Making it another piece in its fall campaign to prepare the general public for steeply higher natural gas utility bills, the Arizona Corporation Commission (ACC) last Friday wrapped up a series of public hearings and workshops around the state on a request by UniSource Energy’s UNS Gas, Inc. utility proposal to increase eightfold an existing purchased gas adjustor (PGA) surcharge to cover its higher cost of wholesale supplies.

UNS Gas proposed a 27 cents/therm charge, compared with a current surcharge of 3 cents/therm; ACC staff is recommending a 19 cents/therm charge initially, moving up to 25 cents and eventually 30 cents/therm next year. The ACC indicated that it may come to a decision on the request at its Oct. 18-19 open meeting. Public meetings were held in four cities last month, ending Friday in Kingman, AZ, a commission spokesperson said.

“When voting at the opening meeting [later this month] the [five elected] commissioners have considerable latitude to decide how they wish to address the application and are not bound by UNS’s request or recommendations offered by the commission staff,” the ACC spokesperson said.

The utility argued in its application that ongoing high natural gas costs and the upcoming increased cost for service on El Paso Natural Gas Co.’s interstate pipeline system are the leading reasons why it needs the considerable increase in the PGA surcharge.

“UNS has stated that its unrecovered natural gas purchase costs have continued to rise even with the existing 3 cents/therm charge,” said the ACC spokesperson. UNS breaks down its surcharge request between about 19 cents/therm in projected gas commodity costs, and another 8 cents/therm for increased gas transportation charges on the El Paso interstate pipeline system.

In seeking public comments on the UNS application, the state regulators said they were carrying out a “broader effort to ensure the public is aware of natural gas price issues and is prepared for the impact of winter heating bills.” While electricity prices peak in the summer, domestic natural gas use peaks in the winter. Even in a Sunbelt state like Arizona, the average gas load in January is seven times what it is in August, the ACC spokesperson said.

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