New Electric Rates Cover Higher Cost of Reliable Service
New electric rates for UniSource Energy Services customers that take effect with February bills help cover rising costs and support ongoing investments in safe, reliable service. The new rates will:
- recover the cost of key investments made over the last seven years to support a stronger, more secure electric grid
- pass along higher energy and operating costs; and
- help us serve the increasing energy needs in the communities we serve
UniSource’s updated rates help cover the cost of investments made since 2014 to support a stronger, more secure energy grid. These investments include construction of new substations, improvements to existing transmission and distribution system upgrades, and critical maintenance and improvements for generating resources. The new rates also pass along higher fuel and energy prices UniSource has paid to help serve customers’ energy needs.
“After more than seven and a half years without a base rate increase, we need new rates to support our ongoing investments in safe, reliable service,” said Susan Gray, UniSource’s President and CEO. “We’re doing everything we can to keep service affordable for customers, but these new rates in 2024 are needed to cover the increased cost of providing safe, reliable service for customers.”
The rates were approved after a lengthy public process and approval by the Arizona Corporation Commission (ACC), a five-member elected panel that sets the rates charged by public service providers.
The average monthly bills of typical residential customers on UniSource’s Basic pricing plan are expected to increase by $13.68 under the new rates. That impact will vary with seasonal usage and is likely to be higher during hot weather and lower in cooler months. Customers can mitigate that impact by saving energy, possibly in combination with Time-of-Use pricing plans that offer lower rates during off-peak periods. UniSource can also provide resources that help customers find payment assistance and manage energy use.
UniSource has been working hard to manage costs in the face of rising prices for equipment, parts, construction materials and other necessities. Due to ongoing inflation, consumer prices are now more than 27 percent above the levels reflected in current rates.
Peak demand on UniSource’s electric grid has increased 16 percent since 2014, driven by hotter summer weather and a nearly 8-percent increase in new residential and business customers over the past seven years. The cost of fuel and wholesale energy also has increased significantly, driving up costs that we pass along to customers without any markup.
Despite these challenges, UniSource has provided top-tier reliability through the ongoing coronavirus pandemic. We continue to rank in the top quartile of all electric utilities across the country for service reliability. We’ve also connected record numbers of rooftop solar arrays to our system.
Reliable Energy Resources
Our new rates support investments that will help the company take control of its energy future by managing long-term energy costs, reducing dependence on purchased power and achieving 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, and continue to be a focus area in our 2023 Integrated Resource Plan.
Commissioners also approved more gradual recovery of anticipated costs for investments in wind farms, solar arrays, battery storage systems and other resources to serve electric customers. By passing along these costs as they occur, customers can avoid larger impacts that result from accumulations over longer periods between rate requests.
UniSource supported customers and our communities during the pandemic through 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, discounted rates and other resources, UniSource has directed nearly $10 million in assistance to customers and our community since 2016.
“We know higher costs can be hard to face, which is why we offer many ways to help customers who are having difficulty paying their bills,” Gray said. “These new rates allow us to begin recovering the increased costs of providing safe, reliable service that keeps pace with our customers’ expanding energy needs.”
Frequently Asked Questions
The following questions and answers provide more details about UniSource’s new rates: