Residential customers of Citizens Arizona Electric can expect their monthly bills to rise between $3 to $5 thanks to a decision by the Arizona Corporation Commission to eliminate a credit.
The three-member panel voted on Wednesday to eliminate the credit of 0.553 cents per kilowatt-hour at the request of Citizens, which is also seeking a 25 percent increase over the next three years to offset higher costs for fuel.
The change, which will go into effect after a commission order is signed by the end of this week, will restore the amount Citizens is authorized to charge customers to recover its costs for buying electricity to 5.194 cents per kilowatt-hour, according to Citizens.
Citizens applied the credit to its customers in Mohave and Santa Cruz counties beginning in December 1999 after the company determined that it collected too much from customers in previous months when purchased power costs were lower than expected.
³This just brings us back to our base rate,² said Tom Ferry, director of Arizona electric operations for Citizens.
The ACC eliminated the credit because customers got their money back, ACC spokeswoman Heather Murphy said.
Besides eliminating the credit, the ACC approved changes to two existing programs that Citizens has provided only to residential customers.
Citizens may now offer its levelized payment plan to small businesses and provide a deferred payment plan.
The levelized plan enables customers to make equal payments for their electric bills over a 12-month period based on their history of electricity usage.
The deferred plan allows customers who cannot afford to pay a bill to defer paying a reasonable portion of it for up to six months.
³The whole idea is given the anticipated increase (in bills), this would help level their payments over the next 12 months,² Ferry said.
³We work with customers now who have difficulty paying their bills.²
Citizens officials announced on Sept.
28 that they applied to the ACC to raise electricity bills 25 percent because the company¹s power costs rose more than $54 million during the summer.
The typical residential customer in Kingman uses 623 kilowatt-hours a month, which comes to $49.84.
(That figure does not reflect the elimination of the credit.)
The utility is seeking the increase to pass along the higher costs over three years with the expectation that those costs will drop when the energy supply increases.
Citizens receives all its power from Arizona Public Service, based in Phoenix.
³The tremendous increases in energy charges have completely wiped out the reductions in electric demand charges we negotiated from APS last year,² said Sean Breen, director of energy services for Citizens.
Passing along the higher costs and removing the credit will add $12.60 a month to the bill of an average Kingman residential customer, according to a press packet from Citizens.
Besides that increase, residential customers also face an additional charge of $1 to $4 per month under a request from the company to recover future power costs based on a phased-in, 12-month rolling average.
The proposals are considered fuel cost adjustments and not rate hikes, Murphy said.
³A rate case is an elaborate, lengthy proceeding where all costs and all revenues will be examined,² she said.
She said the ACC staff is examining the details of the proposed adjustments.
Citizens has about 55,000 customers in Mohave County and around 16,000 in Santa Cruz County.
Citizens also is trying to sell its electric division to Cap Rock Energy Corp.
of Midland, Texas.