UniSource Seeks Updated Electric Rates in 2024 to Support Reliable Service

Rhea-AI Summary

UniSource Energy Services has proposed updated electric rates to take effect in early 2024, marking its first rate request in seven years. The new rates aim to cover the costs of investments made since 2014 in infrastructure upgrades, including substations and maintenance, as well as rising fuel prices. The average monthly bill for residential customers is expected to increase by $18.52. Efforts to improve efficiency have kept operation costs below inflation rates. The proposal includes an increased monthly discount for low-income customers and eliminates transaction fees for most payments.

Positive

• Proposed rates support necessary investments in grid security and infrastructure enhancements.
• Efforts to limit operating cost growth to less than 2.1% annually despite average inflation of 2.5%.
• Increased monthly discount for low-income customers from $16 to $18.

Negative

• The average residential bill is projected to increase by $18.52, impacting customer affordability.

TUCSON, Ariz.--(BUSINESS WIRE)-- UniSource Energy Services is seeking updated electric rates that would take effect in early 2024, its first such request in seven years.

UniSource’s proposed rates would help cover the cost of investments made since 2014 to support a stronger, more secure energy grid. These investments include new substations, transmission and distribution system upgrades, and critical maintenance and improvements for generating resources. The new rates also would reflect higher fuel and energy prices UniSource has paid to help serve customers’ energy needs.

“Although we’ve had to pass along higher market energy prices in recent years, I’m proud we’ve been able to hold the line on our own expenses for so long,” said Susan Gray, UniSource’s President and CEO. “We’re doing everything we can to keep service affordable for customers, but we will need higher rates in 2024 to cover the increased cost of providing safe, reliable service for customers.”

UniSource’s request, filed today with the Arizona Corporation Commission (ACC), would increase the average monthly bills of typical residential customers by $18.52 when new rates take effect in 2024. This projected increase will vary based on usage, and customers’ total bills also will be affected by changes to fuel and purchased power rates between now and then.

Customers can mitigate the impact of higher energy costs through energy efficiency, possibly in combination with time-of-use pricing plans that offer lower rates during off-peak periods. UniSource also can help qualifying customers find payment assistance.

UniSource’s continual efforts to improve efficiencies have helped to keep costs as low as possible despite rising prices for equipment, construction materials and other necessities since 2014, the year upon which current rates are based. The company limited the average annual growth of its operations and maintenance costs to less than 2.1 percent between 2015 and 2021 despite average annual inflation of 2.5 percent during the same period.

Serving Energy Needs

Peak demand on UniSource’s energy grid has increased by 16 percent since 2014, driven by more extreme weather events and a nearly 8-percent increase in customers. UniSource anticipates that peak usage will continue to increase by about one percent annually over the next five years, driving the need for continued grid investments.

UniSource’s proposed rates support investments that will help the company manage long-term energy costs, reduce dependence on purchased power and achieve greater self-reliance with a better-balanced energy portfolio. These objectives were outlined in the company’s 2020 Integrated Resource Plan, which the ACC acknowledged as being in the public interest.

The proposed rates would allow more gradual recovery of anticipated costs for investments in solar arrays, battery storage systems and other energy resources. Passing along some of these costs as they occur will avoid larger impacts later that result from accumulations over longer periods between rate requests.

Assisting Customers

UniSource is seeking to offer an $18 monthly discount – up from $16 currently – for qualifying low-income customers whose household income does not exceed 200 percent of the federal poverty level. The proposed rates also would eliminate transaction fees for most credit card payments from residential and small business customers as well as for cash payments made at third-party payment processors.

UniSource has supported customers during the ongoing pandemic with increased philanthropic giving, delayed recovery of higher energy expenses, direct bill credits and a campaign to connect qualifying customers to expanded federal aid and other bill payment assistance. Including all federal funding, contributions and other resources, UniSource has directed nearly $10 million in assistance to customers and our community since 2020.

“We know our community has faced real challenges over these past few years because we’ve been there with support every step of the way,” Gray said. “Our systems and employees have delivered admirable reliability and strong service for customers throughout this extraordinarily difficult period. I am very proud of our company’s performance in living up to our values and the expectations of our customers.”

Additional information about UniSource’s rate proposal is available online.

UniSource provides electric service to more than 100,000 customers in Mohave and Santa Cruz counties through UNS Electric, Inc., a wholly owned subsidiary. It also provides natural gas service to more than 165,000 customers in northern and southern Arizona through subsidiary UNS Gas, Inc. For more information about UniSource, visit uesaz.com. UniSource and its parent company, UNS Energy, are subsidiaries of Fortis Inc. (TSX/NYSE: FTS), which owns utilities that serve more than 3 million customers across Canada and in the United States and the Caribbean. To learn more, visit fortisinc.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221117006135/en/

Joseph Barrios

(520) 884-3725

jbarrios@uesaz.com

Source: UniSource Energy Services

FAQ

What is UniSource Energy Services' proposed rate increase for 2024?

UniSource Energy Services proposes an average monthly bill increase of $18.52 for residential customers starting in early 2024.

Why is UniSource proposing new electric rates?

UniSource is proposing new rates to cover investments in infrastructure made since 2014 and to account for rising fuel and energy prices.

How has UniSource managed operational costs in recent years?

UniSource managed its operational costs to grow by less than 2.1% annually from 2015 to 2021, despite average annual inflation of 2.5%.

What assistance does UniSource provide to low-income customers?

UniSource plans to offer an $18 monthly discount for qualifying low-income customers, up from $16.

What investments will the proposed rates support?

The proposed rates will support investments in solar arrays, battery storage systems, and other energy resources to enhance grid security.