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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?

For now, the PPFAC is 0.15 cents per kilowatt-hour (kWh). At that level, it adds approximately $1.21 to the average monthly bills of residential customers with typical usage. The monthly impact is higher during the summer and lower during the winter, and customers who use more energy will pay a higher PPFAC charge.

On June 1, 2021, the PPFAC will increase to 0.33 cents per kWh. At that level, the charge will add $2.69 to the average monthly bills of residential customers with typical usage – an increase of $1.48 over the current level. The monthly impact will be 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 will be 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. For more details about that program, click here.