Tucson Electric Power customers’ average electric bills declined in 2025, even as inflation continued to push household expenses higher nationwide.
Average monthly residential bills fell from about $146 in 2024 to $140 last year, a drop of about 4 percent. While customers who used more energy in 2025 might have paid higher bills, average bills fell to about the same amount our customers were paying in 2023.
Daily energy costs followed the same pattern, with the average daily cost of TEP service declining from $4.89 to $4.67.
These declines occurred against the backdrop of continued national inflation, which averaged 4.1 percent in 2023, 2.9 percent in 2024, and 2.7 percent in 2025, according to the U.S. Bureau of Labor Statistics. Even as prices for goods such as food, transportation, and household staples continued to rise, TEP’s typical residential bills moved in the opposite direction last year, offering some relief for households managing a long stretch of elevated living costs.
The averages above include all surcharges and taxes to provide a clear picture of what customers pay for service. For the past two years in a row, customers saw a reduction to the Purchased Power and Fuel Adjustment Charge. That surcharge is adjusted annually to allow recovery of changing energy costs, which are passed along without markup.
Nationally, energy prices have been volatile over the past several years, contributing to higher costs for electric utilities. But the latest Consumer Price Index data show that while inflation remained higher than the Federal Reserve’s long-term target, it moderated significantly from the peaks seen in 2021 and 2022. The U.S. CPI rose 2.7 percent over the 12 months ending December 2025.
“This information reinforces our efforts to deliver service at the lowest possible cost. Even as the cost of materials, labor, equipment and fuel continues to rise across the energy industry, TEP’s typical customer bills have remained relatively stable,” said Jay Rademacher, TEP’s Vice President of Finance and Rates.
“While we’ve been transparent about the need for future rate adjustments to recover documented past investments, our billing data shows that our customers’ recent costs have not reflected the broader inflationary pressures seen in other sectors,” Rademacher said. “TEP plans to continue sharing bill and cost information publicly to help customers understand long-term trends and to provide transparency around the factors contributing to the price of electric service.”
