:

• Subscription rate pilot offering rate-optimized smart thermostats to influence energy use patterns
• Connected pool pump pilot that couples energy savings options with potential load shifting and load management 
• EV-ready pre-wiring, and connected water heating in the Residential New Construction program 
• Community research project with homebuilders to explore emerging efficiency technologies and load management opportunities
• Increased funding for the Limited Income Weatherization program, along with specialized home energy reports focused on low-cost and no-cost energy savings tips and program information 
• Standby truck refrigeration, electric forklifts and airport electrification incentives

The energy efficiency standard (EES) set by the Arizona Corporation Commission, which is one of the more aggressive standards in the nation, requires utilities to achieve cumulative savings equivalent to 22% of 2019 retail sales. APS achieved and exceeded this goal in 2020. Through 2020, we achieved 23% of the EES goal. Our portfolio of energy efficiency programs provided about 585,637 MWh of energy savings for 2020. That is enough energy to power more than 50,000 typical Arizona households for an entire year. Since 2005, the lifetime energy savings from our energy efficiency programs have avoided approximately 22 million metric tons of carbon emissions.

To best support customers impacted by this rare global health and economic crisis, APS proposed additional DSM measures in its 2020 DSM Implementation Plan to help customers adversely affected by the economic impacts of the COVID-19 pandemic. The plan was approved by the Arizona Corporation Commission in October 2020 to help:

• Limited-income customers, including those recently unemployed by the crisis
• Customers who face unexpected costs due to HVAC failures and other related equipment emergencies
• Non-profit organizations and agencies that provide community health and human services
• Schools, historic facilities and other cultural sites that are important to the quality of life for Arizonans
• APS's Trade Allies that provide energy services, as long as they can do the work in a safe manner
• Local small businesses continue operating through the economic impacts of this pandemic

We have assistance programs that provide discounts to qualified limited-income customers as well as programs to help customers stay on top of their bills. 

Crisis Bill Assistance. An unplanned major expense or an unexpected reduction in income can put anybody in a temporary financial bind. Qualified customers can receive up to $800 every 12 months to cover current or past-due APS bills through the Crisis Bill Assistance program. We work closely with agency partners to assure that our limited-income customers can participate in programs to assist them in keeping their power on. When customers seek APS crisis bill assistance from these agencies, they can also check their eligibility for and enroll in the APS-funded Energy Support program, which offers qualifying limited-income customers a flat 25% discount before taxes on their monthly bill. Additionally, in 2021 we will have $1.25 million in funding and new agency partners in the distribution network to broaden access for customers. In our current rate filing, we have requested crisis bill funding be increased to $2.5 million annually.  APS also provided $500,000 in additional Crisis Bill funding to a large Metro Phoenix assistance agency for 2021.

Energy Support. Our Energy Support program is funded at $48 million for 2021. At the end of 2020, approximately 72,400 customers, a 22% increase during 2020, were receiving the limited-income rate discount. We are working to expand the program to reach more eligible customers. For example, we increased the enrollment term from 12 to 24 months. Additionally, in late 2020 the Arizona Corporation Commission approved an increase in the eligibility requirement for the Energy Support program from 150% to 200% of the Federal Poverty Limit. 

Weatherization Assistance. We also provide 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 2020, we spent $6.5 million to complete limited-income weatherization projects around the state. 

Project Share. Through Project SHARE, our customers can join us in giving back to our communities by making tax-deductible contributions when they pay their monthly energy bill. In addition, we match employee contributions to SHARE dollar-for-dollar. This limited-income assistance fund is administered by the Salvation Army. In 2020, customers, employees and APS donated close to $383,000 through Project SHARE. 

Learn more about our limited-income programs.

Identifying and Mitigating Information Security Risks. We have a comprehensive cybersecurity risk management process that is divided into three focus areas to identify and mitigate information security risks.

Awareness. All employees and contractors are required to take cybersecurity training and learn techniques to identify suspicious cyber activity and safeguard sensitive customer information. Quarterly security bulletins and other outreach activities help raise employee awareness about emerging threats and risks to the company. Regular awareness testing and training assesses our employees’ susceptibility to certain cyber threats, such as phishing.

Defensive Posture. We utilize a multilayer defensive technology model including firewalls, unified threat management devices, anti-malware technologies, data encryption technologies, and data loss prevention. These systems have alerting capability to notify cybersecurity personnel when critical events are detected.  Additional processes, such as vulnerability scanning, identify cybersecurity or technology risk to prioritize for remediation and enterprise logging systems detect and alert on potentially malicious behavior. Access to systems and data is provided based on business need with additional reviews and/or approvals required for privileged roles. In addition, the company does maintain an information security risk insurance policy. 

Resiliency. We monitor 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 and coordinate with federal, state, and local government partners, utility associations, regulatory bodies, and private sector information-sharing organizations. Additionally, we retain third-party incident response professionals to assist in response investigations, if needed. 

External Audits and Certifications. We perform regular vulnerability assessments and penetration testing. In addition to those traditional testing methods, we also use crowdsourced vulnerability assessments, perform regular programmatic assessments against standard  industry frameworks and are audited triennially by industry regulators.

Training. All employees and contractors are required to take cybersecurity training and learn techniques to identify suspicious cyber activity and safeguard sensitive customer information. Quarterly security bulletins and other outreach activities help raise employee awareness about emerging threats and risks to the company. We also hold workshops and “lunch and learns” 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 and training assesses our employees’ susceptibility to certain cyber threats, such as phishing. APS’s annual phishing test identification rate in 2020 of 96.6 % exceeds industry average benchmarks and continues to improve each year.

Governance. The Nuclear and Operating Committee of our Board of Directors  periodically reviews, with management, principal risks related to or arising out of the Company’s nuclear, fossil generation, transmission and distribution, environmental health and safety operations, or other matters addressed by the Committee, and assesses the effectiveness of the Company’s measures to address these risks, including oversight of security policies, programs and controls for protection of cyber and physical assets. The Nuclear and Operating Committee receives a cybersecurity update twice a year and more frequently if the Committee or management so requests.  The results of these reviews are reported to the full Board of Directors.  The full Board of Directors exercises oversight in relation to the company’s enterprise risks, which often include risks related to cybersecurity and data privacy. 

In addition to our cybersecurity efforts, we take extensive measures to protect our customers’ personally identifiable information. We utilize preventative and detective controls in 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

Partnering with other western utilities and the California Independent System Operator (CAISO) in the Energy Imbalance Market (EIM) provides us with greater operational efficiency and flexibility. The EIM, enables us to take advantage more quickly of favorable pricing opportunities in wholesale energy markets, integrate all generation resources more effectively and pass the savings on to our customers. APS joined the market in 2016 and the market continues to expand with utility participation through 2023.  Benefits include: lower fuel cost, improved visibility and situational awareness for system operations in the western power grid, improved integration of renewable energy and improved ability to import low or negatively priced energy. 

According to the most recent report released by the California Independent System Operator, the EIM has delivered more than $189 million in gross benefits (through December 2020) to APS customers since our participation began.