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AZ Rate Case

What utility services does Alliant Gas provide to its customers?

Alliant Gas is a public service corporation providing propane gas utility service in and around the communities of Payson and Page, Arizona.  Alliant Gas serves approximately 7,150 customers in its Payson Division and 1,280 customers in its Page Division.

How are Alliant Gas’ rates for gas utility service determined?

Rates for Alliant Gas’ regulated propane utility services are set by the Arizona Corporation Commission (ACC).  The ACC sets rates based on the recovery of operating expenses and an appropriate rate of return on the fair value of the utility plant in service to its customers.

When were the last rate increases for the Page and Payson Divisions?

For the Page Division, the current rates were approved by the ACC in December 2002.  For the Payson Division, the current rates were approved in May 2012.

Why has Alliant Gas filed a general rate case with the ACC?

Because the Arizona Corporation Commission ordered Alliant Gas to file a rate case for its Page and Payson Divisions as part of the company’s action to refund customers the income tax reductions resulting from The Tax Cuts and Jobs Act of 2017.

What rate relief is Alliant Gas seeking from the ACC?

Alliant Gas is seeking a revenue requirement equal to approximately $2.71 million for the Page Division, an increase of about $357,000 or 15.15 percent over test year revenues.  The Page Division’s proposed rate base is $1.0 million and the overall rate of return requested is 7.84 percent.  For the Payson Division, Alliant Gas is seeking a revenue requirement equal to approximately $7.80 million, an increase of about $1.136 million or 21.12 percent over test year revenues.  The Payson Division’s proposed rate base is approximately $9.55 million and the overall rate of return requested is also 7.84 percent.

What is driving the need for the rate increase?

Both divisions have experienced increases in operating costs since the current rates were set.  In addition, capital investment in utility plant used to serve customers has been made.  New rates will allow Alliant Gas to recover its reasonable costs of service, including an opportunity to earn a reasonable rate of return on its capital investment.

What types of cost increases has Alliant Gas experienced since the current rates were set?

Alliant Gas is running the Payson Divisions based on historical costs that are a decade old and the Page Division’s rates were set based on operating expenses from two decades ago.  In the intervening years Alliant Gas’ costs for property taxes, insurance, labor, technology, depreciation and administrative among other costs have increased.  The new rates approved for the Page and Payson Divisions will be based on Alliant Gas’ 2018 operating costs with appropriate adjustments for known and measurable changes to that test year.

What are some of the significant capital improvements that have been made since the last rate cases?

For the Payson Division, Alliant Gas was recently mandated through a settlement with the ACC to replace almost 50 miles of old pipeline and the Company has already spent more than $1.75 million replacing pipe in the Payson Division.  In the Page Division, the Company recently completed a new propane storage facility.  Recovery of a return on these investments is crucial as the Company has been ordered to spend an estimated $20 million in the Payson Division over the next 15 to 20 years.  Alliant Gas needs to be able to attract capital to make these improvements and continue to ensure the highest standards of public health and safety.

What is the impact of the proposed rate increase an average residential customer’s bill in the Page and Payson Divisions?

For the Page Division, the average increase request is $12.23 per month, with the typical bill rising from $46.76 to $58.99 per month.  For the Payson Division, the average increase request is $14.89 per month, with the typical bill rising from $59.27 to $74.15 per month.  These estimated rate impacts will vary with monthly propane consumption.

When will the proposed rates take effect?

Alliant gas estimates that new rates are expected to be implemented in or around the fourth quarter of 2020.

Can interested persons intervene in the rate case?

Yes, the deadline for intervention is March 2, 2020. In order to intervene, an application must be filed with the ACC in the rate case docket.

How can I contact the Arizona Corporation Commission?

For inquiries regarding the rate case, please contact the Corporation Commission’s Consumer Services Section at 1-800-222-7000 (toll free) or visit https://www.azcc.gov