Rate hike request by UniSource ripped by Kingmanites

DOUG McMURDO/Miner<br>
A large crowd gathered in the Mohave County Administration Building auditorium. None of the speakers favored the UniSource proposal.

DOUG McMURDO/Miner<br> A large crowd gathered in the Mohave County Administration Building auditorium. None of the speakers favored the UniSource proposal.

KINGMAN - More than 250 people were in attendance at the Mohave County auditorium Thursday, where the Arizona Corporation Commission heard three hours' worth of public comment regarding a proposed electric rate hike.

Dozens of them spoke and, perhaps not surprisingly, not one of them was in favor of a higher power bill. In fact, when a speaker asked those in attendance to stand up if they opposed the plan, everybody stood.

Chairman Doug Little and commissioners Andy Tobin, Bob Burns and Tom Forese, who was late due to traffic, received an earful from residents. Most were from the Kingman and Golden Valley area, as well as Dolan Springs and Meadview. A few came from the Phoenix region.

UNS filed an application for a rate increase 11 months ago, less than a year after it was purchased for $2.5 billion by Fortis Inc., a Canadian company that is one of the largest gas and electric energy providers in North America. Fortis also assumed nearly $2 billion of UNS debt, for a total price of $4.3 billion. The company reported total assets of $29 billion in fiscal year 2015 and revenue of $6.7 billion. Fortis President and CEO Barry Perry earned a base salary of $3.6 million, according to the company and multiple sources in the investment community.

Perry in a report to shareholders credited Fortis's purchase of UNS, among other acquisitions of U.S. utilities, for "a record year of transformation and growth in 2015, with all utilities contributing." Indeed it was. According to Fortis, its net earnings attributable to shareholders last year were $728 million, more than $400 million above 2014 earnings of $317 million.

Many who addressed the corporation commission cited those figures, and accused the company of corporate greed.

Applause line

A comment that received loud applause, one of many, came from Kingman resident John Boorsman, who seemed to sum up the mood of the audience when he said, "I don't mind helping the needy, but I'm not going to help the greedy."

The request for a rate increase, according to Little, targets only Mohave and Santa Cruz counties, two of the poorest in the state, but it does not impact the Tucson area, which UNS also serves among its more than 600,000 Arizona customers. There were accusations the company was using rural areas as "guinea pigs," thinking they wouldn't get the pushback a more populated area would give.

A voice for solar

Former Mohave County sheriff and current Phoenix resident Tom Sheahan was one of them. He spoke against the increase on behalf of the Alliance for Solar Choice.

Sheahan - and several other commenters - accused the company of wanting to put the rooftop solar industry out of business, but his focus was more on the financial reality of life in Mohave County.

"I know the everyday struggles of Mohave County residents," said Sheahan. "They can't afford these confusing charges." Sheahan also noted many residents survive solely on Social Security, others are in low-wage jobs, and that Mohave County has not recovered from the Great Recession like Phoenix and Tucson have.

Supervisors weigh in

Mohave County Board of Supervisors Chairwoman Jean Bishop read a letter from the board in opposition to the increase. "The majority of people in my district are on fixed or low income. This would be a hardship."

Bishop also noted the county has about 57 buildings countywide, with about half that are 12,000 square feet or less. "These buildings serve many missions that by their nature cannot control the peak demand," she said.

"A large portion of Mohave County is served by UniSource Energy Services," said Bishop. "Like UES, Mohave County has experienced declining revenues as a result of mine closures, lower industrial activity and other economic conditions. The county has responded by not raising taxes, but by lowering costs, cutting back on expenses, and generally doing more with less. We look to Unisource Energy Services to do the same."

While UniSource's bottom line may or may not be less than it was, it isn't economic conditions causing any shortfalls, but that people are doing more to conserve energy.

Conserve ... and pay more

Kingman resident and attorney Richard Basinger essentially accused UniSource of consumer fraud, saying state law forbids businesses from misrepresenting what they say, or don't say.

"The federal and state governments told us to insulate, and rates go up. They told us to change our lightbulbs, and rates go up. They told us to buy energy efficient appliances, and rates go up. They told us to install solar, and rates go up."

He said those who do install rooftop solar panels sink a sizable investment into the project, and that is money they will never get back. The bottom line, he said, is that people took the steps the government told it to take to save on energy costs, and it worked so well those people are now being punished.

Non-fuel revenue

The last increase was granted in 2013. The proposed addition to the monthly power bill seeks to raise $15.1 million in "base non-fuel revenue," which would reportedly add a 7.6 percent increase to customers' bills, or $5.25 a month. The average bill would go from roughly $69 per month to $74.20, said Little.

Of greater concern to many residents who spoke at Thursday's meeting is the proposed transition to a new rate structure in 2017 that would include a so-called demand charge, a concept most found confusing - and they believe UES deliberately made it difficult to understand. Demand charges are based on the highest hour of energy use during peak hours over a month. Critics contend the charge is punitive in that it punishes people who conserve their energy consumption. It was also mentioned most meters would have to be replaced because the ones used now do not have the capacity to record peak usage.

While businesses are routinely levied a demand charge, they are rarely included on residential bills. Most people agreed businesses have a right to make a profit, but they also agreed the utility company is a monopoly, albeit a regulated monopoly. Others said there should be a 3 percent limit to a rate increase, if any at all.

Fixed incomes

Most people in attendance were senior citizens - one man said the audience looked like a box of Q-tips - and many of them noted they received no increase in Social Security payments this year, and might not next year. The general feeling was, if we didn't get a raise, than neither should they.

People also said they were willing to pay for the power they use, but no more. Others favored a tiered billing system as is used in California in which customers pay less if they use less power, and more if they are heavy users.

Little told the Miner the corporation commission will decide whether to approve the request, probably in the third week of July. He assured those in attendance that there comments would be part of the permanent record and that they would be taken into consideration.