Proposed Gas Rates for 2026 Support Safe, Reliable Service

For the first time in nearly 12 years, UniSource Energy Services has proposed new, higher base rates for natural gas service. The new rates, which would take effect in February 2026, would cover rising costs and support ongoing investments to ensure safe, reliable gas service.

New rates would:

• reflect more than $260 million we’ve invested since 2010 to maintain reliable service
• pass along higher operating costs for upgraded information technology, equipment and other needs
• serve the expanding energy needs of a customer base that has grown 14.5 percent since 2010
• provide greater support for low-income customers

Our current rates took effect in 2012 and are based on the costs we incurred in 2010. Our costs have increased significantly since then, including the prices we’re paying for equipment, parts, construction materials and other necessities. Though we’ve managed more than a decade without passing along those increases, new rates are now necessary to serve the needs of today and meet those of tomorrow.

Our request will be reviewed by the Arizona Corporation Commission (ACC), a five-member elected panel that sets the rates charged by public service providers. The review will include public hearings and opportunities for public comment.

UniSource’s service territory, the largest of any gas utility operating in the state, covers 50 percent of the state’s geographic area, including Mohave, Yavapai, Coconino, and Navajo Counties in Northern Arizona as well as Santa Cruz County in Southern Arizona. We deliver natural gas through about 3,100 miles of distribution mains and more than 156,000 service lines.

We've proposed a $5 increase in the monthly basic service charge, from $10 to $15, for all residential customers to cover higher fixed costs. This would help keep the bill impact from new rates as stable as possible through the entire course of the year, mitigating seasonal variation in bills. Usage costs would change only slightly to reflect a tax surcharge change and a new fee for energy efficiency programs such as low-income weatherization.

Under the proposed rates, the monthly average increase for customers with typical usage is projected to be $6.13. This estimate is based on annualized average usage of 45 therms per month, including peak usage of 101 therms in January – when the impact of the proposed rates would be $7.51 – and low usage of 14 therms in July, when the impact would be $5.35 per month.

Customers can mitigate the impact of higher rates by managing their energy usage. UniSource also provides resources that help customers pay their bills, from payment arrangements to low-income discounts and short-term assistance for qualifying customers.

We're proposing to expand our Customer Assistance Residential Energy Support (CARES) program to provide higher percentage discounts that benefit more customers. The proposed rates would expand household income eligibility to 200 percent of the federal poverty level from 150 percent. We’ve also proposed exempting low-income customers from any payment fees.

From 2012 through 2024, UniSource provided $5.6 million in discounts to qualifying low-income customers and raised $396,000 from customers to help pay energy bills for customers in need. We also donated more than $2 million over that time to charitable causes in the communities we serve. Those contributions were funded by corporate resources, not customers’ rates.

More than a decade of investments

Between 2012 and June 2024, UniSource invested approximately $269 million in assets associated with providing safe, reliable gas service to its customers, including investments in:

Growth, $134 million We’ve added 130 miles of gas distribution mains and 7,719 service lines to meet growing service needs in our large, sparsely populated service territory.

System Reinforcement, $60 million We’ve carried out large scale pipe replacement projects in Mohave and Yavapai Counties to meet customer needs and prevent loss of service during peak loads and extreme conditions.

Capital Improvement Projects, $26 million We’ve replaced mains and provided other services to support local road building and other regional capital improvement projects.

General Plant, $49 million We’ve upgraded communications equipment, operational and training facilities, information technology equipment and computers. We’ve also purchased new tools, laboratory equipment and service vehicles.

The new rates we’ve proposed will allow us to recover those costs while helping us fund future improvements, including $150 million in new business requirements and system reinforcement through 2029.

“We know affordability is critical to our customers. That’s why we’ve kept a focus on managing costs and have consistently asked our team to do more with existing resources,” said Susan Gray, UniSource’s President and CEO.

“We have been able to avoid asking for higher rates for many years despite rising costs and growing service demands,” Gray said. “But we need to start recovering on our recent investments in order to keep pace with the growth of our communities and maintain safe, reliable service.”

UniSource has achieved high levels of service and safety in recent years, including:

• excellent scores on our annual pipeline safety audits
• a considerably lower rate of recordable injuries than the industry average.
• prompt responses to nearly 390,000 calls from UniSource gas and electric customers last year, with an average speed of answer of about one minute

“This is truly remarkable and reflects our commitment to operating efficiently and keeping rates affordable for our customers,” Gray said.

Click here to read the press release.

In addition to a higher Customer Charge and increased energy rates, UniSource has proposed new mechanisms that will allow more gradual recovery of anticipated costs for investments in systems to serve our customers. By passing along these costs as they occur, we hope to avoid larger impacts that result from accumulations over longer periods between rate requests. See the FAQs below for more details.