October 8, 2008

UES Expects Higher Winter Bills Due to Increased Natural Gas Prices

Due to increases in the price UniSource Energy Services (UES) pays for natural gas, the cost of gas service this winter is expected to be between 8 and 16 percent higher than it was last winter.

The per-therm cost of UES natural gas service is expected to be $1.23 through November and could rise as high as $1.24 in December, $1.26 in January 2009, $1.27 in February 2009, $1.31 in March 2009 and $1.32 in April 2009. Recent reductions in the cost of gas, though, could lead to rates that are lower than these high-end projections.

Last winter, the cost of service fluctuated between $1.09 and $1.16 per therm due in part to a Purchased Gas Adjustor (PGA) Credit that reduced gas costs by 4 cents per therm.

After including an $8.50 monthly residential customer charge, average UES residential gas bills are projected to reach a seasonal peak as high as $142 in December before taxes and fees. That estimate is based on anticipated usage of about 107 therms, so customers with above average usage should expect higher bills.

These projected costs represent UES' best estimate at this time. 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.

UES cannot control the price of natural gas, and the company does not benefit from higher costs. Instead, UES purchases gas for customers on the wholesale market and passes its cost along to customers without any markup. The cost of natural gas accounts for more than 60 percent of the amount UES customers will pay for gas service this winter.

Meanwhile, the costs UES incurs to deliver gas to customers continue to rise. To help cover those expenses, the company expects to file a request with the Arizona Corporation Commission (ACC) later this year for new, higher distribution rates. Those new rates would not take effect before the second half of 2009, so the request will not affect bills this winter. UES' rates were last raised in November 2007, increasing residential bills by an estimated 4 percent.

Bill Payment Assistance Available

UES offers many ways to help customers reduce the impact of rising natural gas prices on their winter gas bills.

 -- Budget Billing. UES's Budget Billing program eliminates seasonal swings in energy costs by charging a fixed monthly amount based on customers' estimated annual gas use. Since most people use more gas when the weather gets cold, Budget Billing typically reduces winter bills and increases summer bills by spreading out home heating costs across warm weather months.  Customers who sign up for the program now would likely be billed an amount that represents an increase over their typical summer bill and a savings off their typical winter bill. UES adjusts the amount periodically to account for changes in usage, so customers' costs will rise if they increase their year-round energy use.  -- Energy Efficiency. UES can help customers find ways to reduce their bills through conserving energy. The company's Web site, uesaz.com, features a variety of energy saving tips as well as the UES Energy Advisor, an interactive guide to improving a home's energy efficiency. Customers also can call 1-877-UES4YOU (1-877- 837-4968) for more energy saving advice.  This winter, UES also is offering rebates of up to $325 toward the purchase of new, energy-efficient gas furnaces. Depending on the equipment it replaces, a high-efficiency furnace can reduce the energy use for home heating by up to 142 therms per year, generating savings of up to $1,960 over 15 years. The amount of the rebate depends on the size and type of equipment purchased. For more information, visit uesaz.com.  -- Low-Income Assistance. UES offers several programs designed to help those hardest hit by high energy costs.  The CARES program offers a reduced monthly customer charge and discounts of up to $15 per month to customers whose household income does not exceed 150 percent of the federal poverty level. A family of four with a monthly gross household income of $2,651 or less is eligible for assistance through CARES. To find out if they qualify for this discount, customers should contact UES soon to be sure their registration can be completed before heating season arrives.  UES has joined its customers in supporting Warm Spirit, a program that provides qualified residents with emergency assistance in paying their bills. UES matches its customers' contributions to Warm Spirit dollar for dollar to provide additional resources for needy families.  UES also provides "weatherization" funds for social service agencies that help low income customers make their homes more energy efficient. The program provides for increased insulation, weather stripping, furnace replacement and other improvements.  To apply for weatherization assistance, customers in Coconino, Navajo and Yavapai Counties can contact the Northern Arizona Council of Governments, 119 E. Aspen Ave. in Flagstaff at (928) 774-3756. Mohave County customers can contact the Western Arizona Council of Governments, 208 N. 4th St. in Kingman at (928) 753- 6247. Santa Cruz County customers can contact the Southeastern Arizona Community Action Program, 490 Chenoweth in Nogales, Ariz., at (520) 287-5066. 

For more information about any UES program, customers are encouraged to call 1-877-UES4YOU (1-877-837-4968) or visit the company's Web site at uesaz.com. Customers also should look for bill inserts promoting these programs.

UniSource Energy Services, a subsidiary of UniSource Energy Corporation (NYSE: UNS), provides gas service to more than 146,000 customers in Mohave, Yavapai, Coconino, Navajo and Santa Cruz Counties. UES also provides electric service to more than 90,000 customers in Mohave and Santa Cruz Counties. For more information about UniSource Energy Services, visit uesaz.com. For more information about its parent company, UniSource Energy, visit uns.com.