While Arizonans struggle with soaring temperatures each summer, a different kind of heat is hitting their wallets—electricity bills that just won’t stop climbing. The state’s electricity prices have jumped a whopping 24% between 2012 and 2023, making Arizona more expensive than 31 other states. That’s not a club anyone wants to join.
The pain isn’t stopping anytime soon. Arizona Public Service wants a 14% rate hike—about $20 more per month for typical customers. Not to be outdone, Tucson Electric Power is asking for the same 14% increase, adding roughly $16 monthly. Thanks to the Corporation Commission‘s new “formula rate” policy, utilities can now come back year after year asking for more. Surprise!
Brace yourselves—utilities want 14% more from your wallet, and they’ll be back next year for seconds.
What’s driving these increases? Everything, it seems. Population growth, data centers gobbling electricity like it’s candy, grid investments, and the shift from coal to renewables and natural gas. By 2050, projections show Arizona residential electricity bills could skyrocket 47% without intervention. Just last year, systemwide rate increases cost Arizona consumers about $490 million. That’s real money.
The regulatory environment isn’t helping matters. The Corporation Commission now allows yearly rate reviews, fundamentally creating an express lane for raising your bills. Meanwhile, Governor Hobbs vetoed a bill that would have made it easier for data centers to generate their own power—a move that keeps these electricity-hungry facilities dependent on the grid we all share.
There’s a fierce debate about who should bear these costs. Should residential customers foot the bill? Or should data centers pay more? Nobody wants to pay, obviously.
Compared nationally, Arizona’s 1.7% electricity cost increase looks modest against the national average of 6.5%. Small comfort when you’re already paying more than most Americans. The nationwide electricity demand surge of 3% annually driven by AI technologies and data centers is only amplifying Arizona’s power challenges. The massive 3,330-square-foot data center planned for Eloy will only intensify pressure on the grid and potentially push rates even higher. The crisis is particularly hard on households already feeling the squeeze from inflation. Many residents are facing heartbreaking choices between paying for triple-digit electricity bills or essential needs like groceries.
Arizona’s power bill problem? It’s only getting started. Bring sunscreen—and a fatter wallet.
References
- https://www.eenews.net/articles/arizonans-buckling-under-high-power-bills-brace-for-megalaw/
- https://www.axios.com/local/phoenix/2025/08/05/rising-electricity-costs-data-centers-arizona
- https://www.kjzz.org/business/2025-06-16/aps-asks-arizona-utility-regulators-for-a-14-rate-increase-in-2026
- https://www.commonsenseinstituteus.org/arizona/research/energy-and-our-environment/az-energized-the-future-of-power-in-arizona
- https://www.aps.com/en/Utility/Regulatory-and-Legal/Rate-case
