Arizona Public Service residential customers will pay 88 cents more on their monthly electric bills to cover the higher cost of renewable energy under a program approved by state utility regulators.
The Arizona Corporation Commission OK'd an increase Wednesday in the monthly renewable energy surcharge to $1.32 from the previous 44 cents, effective May 1.
For business customers, the surcharge increase was much bigger - rising $48.84 a month for small businesses and $146.53 for large industrial users.
On Thursday, the commissioners approved similar plans for other regulated utilities in Arizona, notably Tucson Electric Power, to encourage them to develop more renewable energy.
Arizona utilities are under a state mandate to obtain 15 percent of its electricity from renewable sources such as wind, solar and geothermal by 2025.
Barbara Lockwood, APS' manager of renewable energy, said the increase will keep the Phoenix-based utility on track to meet that goal.
"We're feeling pretty happy with where we're at right now," she said.
The increase will bring an additional $13 million to APS this year, nearly double what it collected in renewable energy surcharges last year. That will allow the utility to obtain more than 2 percent of its total electricity supply from renewables this year, she said.
That money will go toward buying geothermal and wind-produced energy from independent power suppliers and paying rebates to customers installing renewable energy equipment on homes and businesses.
Lockwood said the additional funds will increase the number of customers who can receive rebates, encouraging homeowners and businesses to install solar equipment.
"We hope to add thousands more this year," she said.
In addition, APS is participating in a biomass generating plant near Snowflake expected to begin operating in a few months using waste wood from Arizona's national forests as part of its fuel source. Also, the utility has said it will purchase power from a huge solar-thermal plant near Gila Bend beginning in 2011.
Commissioner Kris Mayes, who voted for the higher tariffs for APS and other utilities, said it is a modest price for electricity users to pay to expand clean, renewable energy.