UniSource Energy Services electric customers in Santa Cruz and Mohave counties face an average home bill increase of 14% next month, as the company seeks its first new rates in more than seven years.
On Wednesday, Jan. 17, the Arizona Corporation Commission will consider UniSource’s request for a significant rate increase to cover system improvements and higher costs.
UES serves about 19,000 customers in Santa Cruz County and 80,000 in Mohave County.
The sister company to Tucson Electric Power Co. filed in November 2022 for new rates that would increase its annual retail revenue by $25 million or 10.4%.
The company is seeking an increase that would boost the average monthly home bill for customers on the basic rate by about 14%, or $18.52, or $19.71 per month including surcharges for excess fuel costs and energy-efficiency programs.
UES also wants to increase the fixed basic monthly service charge for residential customers by $2, to $17 for customers on the basic rate plan, to recover more fixed costs.
Amid opposition from consumer advocates, the utility has proposed raising the discount to the basic monthly charge for its low-income rate plan from $16 to $20 to more than offset the service-charge increase.
UES also is requesting a controversial “System Reliability Benefit,” a new charge to allow the company to start recovering its system improvement costs between rate cases. The utility says that would help to add new generating assets to reduce its current 40% reliance on wholesale-power purchases.
The company cited a similar mechanism approved by the ACC several years ago to help small water companies to replace aging infrastructure, largely to avoid the high cost of rate-case filings.
The commission’s Utilities Division staff and an administrative law judge has recommended approval of the new charge.
But the Residential Utility Consumer Office, a state agency that represents home ratepayers in rate cases, has opposed the charge, noting that the ACC rejected TEP’s request for a similar charge in its rate decision last August on grounds it needed more study and stakeholder consultation.
The ACC administrative law judge also has recommended a return on equity — a key profit measure — of 9.6%, less than the company’s request of 9.95% but higher than levels recommended by the ACC staff and RUCO.
UniSource’s current electric rates went into effect in mid-2016, and the company filed its pending rate case in November 2022.
UES spokesman Joe Barrios said the company postponed a rate filing in 2020 due to the COVID-19 pandemic and again in 2021 after the ACC asked for a plan to shift some bill surcharges to general rates, which took additional time.
The ACC is expected to decide the UES rate case at a special open meeting in Phoenix on Wednesday starting at 9 a.m.
To view the meeting online, go to azcc.gov/live; to listen telephonically call 1-877-309-3457 and use passcode: 801972877##.
