Electric customers face surcharges for alternative energy

Residential customers of Citizens Energy Services can expect their bills to rise by as much as 35 cents a month as part of a statewide plan to encourage the development of solar power and other alternative energy sources.

The surcharge, which goes into effect Tuesday, will apply to only the first 400 kilowatt-hours of usage for residential customers, according to a press release from Citizens.

Customers who use under that amount would be charged smaller surcharges.

The typical residential customer in Kingman uses about 650 kilowatt-hours a month, said Carl Dabelstein, the utility's vice president for regulatory affairs.

Citizens also will impose a surcharge of up to $13 per month for business customers, including hotels, schools and office buildings.

That figure is based on a monthly use of 14,857 kilowatt-hours.

Industrial customers that use more than 3,000 kilowatt-hours for three months in a row face a cap of $39 per month.

A surcharge varying between 4 cents and 13 cents per month will apply to dusk-to-dawn lights, depending on the lighting fixture.

Citizens is imposing the surcharges to comply with rules adopted by the Arizona Corporation Commission that require all regulated utilities in Arizona to generate or derive a portion of their electrical power from renewable or "environmentally friendly" sources.

The surcharges will appear on bills as line items.

Citizens serves as 58,000 customers in Mohave County and around 13,000 customers in Santa Cruz County in southern Arizona.

The Environmental Portfolio Standard requires the utilities to generate a minimum of 0.2 percent of their total energy sales from renewable resources this year.

The percentage will increase each year to 1 percent in 2005 and tops out at 1.1 percent in 2007, according to a press release from the commission.

"It was established without an analysis of any company's cost," Dabelstein said.

"This is something that the company did not seek.

It was imposed by the commission.

They looked at the (electricity) situation in California, where there is a shortage in capacity."

While Citizens is tacking on the surcharge, the Mohave Electric Cooperative, based in Bullhead City, has postponed it for about six months, public relations manager Diane Valentine said.

Mohave Electric serves about 30,000 meters in a service area that includes the Hualapai Mountains, Wikieup, Valle Vista, Truxton and Peach Springs.

Mohave Electric postponed the surcharge because the ACC has not conducted a public hearing on stranded costs in advance of extending deregulation to its customer base, according to Valentine.

Stranded costs are costs that utilities pass on to customers to recover their investments in power plants and other utilities.

Once the surcharge goes into effect, it will be similar in amount to the residential one that Citizens will impose, Valentine said.

Both Citizens and Mohave Electric charge about 8 cents per kilowatt-hour.

At 650 kilowatt-hours per month, the typical residential bill comes to about $52, Dabelstein said.

Citizens also applied to the ACC to pass on higher fuel costs over a three-year period.

Citizens derives most of its power from Arizona Public Service, based in Phoenix.

By contrast, Mohave Electric is a distribution co-op with an ownership interest in a 520-megawatt power plant in southeastern Arizona operated by the Arizona Electric Power Cooperative.

Mohave Electric also has access to federal hydroelectric power and wholesale electricity that AEPCO can buy from an interconnected power grid.