Arizona utility purchased power bill triples

Citizens Utilities which serves 68,000 electricity customers in northwestern and southern Arizona but owns no electric generation of its own is reeling from a tripling of its purchased power bill. The utility's June bill for purchased power amounted to $15 million, compared one that is usually about $5 million. So far the utility, which owns Kingman Energy and Mojave Electric, is stuck with the bill. It can�t pass the higher costs through to customers�at least not yet.


Ann de Rouffignac
OGJ Online

Citizens Utilities which serves 68,000 electricity customers in northwestern and southern Arizona but owns no electric generation of its own is reeling from a tripling of its purchased power bill.

The utility's June bill for purchased power amounted to $15 million, compared one that is usually about $5 million. So far the utility, which owns Kingman Energy and Mojave Electric, is stuck with the bill. It can�t pass the higher costs through to customers�at least not yet.

Citizens buys power from Arizona Public Service under a long-term contract with Arizona Public Service, says Fred Kriess, Citizens spokesman. A fuel and purchased power adjustment clause allows Citizens to pass costs exceeding the approved rate of 4.6�/kw-hr on to customers.

If the utility pays more than $2.6 million in additional costs, then it can file an application with the commission to get approval to recover the costs from customers, says Kriess.

This time it won�t be that simple. Negotiations are under way among Citizens, state regulators, and its supplier Arizona Public Service to address the problem. Citizens and the commission will have to work something out, says Heather Murphy, commission spokesperson.

�It�s not realistic that we could expect to triple our customers bills though,� says Kriess. �Given the magnitude of the impact, we are exploring all the possibilities.�

Meanwhile, who will pay the $10 million for the additional cost of power in June is up for discussion. Kriess�who expects even worse figures for July�says the utility is looking carefully at what it pays for power and what other pricing scenarios are possible.

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