Electric customers of UniSource Energy Services in Mohave County have been have been shocked with high bills, as record summer heat has magnified the impact of a major rate increase earlier this year.
And they wonβt see any relief in the near term, as Arizonaβs top utility regulator passed on a request to review UESβ rates.
Both UES and the Arizona Corporation Commission have been fielding complaints from ratepayers in Mohave County, where the company serves about 80,000 electric customers along with about 19,000 in Santa Cruz County.
Electric customers of UniSource Energy Services saw an average 14% bill increase in February 2024, but summer bills can be much higher.
UES and Tucson Electric Power are owned by Tucson-based UniSource Energy Corp., a subsidiary of Canada-based energy company Fortis Inc.
Scores of UES customers in Mohaveβs two biggest communities, Lake Havasu City and Kingman, have complained to the ACC about huge jumps in their power bills this summer, in some cases citing increases of more than 50% and hundreds of dollars monthly.
Don and Elaine Herr, Lake Havasu City retirees, filed a complaint with each of the ACC members, saying their monthly UES bills had increased $100 per month since last year.
βThis is untenable and has increased to the point of outright price gouging,β the couple wrote.
Don Herr, a retired fire division chief, said he felt misled on the impact of the rate increase after talking with UES.
Herr said heβs better off than some of his neighbors living on fixed incomes but is definitely feeling the pinch.
βA lot of people that live in Lake Havasu City definitely canβt afford this increase,β he told the Star. βIβm in a better situation, but it sure impacts our daily life, what we do.β
Bigger impacts
The current UES electric rates, approved by the commission in January and effective in February, were projected to boost the average monthly bills of typical residential customers by $13.68, or about 12%, with greater impact expected during the hot summer months and for larger users.
UES, a sister company to Tucson Electric Power, said it needed the high rates β the companyβs first base-rate increase in more than seven years β to recover about $300 million itβs spent on system improvements over that past decade to assure reliable service.
UES home customers also are paying an average of about $11 extra monthly through a usage-based bill surcharge that allows the utility to recover costs for purchased power and fuel beyond forecasted costs.
That surcharge was set higher by the ACC in May 2023 through 2025, to help UES recover increased costs for fuel and power during extreme summer heat and severe winter storms across the West mainly in 2021 and 2022.
Compounding the higher rates is a much hotter than normal summer cooling season in Mohave County, where Lake Havasu City posted the all-time Arizona record high temperature of 128 degrees in 1994.
Driven by heat
This past July in Lake Havasu City, daily high temperatures averaged 114 β a significant 5 degrees higher than normal β with four days reaching 119 or higher, UES notes.
The increased power usage pushed the average July bill for Lake Havasu City home customers to about $340 β an estimated $41 higher than bills from regular July weather, the utility said.
βThe bills in Lake Havasu are going to be driven higher in summer months by those environmental factors, thereβs no avoiding it,β UES spokesman Joe Salkowski said. βAnd when we communicate, and when the Commission communicates, about (the impact of) rate cases, we do so based on annualized averages, so the impact on Lake Havasu in July is going to be higher.β
UES says that a review of more than 22,000 bills found that average energy use in July was about 20% higher among Lake Havasu City customers and nearly 25% percent higher in Kingman, compared to the same month last year.
Seeking review
The spate of UES bill complaints prompted Corporation Commission member Lea MΓ‘rquez Peterson of Tucson to write a letter to commission Chairman Jim OβConnor, asking to reopen the UES rate case under a reconsideration rule to possibly adjust the utilityβs rate structure to provide some relief.
MΓ‘rquez Peterson, one of four Republicans on the five-member Corporation Commission who approved the new rates, said sheβs received many complaints about high UES bills from ratepayers in the Lake Havasu and Kingman areas.
βThey are experiencing rate shock from higher than usual summer electricity bills,β she wrote in a letter dated Aug. 26.
MΓ‘rquez Peterson noted that she has reminded ratepayers that they cannot be disconnected for non-payment from June 1 through Oct. 15, under a summer disconnection moratorium adopted by the commission in 2021.
She also noted there are utility assistance programs and budget-billing programs that even out payments over the year.
MΓ‘rquez Peterson said sheβd like to see a rate structure in which the gross revenue UES gets would not change, but the percentage of rate increase is higher during the winter months and lower during the summer months to soften the impact on ratepayers, noting that the ACC has approved seasonal rates in some cases.
But UES opposed such a seasonal rate structure, saying it would bear unintended consequences and be unfair to some ratepayers.
βRevising the companyβs rates to simply subsidize summer usage would not be in the public interest, as this would unfairly tip the scales in favor of customers with higher energy consumption,β UES Vice President Dallas Dukes wrote in a letter to the ACC.
Dukes said UES already offers customers a way to smooth out billing peaks with its Budget Billing program, which averages bills across a 12-month period to keep monthly payments approximately level.
As of August, 8,848 UES customers or about 9% were signed up for the Budget Billing program, the company said in response to a query from MΓ‘rquez Peterson.
Request denied
ACC Chairman OβConnor, who has the power to put the reopening of a rate case on an agenda and to a commission vote, denied MΓ‘rquez Petersonβs request last week.
OβConnor said that although he sympathized with struggling UES customers in Mohave County, the utility is entitled to recover its system investments through rates and the new rates were decided after careful, public consideration.
βTo grant your request would call into question the due deliberation we undergo as a Commission in hearing rate cases, it would upend the hard work we have made to stabilize our regulatory environment, and it would create unintended consequences for all customers and all utilities alike,β OβConnor said in a response dated Sept. 5.
In the commissionβs rate case vote in January, OβConnor and MΓ‘rquez Peterson were joined by fellow Republicans Kevin Thompson and Nick Myers in approving the new rates, with the commissionβs sole Democrat, Anna Tovar, dissenting.
OβConnor, Thompson and Myers voted to kill a UES proposal to increase its monthly discount for customers on its low-income rate plans to $18 from $16.
MΓ‘rquez Peterson told the Star she was disappointed by the chairmanβs decision but will continue working with local stakeholders in the Lake Havasu community to provide relief to ratepayers.
The three Republican legislators representing Lake Havasu and much of Mohave County as part of District 30 urged OβConnor to reconsider, in a letter dated Sept. 6.
βWhile we appreciate the Commissionβs effort to stabilize the regulatory environment in Arizona, we also believe the Commission must consider the impacts to residents who are struggling under the new rates, including those who are on fixed incomes and having to choose between essential expenses,β said a letter signed by state Sen. Sonny Borrelli (R-Lake Havasu City) and Reps. Leo Biasiucci (R-Lake Havasu City) and John Gillette (R-Kingman).
Mohave County has one of the highest percentages of residents age 65 and older in the state, at about 30%, and many live on fixed incomes.
UES has tried to explain the reasons for higher bills to ratepayers in customer newsletters and a recent press release.
The company has highlighted customer options and tools such as Budget Billing; its βMy Energy Usageβ online tool to track usage and compare different rate plans based on actual usage patterns; and available rebates on energy-efficient products and services that can reduce power usage.
UES officials planned to host a public open house to discuss summer bills in Lake Havasu City on Thursday, Sept. 12.
For information on UES payment assistance options, visit uesaz.com/payment-assistance.
