PHOENIX — Arizona Public Service Company (APS) has agreed to a $7 million settlement and significant policy changes after a 2024 incident in which a customer died following a power disconnection during extreme heat.
The agreement follows an investigation by the Arizona Attorney General’s Office, which concluded that APS may have violated consumer protection laws in how it handled service shutoffs for nonpayment.
At the center of the case is Katherine Korman, an APS customer whose electricity was cut off in May 2024 when outdoor temperatures reached approximately 99 degrees. Six days later, she was found dead in her home. Investigators noted that APS had ended a voluntary policy halting disconnections at 95 degrees just days before her service was terminated.
Attorney General Kris Mayes announced the settlement Wednesday, emphasizing that utilities must account for real-time weather conditions rather than rely solely on calendar-based policies.
Under the revised rules, APS will continue its seasonal moratorium on disconnections from June 1 through October 15 but will also reinstate a temperature-triggered safeguard. Power shutoffs for nonpayment will now be prohibited when temperatures reach 95 degrees or higher, regardless of the date.
Mayes underscored the broader implications of the policy shift, warning that extreme heat can quickly become life-threatening and urging other utilities to adopt similar protections.
The settlement allocates funds across several areas: $1 million will go toward bill credits for qualifying customers, while more than $3 million will support enhanced consumer protection measures, including the updated heat-related policies. An additional $2.75 million will be directed to the state’s Consumer Protection-Consumer Fraud Revolving Fund, along with $250,000 in legal fees. APS confirmed that all payments will come from shareholder funds rather than customer rates.
Despite agreeing to the settlement, APS denied any legal wrongdoing. In a statement, the company maintained that its previous policies already met or exceeded regulatory standards but said it opted to implement changes that further strengthen customer safety and communication.
As part of those improvements, APS will expand its notification system to include text alerts for potential disconnections and broaden its Safety Net Program. Customers will also be encouraged to designate an emergency contact who can be notified if their account is at risk of shutoff.
The case has intensified scrutiny on how utilities balance payment enforcement with public safety, particularly in regions where extreme heat poses a persistent and growing risk.
