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Purchased Power and Fuel Adjustment Charge

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

The PPFAC is a usage-based credit or charge that reflects changes in energy-related costs, including the fuel for our power plants and the price of power we purchase for customers. It includes only costs that are not already incorporated in summer or winter base power supply rates. The PPFAC is usually reset each year by the Arizona Corporation Commission (ACC) to pass along recent energy costs and charges. TEP passes these costs along without any markup and earns no profit from this charge.

What is the current PPFAC charge or credit?

Beginning June 1, 2021, the PPFAC is $0.003294 per kWh – about one-third of a cent. At that level, the charge adds $2.78 to the monthly bills of residential customers with typical usage. The monthly impact is typically higher during the summer and lower during the winter, and customers who use more energy will pay a higher PPFAC charge.

This year’s increase is mitigated by the ACC’s decision to defer some energy-related costs for recovery in 2022. That plan was recommended by the ACC staff as a way to support customers during the coronavirus pandemic.

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.

Does the PPFAC apply to all of the energy I purchase from TEP?

Shares of solar energy purchased through TEP’s GoSolar Shares program are not subject to the PPFAC. Customers enrolled in TEP’s GoSolar Home program are exempt from the PPFAC as well. For more details about GoSolar Shares, click here and for more details about GoSolar Home, click here.