New Electric Rates Cover Higher Cost of Reliable Service

We’ve upgraded our local energy grid to provide more power to more customers since 2014, the last year reflected in our current rates. Our system serves more than 167,000 electric customers and spans more than 8,000 square miles.  It requires ongoing maintenance and upgrades to more than 325 miles of transmission lines, more than 3,600 miles of overhead and underground distribution lines, and more than 40 substations.

UniSource has invested more than $330 million since 2014 to upgrade and reinforce our system and facilities. Some of those investments include:

• $234 million for upgrades to UniSource’s transmission and distribution systems in Mohave and Santa Cruz Counties, Including new substations, substation upgrades and other improvements.
• $42 million in generation investments to accommodate new customer demands
• $9 million for solar photovoltaic projects.
• New IT systems that facilitate smart grid operations and participation in regional energy markets .

These improvements help our system withstand extreme heat and powerful thunderstorms and stand up to the stress caused by increasing peak energy demands.

Learn more about our infrastructure investments here.

Our electric infrastructure is under growing stress. Warmer summer weather and the addition of more than 8,000 households and businesses over the last seven years have increased peak usage by about 16 percent between 2015 and 2021. Just as your vehicles and home need regular repairs, our grid must be well-maintained to support reliable service under increasingly challenging conditions. We’re also bringing cleaner, more efficient and flexible resources online to serve customers.

Thanks to these efforts, UniSource has provided record reliability during a global pandemic and punishing heat. We continue to rank in the top quartile of all electric utilities across the country for service reliability.

UniSource works hard to manage its operations and maintenance (O&M) costs through continuous improvement efforts and consistent scrutiny of expenses. The success of these efforts is reflected in the fact that UniSource’s O&M increased just 2.01 percent annually, on average, between 2015 and 2021 despite average annual inflation of 2.5 percent during that period.

Yes. A new Regulatory Expense Surcharge has been added to recover the cost of non-recurring expenses incurred in the course of requesting approval of new rates by the Arizona Corporation Commission (ACC). We expect that this new surcharge will add approximately 18 cents to the average monthly bills of typical residential customers. This impact will vary with seasonal conditions and individual usage.

The ACC also authorized UniSource to ask for approval of a new surcharge that could help recover costs related to the development of new energy resources. This charge does not yet appear on bills but could in the future with regulatory approval.

The System Reliability Benefit (SRB) mechanism would support the development of new energy resources needed to serve our customers' growing energy needs. It would only be used to recover the cost of investments of $25 million or more in systems selected through competitive all-source requests for proposals. If no such investments are made, the charge will not be applied to customers' bills.

UniSource understands that many customers may be struggling financially. To provide relief, we offer extended payment arrangements, payment extensions and other assistance to customers who are behind on their bills.

We also work with community partners to provide emergency bill payment assistance to qualifying customers. In addition to funds contributed by UniSource and our customers, these agencies can access federal energy assistance funds and emergency aid.

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. The increase is an annualized average, so customers should expect that the impact will be higher in hotter months and lower when the weather is cooler. Customers who use more energy, on average, should expect a larger average increase.

All of the projected impacts described below vary significantly with usage and the customer’s chosen pricing plan.

The average bill for a typical Small General Service customer on our Basic pricing plan will increase by 5.8 percent, or $11.63 per month, under the proposed rates compared to current levels.

The average bill for a typical Medium General Service customer will increase by 5.8 percent, or about $234 per month, compared to current levels.

The average bills of larger businesses that use our Large General Service pricing plans will increase by 7 percent, or about $3,500 per month, though this figure varies widely depending on usage.

All of these forecasts are based on average usage within each customer class. The potential impact for individual customers varies depending on their electric usage, and customers with above-average usage should expect higher bills.