By Matthew Holloway |
The Arizona Corporation Commission approved a temporary bill credit for UNS Electric customers, expected to reduce monthly costs during peak summer usage.
According to a Wednesday press release, the Commission approved an $18.50 monthly credit for customers with average usage of 884 kilowatt-hours. The credit will be in effect from May 1, 2026, through December 31, 2026. The measure was approved in a 5–0 vote during the Commission’s open meeting on April 8.
The adjustment is tied to the Purchased Power and Fuel Adjustment Clause (PPFAC), a mechanism which utilities use to recover fuel and purchased power costs. The Commission stated that utilities do not earn a profit on expenses recovered through the PPFAC.
Commissioner Kevin Thompson said in the release that the credit follows the Commission’s earlier action to address a significant under-collection in the PPFAC balance.
In May 2023, the Commission approved a temporary surcharge to reduce the balance, which was accruing interest costs that were being passed on to ratepayers.
“The Commission had to make a tough vote in 2023 to pay down significant fuel cost debt that had been allowed to build as a result of circumstances outside the utilities’ control,” Thompson said. “As a result of the temporary surcharge, UNS was able to rapidly pay down the debt and save ratepayers money in the long run. Asking ratepayers to pay more in their monthly bills to pay down costs is never an easy task, but this solution removes the massive debt hanging over the heads of the ratepayers and provides additional bill relief when customers need it most.”
The surcharge was eliminated in December 2025 after the balance was paid down. The Commission said that the change reduced the average residential customer’s bill by approximately $20 per month.
Following the removal of the surcharge, the utility reported a positive PPFAC balance of $5.6 million in mid-February 2026, which has continued to grow.
According to the release, UNS Electric began experiencing under-collection in October 2021, which grew to approximately $48 million. The deficit was attributed to increased natural gas prices during the COVID-19 pandemic, extreme weather events including Winter Storm Uri, and global energy market impacts related to the Russian invasion of Ukraine.
“As we are approaching the summer heat, I am glad the Commission was able to provide some rate relief for customers in Kingman, Lake Havasu, Nogales, and other smaller communities in Mohave and Santa Cruz counties,” Chairman Nick Myers said in a statement.
With the new temporary credit in place, the Commission said a typical residential customer is expected to see an average monthly reduction of approximately $38 this summer compared to the same period last year.
“As regulators we often have to make difficult decisions as we balance the various interests involved in ratemaking,” Myers said. “In this case, I am pleased that our difficult decision to address the PPFAC in 2023 has resolved the problem and resulted in a meaningful reduction in rates for UNSE customers through the end of the year.”
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
