Largest Arizona utility wants 20 percent rate increase

PHOENIX - Arizona Public Service, the state's largest electricity provider, will ask regulators for a 20 percent rate increase to go into effect by the end of 2006. APS officials said they need to boost rates because of the skyrocketing price of natural gas and to pay for new facilities and other costs. The average residential bill will go from $100 a month to $120 if the $480 million increase is approved by the Arizona Corporation Commission. The price increase is in addition to an $80 million temporary price "adjuster" the utility is asking for. That surcharge would add 1.7 percent to the average bill for two years and then expire. APS said in a release that the price increase was needed because of soaring natural gas prices. The price of gas has gone from $2 to $14 per million British Thermal Units in the past three years. "Everyone is experiencing unprecedented prices at the gasoline pumps," APS president and CEO Jack Davis said in a statement. "Similar increases in fuel prices are having a dramatic impact on our business and the price of electricity." The utility said it will file the request with the corporation commission, which will set a hearing schedule. The commission must approve rate increases by APS. If approved as filed, average commercial rates would go up by 19.5 percent and industrial rates by 21.5 percent. In addition to the rate increase request and the "adjuster" request already before the commission, the utility plans to ask to charge customers $40 million it spent to buy replacement power needed during several unplanned outages at the Palo Verde Nuclear Generating station in the past year. APS provides power to about one million customers across the state, including much of the metro Phoenix area.