UniSource Energy Services is helping fresh produce businesses in Nogales save money on electricity costs during the slow summer months, supporting an industry that accounts for the largest source of agricultural imports into North America each year.
Nogales is the busiest port of entry for produce grown in Mexico, and local distribution businesses rely on UniSource electric service to refrigerate nearly 5 billion pounds of fruits and vegetables before they are sent to homes annually, according to the Fresh Produce Association of the Americas.
“We literally are feeding America. People don’t realize how much fruit and vegetables are coming up through Mexico, and specifically, the Nogales and Rio Rico corridor,” said Matt Mandel, Vice President of Finance and Legal of Sunfed. “We’re providing the healthiest food on Earth – not just to Arizona, but to the entire country.”
For the past four years, many of those businesses, including Sunfed, have benefited from a special rate that helps them keep energy costs down in the slower months. As an economic driver and major employer in Santa Cruz County, UniSource collaborated with produce businesses to develop the rate to meet their needs.
Previously, electric rates were based on usage during the highest months. But paying that minimum benchmark resulted in higher bills in the summer, when the businesses essentially close and few fruits and vegetables grow.
The Fresh Produce Association of the Americas, which represents about 100 companies, requested a change from UniSource. In 2018, the Arizona Corporation Commission approved a new “agricultural service adjustment,” which specifically modifies bills for seasonal customers, said Manny Romero, UniSource Commercial Account Manager who works with the produce industry.
“These customers tend to be seasonal and ramp down operations around the summer months. There’s less import from Mexico and a less of a demand, so the distributors tend to shut down,” Romero said. “The rate is helping our seasonal customers.”
The new rate has been helpful for Sunfed, which runs two warehouses in Rio Rico. The largest squash shipper in North America, Sunfed also processes a range of other fruits and vegetables, including watermelons, eggplants, tomatoes, and cucumbers.
With such a variety, the two facilities must maintain nine different temperature zones – ranging from 34 to 60 degrees – to keep produce fresh before it’s shipped throughout the United States and Canada. Each day, between 25 and 30 truckloads arrive at Sunfed, delivering about 100,000 cases. But the warehouses hardly operate come June.
“Electricity is one of our largest costs in the entire operation, considering we’re refrigerating almost 70,000 square feet of storage. We’re essentially given a break on our rates during the off season and paying more during the on season,” Mandel said.
Mandel said he is grateful to UniSource for working with local distributors to support their unique needs and business schedule.
“It was nice to work side-by-side to figure out what a mutually beneficial solution would look like. Anything we can do to lower those costs is a tremendous savings to our business,” Mandel said.