State regulators approved new rates for rural power provider UNS Electric that will increase the average home customer’s bill by about $4 a month and encourage people to switch to time-of-use rates.
The Arizona Corporation Commission also voted to impose a new monthly surcharge on customers with new rooftop solar systems, but it sidestepped for now bigger decisions on how to treat those customers.
In a case closely watched for the precedents it may set, the commission on Thursday voted to impose a new monthly charge of $1.58 on UNS customers who install their own rooftop solar systems after the new rates take effect.
The charge was cut from a proposed $5.95 charge UNS had sought in an effort to compromise on other rate changes.
But the commission tabled proposed cuts to the net-metering rate, at which rooftop solar customers are reimbursed for excess power they generate, as well as the issue of whether to force rooftop solar customers on to so-called demand rates.
Those issues will be decided in the coming months, based on the findings of a pending commission proceeding examining the value and costs of rooftop solar.
The new rates, which will go into effect as soon as UNS files its rate schedules no later than Sept. 1, increases the basic monthly service charge for residential customers on standard rates to $15 from $10 . The basic monthly charge for small-business general service customers will rise to $25 from $20 .
The typical UNS residential customer will see a monthly bill increase of an estimated $4.21. UNS initially had asked for an average increase of more than $8.
Customers on a low-income assistance program will see an increase of about $5, UNS said.
After a campaign to educate consumers, UNS in mid-March will begin offering optional time-of-use rate plans — which feature higher rates for power during periods of peak demand — with a $12 basic monthly charge as an incentive to switch from the standard plan. One time-of-use plan will include a demand charge.
The time-of-use plan is expected to cost the typical home customer about the same as the standard plan, but give customers the opportunity to save money by shifting more power use to cheaper, off-peak periods.
The Corporation Commission voted 4-1 to approve the UNS rate plan. Commissioner Bob Burns dissented, citing economically depressed conditions in UNS territory and, amid a flurry of amendments, the uncertainty of the plan’s costs.
Consumer advocates including AARP and the Arizona Community Action Association had opposed the higher basic charges, arguing that they pose a disproportionate burden on low-income ratepayers that can’t be avoided.
UNS serves about 90,000 customers in Santa Cruz and Mohave counties.
“I’ve got a real problem here with the increase on the rural communities in this part of the state,” Burns said.
But Commissioner Andy Tobin said the decision will be good for customers in the long term.
“I think it’s a very good start for us as we go forward with the other case and go forward on the solar pricing,” he said.
UNS had proposed putting all new solar customers on rates with demand charges — based on periods of peak demand — along with the basic monthly charge and usage-based energy charges.
Under the rate plan approved Thursday, UNS will come back with that rate design proposal, as well as proposals to cut net-metering rates, after the separate proceedings on the value of solar conclude in the next few months.
UNS and other utilities are trying to recover more of their costs through fixed charges, rather than usage-based charges, contending customers with rooftop solar avoid paying fixed costs of using the power grid.
As the first of several pending rate cases to come to a commission vote, the UNS case was seen as a bellwether for future treatment of rooftop solar customers. UNS sister Tucson Electric Power Co., Arizona Public Service Co., Trico Electric Cooperative all have filed rate cases seeking to impose fees on solar customers and cutting net-metering rates.
