While energy efficiency has reduced electricity use, customers of Arizona Public Service will see their bills increase in March from an average of 38 cents to $2.75 per month to offset increased infrastructure costs.
The $2.75 charge will stay for four years while the lower rate of 38 cents could change once a year over the same time frame, according to Damon Gross, a spokesman for APS in Phoenix. He added that the charge could be as low as 26 cents.
He said consumers will pay the lower cost if they select the new option of Lost Fixed Cost Recovery percentage of a bill charge. The $2.75 charge would apply if consumers were to accept the existing customer charge of the Flat Charge Option.
A notice to APS customers states they will pay more because the Arizona Corporation Commission this past May approved new rates.
The new rates have to do with an energy-efficiency program, ACC Communications Director Rebecca Wilder said. Energy efficiency includes using compact fluorescent light bulbs and installing solar panels.
"The company encourages people to use less energy, but the company still has fixed costs they need to recover," Wilder said.
Those fixed costs include power lines, other infrastructure, service and "the cost of bringing power to the customer," Wilder said.
Wilder said the rate hike for APS emerged from a settlement agreement that included parties such as AARP and the Residential Utility Consumer Office.
Gross concurred, saying the LFCR charge came out of those talks.
"We've encouraged our customers to be more energy efficient," Gross said. "And they are saving a lot of money, and that is great. The challenge is when our customers took these measures it was reducing the amount of revenue that we recovered for fixed costs."
Gross said the ACC mandates a 22 percent cut in electricity use by 2020. He added the typical APS customer would pay 38 cents more per month based on the use of 1,100 kilowatt-hours.
"This is a nominal fee that will enable us to continue energy efficiency," Gross said.
The average APS customer pays $132 per month based on 1,100 kilowatt-hours, Gross said.
He advises APS customers to contact the utility company to select the LFCR or flat rates. The toll-free number is 877-371-6820.
For additional information on the rate settlement, go to azenergyfuture.com.