The massive crowd at Thursday’s Arizona Corporation Commission meeting spilled into the lobby and down the parking lot, and they weren’t happy.
Four commission members traveled to Lake Havasu City to hear what citizens had to say about UniSource Energy Service’s proposed new rate structure based on demand that some attendees said was an unfair billing method.
The Commission announced that given the overwhelming turnout it would hold a second meeting in Lake Havasu City to accommodate the larger crowds. A date and location will be set for the meeting, expected to happen within the next two weeks.
Rates will not change until the commission gathers all public comments and votes on the proposal.
“There will be no final determination of whether there will be changes in rates, how much rates may change, or what the rate design will look like until after a final vote of the Arizona Corporation Commission,” Commission Chairman Doug Little said.
As citizens approached the podium to address commission members on Thursday night, their comments were of confusion, concern and frustration as they face potentially higher electric charges.
“I gave up a career to work for the school district as a technician, getting half my pay, so I can be there for my kids,” Havasu resident Matt Marten said. “This scares me. I’m not here just because I’m angry about it. I’m here because I’m scared that there’s going to be months coming if this passes that I don’t know what I’m going to do.”
What would change?
UniSource is proposing a rate structure that would take effect in 2017. The rate structure would measure a customer’s peak electric use in a given time, what they call a demand charge. UniSource said the higher demand charge could be offset by lower usage rates in place during other times.
“Some parties have presented testimony that demand charges have certain benefits that demand charges have certain benefits and allow customers to reduce their bills,” Little said. ”Other parties oppose demand charges, stating that they are confusing and will increase bills.”
The new rate structure will inadvertently reduce discounts to solar customers, who sometimes invest thousands of dollars to install home solar systems.
One of those solar customers is Julie Zemojtel, who spent $40,000 on a solar system last fall after spending months researching the best way to cut electric costs. Under UniSource’s current proposal, people who purchased solar systems before June 1, 2015, would be grandfathered in to a three-part rate.
“We are most concerned about the lack of knowledge we had in September when we started this process and finished and went live in November regarding this rate change,” Zemojtel said. “I would have never in a million years, being as fiscally responsible as me and my family are, would have purchased the system.”
UniSource Supervisor Joseph Barrios said UniSource is waiting to hear on recommendations on how to best move forward with solar customers.
“[The unit would] still pay for itself and customers could still save on their bills, it would just be different and may take a little longer,” Barrios said.
According to the proposal, Unisource is changing the rate structures for residential customers to achieve a requested $15.1 million increase in non-fuel revenue. That revenue would be used to compensate resources during peak demand periods. He said UniSource sometimes cannot generate resources to cover that amount of demand, so it has to purchase power.
“The company’s request, if approved, would increase the average monthly bill over a residential customer using 664 kilowatt hours by $5.25, a 7.6-percent rate increase,” Little said. “The bill would go from $68.96 to $71.24.”
The proposal would also double annual assistance for customers on limited incomes to $1.3 million, which would offset the increased rates to those who qualify.
What isn’t changing?
The proposal does not call for electric meters on appliances, as some people believed.
“There’s really no special equipment, you don’t have to install meters on your appliances, it’s simply a matter of being aware of how you’re using energy,” Barrios said. “If you can change your behaviors or change the way you energy, you can work that charge.”
Barrios said UniSource would provide customers with their demand data along with educational materials as they transition to the new rate structure.
Other charges on customers’ bills will not change, including current tiered rates, natural gas surcharges and time-of-use rates.