UNS Electric, a Tucson-based utilities provider, is leading the charge on energy reform. Because of the booming popularity of solar panels, utility companies have struggled to balance this new method of energy delivery with traditional methods.
The trouble comes with keeping costs for customers low while still receiving the funds these companies need to continue offering their services. Most companies use a net metering cost system, which charges customers for the total kilowatts used. While this seems fair, it only works when all customers receive power in the same way. Because solar customers can sell back unused energy at retail prices, this unbalances their costs, giving the higher-income solar customers an unfair advantage over non-solar users.
The new method is called “demand charges,” a pay structure that prices customers’ monthly fees by the highest average of kilowatts used in a given timeframe over the month. This would cost higher-income customers more while still allowing them to sell back unused energy. Lower-income customers would benefit as UNS wouldn’t need to increase costs to cover their losses.
UNS spokesperson Joseph Barrios says of the benefits to customers, “Well, if I change how I consume energy, maybe, I don’t turn on all my appliances as soon as I get home. That lowers their demand and in the long run lowers their costs and our costs.”
The outcome is expected to set a precedent for other utility companies across the state.