New Electric Rates Needed in 2024 to Cover Higher Cost of Reliable Service

UniSource is seeking updated electric rates that would take effect in 2024 – our first such request in seven years – to reflect the rising cost of providing safe, reliable service. The proposed rates would:

  • 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 proposed rates would 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 would pass along 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.”

The proposal must be reviewed by the Arizona Corporation Commission (ACC), a five-member elected panel that sets the rates charged by public service providers. UniSource has requested the approval of new rates in time for them to take effect in February 2024.

The proposed rates would increase the average monthly bills of typical residential customers by $18.52 when new rates take effect in 2024. That projected increase would vary with usage and customers’ total bills also will be affected by changes to fuel and purchased power rates between now and then. 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.

Controlling Costs

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 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 proposed 2024 rates would support investments that will help the company manage long-term energy costs, reduce dependence on purchased power and achieve greater self-reliance with cleaner generating resources. These objectives were outlined in UniSource’s 2020 Integrated Resource Plan (IRP).

UniSource is proposing 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.

Assisting Customers

UniSource’s monthly CARES low-income discount would increase from $16 to $18 for qualifying residential customers whose household income does not exceed 200 percent of the federal poverty level. The new rates also would eliminate UniSource’s 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 and our communities during the ongoing 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 so many ways to help customers who are having difficulty paying their bills,” Gray said. “We really need higher rates to begin recovering the increased costs of providing safe, reliable service that keeps pace with our customers’ expanding energy needs.”

Read the Press Release

Frequently Asked Questions

The following questions and answers provide more details about UniSource’s rate proposal:

Rate Case Fact Sheet

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