Even with wholesale natural gas prices plummeting since mid-summer, UniSource Energy Corp., the parent to Tucson Electric Co. and small combination gas-electric utility operations, announced last Wednesday that its gas costs this winter will be 8-16% higher than last winter. UniSource Energy Services (UES) purchases supplies for the parent company’s combination power and gas utility operations in Arizona.

UniSource also said it plans to file with the Arizona Corporation Commission (ACC) later this year for a rate increase to recover its increased costs of delivering natural gas utility service to customers in some of the less-densely populated parts of the state. “The new rates would not take effect before the second half of 2009,” a UniSource spokesperson said, noting the increase will not impact customers’ winter bills.

UniSource’s last gas rate increase came in November last year, raising charges by about 4%.

While acknowledging that recent reductions in wholesale gas costs could mean its higher-end projections won’t materialize, UniSource now estimates its per-therm cost of natural gas service will be $1.23/th through November, and could rise as high as $1.24/th in December; $1.26/th in January; $1.27/th in February; $1.31/th in March; and finally, $1.32/th in April next year.

Comparatively, last winter, charges were between $1.09/th and $1.16/th due in part to a purchased gas adjustor (PGA) rate credit of 4 cents/th, UniSource said.

Including a $8.50 monthly service charge for residential gas customers, the average seasonal peak winter gas bill is projected to be $142 in December, UniSource said.

“These projected costs represent UES’s best estimate at this time,” the spokesperson said. “Fluctuations in the wholesale gas market or any unanticipated change to the gas-related charges on UES bills could increase or decrease the actual amount customers will pay for gas this winter.”

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.