Play with APS's Capital Structure

Learn what mis-allocated capital costs you.

A regulated utility earns a return on its rate base — and that return flows straight into your bill. The return rate (ROR) is the Weighted Average Cost of Capital (WACC) — a blend of cheap debt and pricier equity (ROE) — plus a small return on the fair-value increment. Move the four levers — capital structure, ROE, cost of debt, and the contested fair-value-increment (FVI) return — to see how the money flowing to lenders, to taxes, and up to the parent company (Pinnacle West) reshapes. This is only the return-on-capital slice of your bill (plus the income taxes it triggers) — not fuel, O&M, or other costs. Anchored to Arizona Public Service’s 2025 rate case

ROE
10.50%
high
low
Equity (ROE) Income taxes Debt interest
APS Pinnacle West Shareholders Lenders Government Equity → Pinnacle West (→ shareholders + its lenders); debt → lenders; income tax → government. Band heights = annual dollars.
Capital structure — drag toward debt or equity 44.5% debt / 55.5% equity
0% debt (all equity)100% debt (all leverage)
Cost of debt — weighted cost of long-term debt 4.26%
3.0%4.26% — APS embedded7.0%
Return on fair-value increment (FVI) — contested add-on return 1.00%
0% — AG & recent ACC0.20% Staff1.0% — APS ask
Annual change on the avg. residential bill*
—
vs. APS’s ask
—
vs. today
7.73%
ROR — return on rate base (incl. FVI)
0% today   ask 12%
To shareholders (ROE + fair value)
To income taxes
To lenders (interest)
Total / year (this slice)
* This return-on-capital + taxes slice only — not your whole bill. Fuel, O&M and other costs (which parties like RUCO also fight to cut) are separate.
Jump to a party’s position in the case — details & sources below:
Each position in the APS 2025 Rate Case (ACC Docket E-01345A-25-0105). Links open the filing PDF on the ACC docket at the cited page.
PartyEquity / DebtROEFVIWACCSource
Current / authorized51.93% / 48.07%9.55%0%6.81%2022 Dec. 79293, p. 2
APS (company)52.35% / 47.65%10.70%1.00%7.63%p. 104
ACC Staff52.35% / 47.65%9.80%0.20%7.16%p. 217
RUCO52.35% / 47.65%9.20%0%6.85%surreb. p. 216
AZLCG42% / 58%8.50%0%6.04%p. 19
AG / State of Arizona52.35% / 47.65%6.10%0%5.22%p. 33
Public power†0% / 100%none—~3.8%SRP FY25
† Public power is an illustrative public/municipal model (not a docket party): ~100% tax-exempt debt, no ROE, no income tax; debt cost benchmarked to SRP’s ~3.8% (FY25, Aa1/AA+). Common inputs: OCRB rate base $12.515B; cost of debt 4.26% (2025 embedded) for all 2025 positions, 3.85% for current/authorized.

Transparent assumptions

Nothing hidden — every number below is editable, and the defaults come straight from APS’s 2025 rate-case filings.