ACC approves sale of Citizens to UniSource, rate hikes

Citizens Arizona Electric customers will see a 22 percent increase in electric rates as a result of the Arizona Corporation Commission approval Tuesday of the sale to UniSource Energy.

Citizens had asked for a 50 percent increase before its the sale to UniSource.

The rate request included $135 million in pass-through costs from the summer of 2000.

"The commissioners found no room in the sales agreement to reduce the rate increase below the 22 percent," commission spokeswoman Heather Murphy said.

The last Citizens electric rate increase was in 1995.

The commission locked in the rates until August of 2007.

If UniSource were able to negotiate a better wholesale power price with Arizona Public Service, 90 percent of the savings would be passed on to customers under the agreement.

Retail power competition in the area will allow industrial and large commercial customers to negotiate lower prices with other electric suppliers.

The commission approved a 21 percent increase in gas rates.

Citizens originally requested 29 percent and UniSource reduced the request to 23 percent.

The commission ruling requires UniSource to publicize low income and westernization programs in English and Spanish to decrease the impact on those customers.

Commissioners were concerned that too few people were taking advantage of the programs.

Statements my commissioners indicated the need to put the Citizen companies in the hands of an Arizona based company that wants to be in the electric and gas business.

ACC Chairman Marc Spitzer had called the Citizens gas and electric companies "orphans" with the parent company concentrating on telecommunications and selling all electric and gas utilities.

Some hurdles remain to close the sale including approval from the Securities and Exchange Commission.

Steve Lynn, UniSource spokesman, said the sale should be finalized in 30 days.

UniSource Energy Services, a subsidiary of UniSource Energy in Tucson, will begin serving 200,000 customers in Mohave and Santa Cruz counties.

Most current employees will be retained and customers should see little change in day-to-day operations Lynn said.

Dennis R.

Nelson, chief operating officer for the UniSource Energy Services, said the Arizona Company is community oriented and wants to develop a long-term relationship with the new customers.

Tucson Electric Company is the largest subsidiary of the parent company, UniSource Energy.