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| Hearing to Begin for Disputed Electric Rate Hike |
Hearing to Begin for Disputed Electric Rate HikeNogales International, February 29, 2016
A hearing is set to begin this week on a controversial UniSource Electric rate hike proposal for customers in Santa Cruz and Mohave counties that has drawn widespread interest. The public hearing in front of an administrative judge for the Arizona Corporation Commission was scheduled to start at 10 a.m. March 1 at the Tucson Corporation Commission Office at the Arizona State Building at 400 W. Congress Street. In addition, the ACC said its commissioners will hold a public comment session in Nogales on March 22, though a time and place has yet to be announced. The commissioners are expected to consider the case in June, after recommendations have been made by the judge overseeing the hearing. UniSource Energy Services (UES), the parent company of UniSource Electric, says its proposal would increase average residential bills by about $1.99 per month for one year, after which average residential bills would increase another $7.87 per month. The company wants to hike its basic service charge for residential customers from $10 to $20 per month, but says the increase “would be partly offset by lower charges for energy usage and could be further offset by participation in UES’ energy efficiency programs.” Local businesses and trade groups have already filed for intervener status in the request, including Wal-Mart, which has three stores in the affected area, and the Nogales-based Fresh Produce Association of the Americas. “FPAA and its members will be directly affected by any change in UNS Electric’s rates and charges for electric service because any such changes will affect each member’s cost of doing business,” the organization wrote in its request. UES also is proposing a new net-metering plan that it says will “more fairly compensate customers for excess solar energy.” Instead of allowing rooftop solar users to exchange excess solar energy for free, on-demand utility power, UES says it wants to purchase excess output from new rooftop systems at the current market price for power from large solar arrays. A number of solar companies and organizations have also intervened in the case, including The Alliance for Solar Choice, which said the existing net-metering program “fairly compensates rooftop solar customers,” and urged all Arizonans to oppose the proposed change. “If UniSource gets its way it’s only a matter of time before Arizona Public Service, Tucson Electric Power, and other utilities will try this tactic to extract more money from ratepayers,” it said in a news release submitted on its behalf by the Scottsdale-based Rose, Moser and Allyn public relations firm.
Perhaps the most controversial part of the rate hike plan is the implementation of “demand charges.” UES has proposed a rate that combines the basic service charge and lower kilowatt-hour charges with a third fee based on a customer's highest level of energy usage. “This ‘three part’ rate would more closely mirror the costs incurred by UES because the company must develop and maintain facilities capable of serving every customer's peak demand,” it said in a news release. However, while UES proposed making the new rate mandatory for new users of solar arrays and optional for other customers, the ACC has already expressed support for allowing demand charges for all residential customers, the Arizona Republic reported. “No regulated utility in the country requires all residential customers to pay demand charges. Arizona would be the first state to force customers onto this complicated and confusing rate,” The Alliance for Solar Choice said in its news release. “Customers who do their best to control their usage would be penalized if they use too much power over just one hour a month, and wouldn’t be able to reduce this charge by using less energy the rest of the month,” it said. The ACC said the hearing beginning Tuesday will continue for “several days.” The public can speak on the first day of the hearing or submit comments at azcc.gov by clicking the “Submit a Public Comment for a Utility” link. Comments can also be submitted by calling or 1-. UES said in a May 2015 news release that the new electric rates and related changes would “better reflect the cost of serving customers' energy needs.” It noted recent investments to improve customer service such as a new solar array in Rio Rico, improvements to the primary transmission line in Santa Cruz County and new automated options for those who call the customer service line. “We have invested in a modern, efficient system that will reliably serve our customers for decades to come,” said David Hutchens, president and CEO, in the news release. “Now we need updated rates that are equally responsive to our customers’ evolving use of our local electric system.”
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