How to read my bill

TEP's rates reflect the cost of providing safe, reliable electric service to our customers. They also reflect the complexity of that task, with fixed charges, usage-based charges and surcharges that can be difficult to understand. The following summary offers explanations for the terms you'll find on your monthly bill, including links to details posted elsewhere on this website.

Jump to a section: Delivery Services | Power Supply Charges | Green Energy Charges | Taxes and Assessments | Other bill related info

Delivery Services

The charges listed in this section of your bill recover the cost of delivering power to customers. These charges reflect the cost of poles, wires, transformers and other infrastructure; employees and contractors who install, operate and maintain that equipment; and other necessary business expenses.

The Arizona Corporation Commission (ACC) sets rates that divide responsibility for these costs among different types of customers — residential, small business, large business and industrial — based on their typical energy usage patterns. TEP's rates are designed to recover the appropriate portion of these costs from each customer group through a combination of fixed fees and usage-based charges.

Basic Service Charge

Energy Charges

Electric usage is measured in kilowatt-hours (kWh) — the use of one kilowatt of electric power for one hour. TEP's rates include separate kWh charges for energy delivery and power supply costs.

The kWh charges for delivery services vary based on several factors.

The rate is higher in the "summer" — defined as May through September — than during the rest of the year — which, for simplicity's sake, is called "winter." The difference is due to the higher cost of serving customers during peak usage periods. Because your bill reflects usage from 30-day periods that often include parts of two months, some bills include kWh charges calculated at both summer and winter rates.

Also, this kWh rate increases as energy use rises. TEP's residential rates include three tiers: 0-500 kWh, 501-1000 kWh and 1,001 kWh and above. The kWh charge is lowest for usage in the first tier and increases with each successive tier.

Finally, customers who have signed up for a time-of-use pricing plan pay different kWh charges at different times of the day. Charges are higher "on peak" — during periods of high electric usage — and lower "off peak."

KBH

Demand Charge

Acquisition Credit

Power Supply Charges

This section of your bill includes usage-based charges to cover the cost of generating or buying energy for customers.

kWh charges

All power supply costs are recovered through usage-based fees measured in kilowatt-hours (kWh) — the use of one kilowatt (kW) of electric power for one hour.

Power supply kWh charges are higher during the "summer" — from May through September — than during the rest of the year, which is referred to as "winter." The higher summer rate reflects increased energy costs during that period. Because bills often reflect usage from parts of two months, some bills include kWh charges calculated at both summer and winter rates.

Customers who have signed up for a time of use (TOU) rate pay different power supply kWh charges at different times of the day. Charges are higher "on peak" — during periods of high electric usage — and lower "off peak."

PPFAC

The Purchased Power and Fuel Adjustment Charge (PPFAC) is a usage-based charge or credit that reflects changes in energy costs that aren't covered by the kWh charges for power supply. The PPFAC typically is adjusted annually to reflect recent and projected power costs as well as other factors. The PPFAC does not include any profit — it simply passes along TEP's costs.

The latest PPFAC charge can be found on the TEP Statement of Charges.

Solar Block(s)

Customers who participate in the GoSolar Shares will see a charge in this section of their bill for the “blocks” of solar energy they’ve agreed to purchase. These blocks are billed at a fixed rate that replaces the PPFAC and power supply kWh charges for that usage. Any usage that exceeds the amount covered by the customer’s solar block will be subject to standard power supply charges. Any unused blocks will be carried over and applied to future bills.

Green Energy Charges

TEP is using more renewable power, helping customers save energy and improving the environmental profile of its generating resources. Some of the costs associated with these efforts are recovered through usage-based surcharges approved by the ACC and listed in this section of your bill.

Renewable Energy Standard Tariff

DSM Surcharge

ECA

LFCR EE, LFCR DG

Taxes and Assessments

The charges on your bill are subject to government taxes and fees. TEP forwards all of the money collected from these charges to the appropriate authorities.

ACC Assessment

RUCO Assessment

AZISA Assessment

City Franchise Fee

TEP has reached formal franchise agreements with the cities of Tucson and South Tucson that authorize its use of public rights-of-way and address other aspects of operations. These agreements, which were approved by voters in both cities, also mandate that franchise fees of 2.25 percent in the City of Tucson and 2 percent in South Tucson be added to the bills of customers in those municipalities. All proceeds of those fees are forwarded to the respective city governments.

Public Utility Tax

The City of Tucson charges a Public Utility Tax of 4.5 percent for customers within the city's boundaries. Because this tax is offset by the city's 2.25 percent franchise fee, it only increases the bills of affected customers by 2.25 percent. Together, the Public Utility Tax and franchise fee combine to add 4.5 percent to the bills of TEP customers in the City of Tucson. All proceeds of this tax (and the fee) are forwarded to the City of Tucson.

Sales Tax

Regional Transportation Authority Tax

Demand Side Management Charge

What is the Demand Side Management (DSM) charge?

The DSM charge is a monthly, usage-based charge established by the Arizona Corporation Commission (ACC) to pay for cost-effective energy efficiency programs.

These ACC-approved programs can help residential and commercial customers use less energy and save on their monthly electric bills. Energy efficiency benefits all TEP customers by postponing or avoiding the need to build new generating resources and reducing our reliance on fossil fuels, resulting in reduced air emissions and water usage.

The energy savings achieved through these programs help TEP work toward the goals in Arizona’s Energy Efficiency Standard, which calls on utilities to achieve cumulative energy savings of 22 percent by 2020

How does this affect my bill?

Where does the DSM charge appear on my monthly bill?

Do other utilities have charges like this?

What kinds of energy efficiency programs are available?

Lost Fixed Cost Recovery (LFCR) Charge

What is the Lost Fixed Cost Recovery (LFCR) charge ?

Why does TEP need an LFCR charge?

Rooftop solar arrays, compact fluorescent light bulbs and efficient air conditioning systems have helped customers save money on their monthly electric bills. These savings limit TEP's ability to recover our service costs, including many 'fixed' costs that aren't reduced when customers use less power.

Examples of fixed costs include power line repairs, metering expenses and the cost of installing and maintaining the electric grid. Our system covers more than 1,100 square miles and includes more than 2,000 megawatts of generating resources, more than 9,000 miles of underground and overhead power lines and more than 100 substations.

The LFCR will help ensure that the success of our energy efficiency and renewable power programs does not compromise our ability to cover our fixed service costs.

Who must pay this charge?

How is the LFCR calculated?

Percent of Applicable Billing Amount

Under current rates, a residential customer with monthly usage of 800 kilowatt hours (kWh) would pay $85.24 in Delivery Service and Power Supply charges.

Estimated Percentage Adjustments	X	Applicable billing amount	=	Monthly LFCR surcharge amount
0.004149 (Energy Efficiency)	X	$85.24		$0.35
0.003126 (Renewable Energy)	X	$85.24		$0.27
*Total LFCR charge*				$0.62

With this method, a customer with average usage of 800 kilowatt hours is expected to pay 62 cents a month.
By default, customer bills will be calculated using this method.
With this method, the LFCR is listed under “Green Energy Charges” on your monthly bill and separated to show the amount recovered for energy efficiency and renewable energy requirements. Click to view sample bill.

Will the amount of my LFCR charge change?

Environmental Compliance Adjustor

What is the Environmental Compliance Adjustor (ECA)?

How will this affect my bill?

Why is the ECA necessary?

Tucson	2.6 percent
Sahuarita	2 percent
South Tucson	5.5 percent
Marana	4 percent
Oro Valley	4 percent

How to read my bill

Delivery Services

Power Supply Charges

Green Energy Charges

Taxes and Assessments

New Bill

TEAM

TCA

PPFAC

REST

DSM Surcharge

ECA

LFCR Charge

Demand Side Management Charge

Lost Fixed Cost Recovery (LFCR) Charge

Environmental Compliance Adjustor

We use cookies to optimize our website and our services.

Call us

Connect with us

Download our app