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UES Seeks New Electric Rates To Cover Investments In Service Quality

UniSource Energy Services (UES) is requesting new, higher electric rates to cover the costs of providing safe, reliable electric service and to continue maintaining the company’s financial health.

If approved, the rates UES proposed today in a filing with the Arizona Corporation Commission (ACC) would increase typical residential customers’ average monthly bills by about $3.60, or about 4.4 percent when compared to today’s electric rates, which are among the lowest in the state. Under the proposed rates, the average monthly electric bill of a typical residential customer would be about $86.

“Our current rates don’t reflect the investments we’ve made and expenses incurred over three and a half years to improve upon the high level of service customers have come to expect from UES,” said Paul Bonavia, Chairman and CEO of UES and its parent company, UNS Energy Corp. (NYSE: UNS). “We’ve reinforced and expanded our system infrastructure while investing in renewable energy and energy efficiency. Our proposed rates reflect the added value of these improvements, which have resulted in safer, cleaner and more reliable service for customers.”

UES’ total electric rates lag behind its service costs. UES’ current rate structure is based on costs incurred by the company in 2008. Since then, operating costs have increased due to such things as rising material costs, while sales have remained essentially flat due in part to government mandated energy programs.

Since 2009, the company has invested more than $157 million to acquire new power production resources, strengthen its distribution system and make other improvements to serve customers’ needs. Common utility benchmarks indicate that UES’ distribution operations rank among the most reliable in the industry.

UES also filed the rate proposal to satisfy a 2010 requirement from the ACC after it determined that the purchase of the Black Mountain Generating Station could be incorporated into the base rates of UES electric customers if certain requirements were met.

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