When customers make small changes, such as allowing a thermostat adjustment of a few degrees or shifting when they charge their electric vehicle, it may not seem like a big deal.

But collectively, when many customers take actions like these, they can make a major impact on the electric grid.

Together, TEP has been assembling programs that operate as a virtual power plant, allowing customers to earn rewards while jointly helping meet the community’s energy needs.

A virtual power plant is powered by customers and managed cohesively as a portfolio of resources that can reduce the need for conventional power plants. Customers participate in the programs by allowing small adjustments to devices they already own, such as thermostats, batteries and EVs. These contributions support efficient operation of our local energy grid.

TEP rewards customers who participate in these programs because they generate benefits for everyone we serve. Here’s how they help deliver capacity for the grid when it’s needed most:

Smart Rewards

What it is: The program rewards customers for helping to reduce electricity use when demand is high. Customers allow small, temporary adjustments to their smart thermostats to free up grid capacity for others.

Length of program: Started in summer 2023

Impact: In its third summer season in 2025, about 18,000 customers registered 22,000 thermostats. The program achieved a peak reduction of 38 megawatts (MW) with 21,592 devices during the first hour of an August 2025 event, reflecting a 67 percent increase from the 2024 peak of about 23 MW.

The fourth season concluded just last week and results will be available later this year. Read about the experience of one customer.

What’s new: Smart Rewards Business started in June 2026 to extend the program for eligible business customers.

Smart Charge

What it is: This program offers bill credits to participants who charge their electric vehicles at home during times when demand on the electric grid is relatively low and renewable energy is more prevalent. Customers can earn $20 for enrolling and $10 a month when they charge within automated, tailored schedules at least 85 percent of the time.

Length of program: Started in August 2026

Impact: In its first month, the program met almost half of its 500-vehicle enrollment goal. An estimated 4.8 megawatt hours of energy was shifted away from peak hours when participants altered their charging times. Enrollment is based on a first-come, first-served basis.

Learn more about enrollment.

Energy Storage Rewards

What it is: Customers with home battery systems can earn rewards for allowing TEP to use energy stored in their batteries during pre-scheduled peak times. Customers earn about $360 per season, or up to $720 per year in rewards.

Length of program: Started in summer 2025

Impact: The program last month surpassed 700 participants. While the 2026 summer season final results are pending, the program is expected to be able to deliver a sustained five MW for an hour at current enrollment levels. Read about two customers’ experiences with the Energy Storage Rewards program.

Vehicle-to-Grid Program

What it is: Electric school buses can be plugged in to feed energy to the electric grid during periods of high energy use. Flowing Wells and Tucson Unified School Districts have been using electric school buses since this summer, and their batteries have been used during eight events.

Length of program: Started July 2026

Impact: During July and August, the buses sent more than 7 megawatt hours of electricity back to the grid. That’s enough to power 285 homes for a day. Learn more about local electric school buses.

DemandFlex

What it is: Coming this fall, the DemandFlex program will reward commercial and industrial businesses when they reduce electric consumption during times of peak demand. Participants are compensated for delivered performance and receive access to real-time usage data.