Customers of UniSource Energy Services should be confident that our electric bills reflect only their fair share of the costs we incur to provide their service.
So when rising costs compelled us to seek higher rates this year, we proposed a more accurate method of billing customers for their energy use. The resulting rates would increase the average bills of typical residential customers by an estimated $6.27 per month. The higher figures cited in recent articles in this paper were based on an earlier proposal.
That increase reflects the cost of recent investments to maintain safe, reliable and sustainable service, including new solar energy resources and our shared purchase of an efficient natural gas-fired power plant.
The need for higher rates has gone largely unquestioned during a public hearing about our proposal. Instead, some stakeholders have criticized proposed changes to the line-item charges that appear on our bills - changes that are designed to have no effect on the total revenue we recover from customers.
For example, our proposed $5 increase to the monthly residential customer charge would allow a more modest increase to the rates we charge for energy use. This shift makes sense, since most of the costs we incur to serve residential customers are fixed - that is, they don't vary with usage.
Additionally, instead of just tracking total usage, our proposed residential rates also would reflect customers' highest hourly energy use - but only during periods of peak energy demand. This "demand charge" would not increase UES revenues because it would be offset by lower usage-based charges. Rather, it would ensure that electric customers pay an equitable price for the cost we incur to serve them, which has more to do with when they use energy than their total energy use.
The higher costs we would recover through our proposed rates are driven by infrastructure investments that help us satisfy our customers' peak energy demands. By rewarding customers for reducing demand, our proposed rates would help reduce the need for such increases in the future.
If the rates are approved, customers would have more control over their monthly energy costs. UES would offer new energy efficiency programs and provide information and education to help customers reduce their peak hourly energy use. Our customers could lower their bills by using less energy overall, as they do now, and by reducing their demand during peak usage periods.
UES is seeking to provide limited-income customers with larger bill discounts under our proposed rates. We also have proposed exempting our existing solar customers from use of our redesigned rates if they installed or secured UES approval for their systems before June 1, 2015.
Rooftop solar systems would remain an affordable option. Typical residential customers could reduce their bills by nearly $60 per month by going solar under our proposed rates, even though they would be paying a fair portion of the cost of their use of UES facilities during peak usage periods.
We encourage our customers and other readers to learn more about our rate proposal and upcoming community meetings by visiting our website at uesaz.com. While nobody likes price increases, our proposed rates are designed to ensure that customers pay a fair price for the safe, reliable service we provide.
David G. Hutchens is president and chief executive officer of UniSource Energy Services and its parent company, UNS Energy.