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1/4/2013 6:00:00 AM
UniSource seeking higher electricity rates

Ahron Sherman
Miner Staff Reporter

KINGMAN - UniSource Energy Services delivered on the promise it made about two months ago by submitting an application to raise its electric rates to the Arizona Corporation Commission Monday.

As a whole, the proposal asks for a roughly $3.60 increase to "typical residential customers' average monthly bills," according to a company release. The increase would bump the electric bills of UniSource's 91,000 customers in Mohave and Santa Cruz counties up by about 4.4 percent.

"Our current rates don't reflect the investments we've made and expenses incurred over three and a half years to improve upon the high level of service customers have come to expect from UES," said UES Chair and CEO Paul Bonavia in a company release. "We've reinforced and expanded our system infrastructure while investing in renewable energy and energy efficiency. Our proposed rates reflect the added value of these improvements, which have resulted in safer, cleaner and more reliable service for customers."

The current rate structure is based on the money the company spent to operate in 2008. In the last four years, operating costs have increased and sales have remained flat, said Joseph Barrios, a spokesman for the company.

In its application, the company is proposing the use of a test year that ended June 30, 2012 because it has a full year of financial data that includes the Black Mountain Generating Station in Golden Valley, which the company officially purchased in 2011.

Bill Rigsby, who's with the Residential Utility Consumer Office, said his organization has filed the paperwork to gain intervener status in the case.

RUCO, which was set up by statute to represent Arizona ratepayers, most always intervenes when it comes to major utility companies asking the ACC for permission to raise their rates.

During a cursory review of the UniSource application, Rigsby said one aspect immediately stood out as a potential point of contention - the Purchased Power and Fuel Adjustment Charge.

Known as the PPFAC, the mechanism allows utility companies to pass the costs or savings of purchased power on to their customers.

For UniSource, some of those costs are captured through the rate base while the rest is captured through the PPFAC, Barrios explained.

In the company's application to raise rates, a request was made to allow UniSource to capture all of those costs through the PPFAC.

If UniSource is allowed to pass all of its fuel and power purchasing costs on to the customer, there's no incentive for the company to make prudent decisions, he said.

Now that the application has been filed, it will go through a 30-day sufficiency review. If the ACC finds the application to be complete, the clock starts ticking.

The parties involved will go back and forth in front of one of the ACC's administrative law judges, and at some point the judge will issue an opinion. Rigsby said he expects the parties involved to file direct testimony in late June.

After the judge has issued an opinion, the application becomes an action item for the five ACC commissioners to vote on.

The process typically takes about a year, and UniSource hopes to have the rates - should they be approved - in place in early 2014, Barrios said.

Additional details, including frequently asked questions and a copy of the application, are available at

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Related Stories:
• Electric rate increase sought by UniSource

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Reader Comments

Posted: Monday, January 7, 2013
Article comment by: Please Check Into It

Ahron, how about looking into if the rates already are so high that business growth, expansion and relocation into our area is hurt. I understand the KWH rate is on the high side and this is one of the factors discouraging economic growth. We have 30 days - knowing the truth and having some facts about this will help decide if this community should support or fight Unisource.

Posted: Sunday, January 6, 2013
Article comment by: H L

Don't expect help from our elected officals. It'll mean more revenue in the form of a "tax" for the County & State something they can't be held responsible for but surely will
Benefit from.! For this reason they certainly won't oppose it!

Posted: Sunday, January 6, 2013
Article comment by: Yes, Again and Again

The voices here will not make any difference.... rates will continue to climb. The families with fixed income will be "out in the cold and in the dark", but companies do not care about this.

Posted: Sunday, January 6, 2013
Article comment by: Ray Cartwright

I work for a Power Plant in Colorado. I hear on a weekly basis what our company is selling our electricity for and it has run for anywhere in the last year from -$.07 (we pay someone to use it) to around $35 per Megawatt. (1 Megawatt is enough to power about 1000 homes) It appears to me that if they need an increase it is because they didn't utilize their dispatchers to purchase the cheaper power.

Posted: Saturday, January 5, 2013
Article comment by: Listen up Minions

Silence you drones.

I gave you power to light all your cute little doo -dads and trimmings for your electric christmas.

I demand from you for my grace and kindness. Now you just write those new charges on your fancy snoopy printed checks and get it in our dropbox ASAP.

Oh better yet. Get on that cell phone and pay using your debit card. Dont mind the 3.95 charge. Just feel warm and fuzzy knowing your money got to us Faster.

Any Questions? Better not be any stinking questions.

In short.. They Own us and have no competition to force change.

Posted: Saturday, January 5, 2013
Article comment by: az transplant

if everyone used wind power, and solar power, and showed the utility companies we don't need them anymore, maybe they would get a clue. we Can live without them.

Posted: Saturday, January 5, 2013
Article comment by: Anson's Nephew

“Welcome to the "Obama States of America" Higher taxes, higher utility bills, higher cable rates, higher health care and lower wages.”

Well let’s consider the above for a moment. Tax rates are the lowest since the 1950s. Utility bills are based on what a corporation chooses to charge you – outside of the control of the president. Cable rates are based on what a corporation chooses to charge you – outside of the control of the president. Higher health care is the purview of the healthcare industry – outside of the control of the president. Lower wages are the responsibility of corporations who choose to not pay their employees a living wage – outside of the control of the president.

Were utilities, cable companies, healthcare companies (including insurance providers) and all corporations to actually have rates and pay scales set by the government I am curious what your response would be.

What is comes down to is – quite simply – that Obama won, by a large margin, so deal with it.

Posted: Friday, January 4, 2013
Article comment by: anonymous anonymous

Why am I surprised that the folks obssessed with Obama think he has anything to do with electric rates in this small corner of America? I guess if it rains tomorrow or we have a snow storm some how its going to be Obamas fault I guess in some folks minds! If less than $4 rate increase on a monthly bill is going to bust your budget you got bigger issues than whose sitting in the white house!

Posted: Friday, January 4, 2013
Article comment by: So Tired

Unisource wouldn't be doing this if they had competition. The prices on everything is going up, but are the wages, no because this is a right to work state. Just another reason to move out of this outrageous area (state), maybe even country. So much for the Land of the Free.

Posted: Friday, January 4, 2013
Article comment by: Avg Joe

* Bangs head on desk * Unbelievable.... simply unbelieveable! It never ends!

Posted: Friday, January 4, 2013
Article comment by: Jack BeQuick

Welcome to the "Obama States of America" Higher taxes, higher utility bills, higher cable rates, higher health care and lower wages.

Posted: Friday, January 4, 2013
Article comment by: Jobless guardian Employee

This is the main reason Guardian closed this plant down in Kingman. Due to an already high cost of electric. If business can't make a profit in this town due to the cost of utility's they will close shop and move where it's cheaper, like Mosses Lake Whashinton. Utility's there are 1/3 of what it costs here. If they get the rate hike expect everything to go up with it.

Posted: Friday, January 4, 2013
Article comment by: Current Spike

I understand that UES MUST pass on it's costs to it's customers so it can continue delivery of it's services, pay it's own expenses, and maintain a good return to it's investors.

As Bill Rigsby of RUCO commented, " If UniSource is allowed to pass all of its fuel and power purchasing costs on to the customer, there's no incentive for the company to make prudent decisions."

The questions are 'How MUCH of UES's costs are necessary? How much of a price increase can the public bear? I'm not so sure that UES has been tightening their belts in this economy situation as most of the rest of us have been doing.

Posted: Friday, January 4, 2013
Article comment by: Thai Mai Shu

Maybe Unisource should cut back by 4.4% on their spending habits and save their rate payers the agony of having to forego something they need to pay these ever increasing utility rates.

If you look at how a major utility spends money like there is no end in sight you could easily see thay are far from frugal.

Tighten your own belts before you ask for more.

Posted: Friday, January 4, 2013
Article comment by: Rick O'Shea

To be pessimistic as usual, my sewer rate is going up again to a never seen before level, my medical coverage premium is going up because of ObamaCare, my taxes are going up because the government can't seem to quit spending, gasoline is on it's way back up, food prices are on the rise, homeowners insurance is going up because of claims from superstorm sandy, and now the electric company wants to raise rates, now isn't that the icing on the cake. About the only ones that I have not heard from yet is, the county needing to raise property taxes for one thing or another, the city of Kingman wanting to raise taxes on something or other, or the Mohave Comm. College needing more cash, all this and another year without a raise.
As for myself, well I have my health, I just want to see how long this type of system will hold up, I was taught in economics that no system can survive when more is going out than what is coming in so when does the system fail from taking too much.

Posted: Friday, January 4, 2013
Article comment by: What Again

What another rise in rates ?? Has unisource started taking obama s play book to heart ? You heard obama state "That under his plan the cost of engery will skyrocket " Just want to thank all the FOOLS that voted for all the left wing ideas, so when EVERY type of Engery goes thru the roof be sure to thank the free loaders that voted for obama.

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