FOR IMMEDIATE RELEASE: Nov 5 2015
Tucson, Ariz. — Tucson Electric Power (TEP) is seeking updated rates to support investments in a stronger, more reliable and more sustainable electric system.
The proposed rates would better reflect TEP’s current service costs while supporting economic growth and promoting cost-effective renewable energy resources. The proposal, filed today with the Arizona Corporation Commission (ACC), seeks approval of new rates for use beginning on Jan. 1, 2017.
“We’re delivering electric service to our customers that’s cleaner, greener and more reliable than ever before,” said David G. Hutchens, TEP’s President and CEO. “Updated rates will help us sustain these efforts as we evolve to address our community’s changing energy needs.”
TEP’s current rates do not reflect more than $1 billion the company has invested since the end of 2011 to upgrade electrical equipment, improve environmental performance and develop new programs to better serve customers. Those costs include about $600 million in generation-related investments, nearly $252 million in distribution upgrades and more than $100 million for new renewable energy resources.
The proposed rates would recover those costs through higher fixed charges and other changes designed to ensure that all customers pay a fair price for electric service. The proposal would increase typical residential bills by approximately $12 per month, on average, over the course of a year.
Customers would have new options under TEP’s proposed rates, including a “pay-as-you-go” plan that provides residential customers with an alternative to awaiting bills for previous usage. The plan would provide increased awareness and control of energy usage and offers a way to avoid paying deposits or fees to secure payment.
TEP also is proposing a new pricing plan that combines a basic service fee, lower usage-based rates and a charge based on customers’ highest hourly energy use. The plan more accurately reflects TEP’s service costs, which are driven by customers’ peak usage levels. While any residential customer could choose the plan, it will be mandatory for new users of solar power systems.
New solar customers also would receive fair market prices for the excess energy their systems produce. Current “net metering” rules provide rooftop solar users with energy credits valued at nearly twice the price TEP pays for energy from larger “community scale” solar arrays. TEP is proposing to provide bill credits valued at the same price it pays for power from community-scale systems.
Revising rooftop solar subsidies embedded in current rates would reduce costs for all other customers while allowing greater investments in more cost-effective renewable energy resources. The proposed rates are an important part of TEP’s plan to supply at least 30 percent of its power from renewable resources by 2030 — exceeding Arizona’s requirement of 15 percent renewables by 2025.
“If we want renewable energy to grow into a more meaningful part of our community’s energy supply, we must redirect our resources to the most cost-effective options,” Hutchens said. “The updated rates we’ve proposed will do just that by helping us provide more renewable energy for less money.”
TEP, a recognized industry leader in renewable energy development, proposed the same revisions to its net metering plan earlier this year but agreed to defer the proposal until this rate request. The company is seeking to exempt customers who installed or requested interconnection of solar power systems on or before June 1, 2015.
TEP’s proposed rates also include a new economic development rate that would provide discounts for up to five years to new or expanding large commercial or industrial businesses that create new jobs and meet other requirements.
“We want to help improve the quality of life in our community by helping to attract new employers and making it easier for existing businesses to expand their operations,” Hutchens said. “Other Arizona utilities offer similar discounts, so we’d like to do our part to help grow our local economy.”
Additional information about TEP’s rate proposal is available online at tep.com/newrates.
TEP provides safe, reliable electric service to approximately 417,000 customers in Southern Arizona. For more information, visit tep.com. TEP and its parent company, UNS Energy, are subsidiaries of Fortis Inc., a leader in the North American electric and gas utility business, with regulated utilities that serve more than 3 million customers across Canada and in the United States and the Caribbean. To learn more, visit fortisinc.com.
News Media Contact: Joseph Barrios, (520) 884-3725, jbarrios@tep.com
