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Purchased Power and Fuel Adjustment Charge

What is the Purchased Power and Fuel Adjustment Charge (PPFAC)?

The PPFAC is a monthly, usage-based charge that reflects changes in the costs TEP incurs to fuel its power plants and purchase energy for customers. The charge includes only costs that are not already incorporated in summer or winter base power supply rates. TEP earns no profit from this charge.

How will this affect my bill?

Typically, the Arizona Corporation Commission (ACC) conducts an annual review of the PPFAC, approving a rate adjustment that takes effect in May and is used to calculate customer bills for 12 months. However, to reduce the bill impact on customers this summer, the ACC has approved two seasonal rates.

During the summer season, from May 1, 2014 through September 30, 2014, the PPFAC rate is set at $0.001 per kilowatt-hour (kWh). For a residential customer with average seasonal usage of 933 kWh, this will result in a monthly charge of $0.93.

During the winter season, from October 1, 2014 through March 31, 2015, the rate is set at $0.005 per kWh. For a residential customer with average seasonal usage of 640 kWh, this will result in a monthly charge of $3.20.

How does the PPFAC appear on my monthly bill?

The PPFAC appears on your bill under the heading “Power Supply Charges” along with your summer or winter base power supply rate.

Do other utilities have charges like this?

Yes. Similar components are included in the electric rates of TEP’s sister company, UniSource Energy Services, as well as in those charged by Arizona Public Service and many other electric utilities.

Do all customers have to pay this charge?

Customers of TEP’s Bright Tucson Community Solar program are not required to pay the PPFAC for solar power purchased through the program.

Will my bill be lower if I purchase solar power through the Bright Tucson Community Solar program?

Bright Tucson Community Solar is not designed to reduce customers' electric bills. Rather, it offers an easy, affordable way to meet your electric needs with clean, renewable energy. Participants in the Bright Tucson Community Solar program can purchase 150 kWh "blocks" of solar energy produced by local photovoltaic arrays. Each block will replace the charges for an equivalent amount of traditional power at a cost that adds $3 apiece to participants' monthly bills. Because solar power currently costs more than traditional energy resources, the energy blocks available from the Bright Tucson Community Solar Program will add to your monthly electric bill. But the price you'll pay for each block will remain fixed for 20 years under ACC-approved program rules, so you may realize future savings if the cost of traditional energy resources increases. See the Bright Tucson Community Solar page for more information.