The Arizona Corporation Commission (ACC) granted Tucson-based UniSource Energy Corp.’s UNS Gas a 3.6% rate decrease Wednesday for its customers in the northern half of the state. A 4-cent/therm credit will be available to customers beginning Oct. 1 and running through April 30 next year.
In January regulators estimated that an average residential bill for a UNS customer using 107 therms will be about $118.79/month after the credit is applied ($123.07/month without it). The ACC’s action was part of the utility’s annual purchased gas adjustment (PGA) procedure that adjusts retail rates to reflect recent wholesale costs of gas and projections for where those costs will go next year.
UNS Gas is limited in its PGA account to over-recovery (revenues in excess of actual gas costs) at the $4.45 million level. As of June, UNS had a positive balance of $10.7 million in its PGA account, regulators said.
Lower gas costs are due to mild spring weather, significant liquefied natural gas (LNG) imports, high gas storage inventories and the lack of significant hurricane activity in the Gulf of Mexico, regulators said. However, the ACC warned that “natural gas prices could spike quickly in the coming months if market and weather conditions change.”
The ACC also doubled the size of the credit — from 2 cents/therm to 4 cents/therm — as a result of a recent rate case settlement between El Paso Natural Gas Co. and its shippers, including UNS Gas, which gets a $2 million refund from that settlement.
“It is about time to see natural gas prices headed lower,” said ACC Commissioner Jeff Hatch-Miller, the immediate past chairman of the commission.
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