This fixed monthly fee helps cover the cost of maintaining electric service to your address. This fee does not vary with usage. The charge covers only a small fraction of the costs TEP incurs to serve every customer, regardless of how much energy they use.

From October 2018 through March 2019, customers will receive a $1.07 credit toward the monthly Basic Service Charge. This will be the last in a series of periodic bill credits approved by the Arizona Corporation Commission in association with the 2014 acquisition of TEP and its parent company, UNS Energy, by Fortis, Inc.

TEP customers will receive bill credits and other benefits through 2020 as a result of changes in federal corporate income tax rates. TEP customers will receive bill credits totaling over $82 million over three years under a plan approved in April 2018 by the Arizona Corporation Commission.

Electric usage is measured in kilowatt-hours (kWh) — the use of one kilowatt of electric power for one hour. TEP's rates include separate kWh charges for energy delivery and power supply costs.

The kWh charges for delivery services vary based on several factors.

The rate is higher in the "summer" — defined as May through September — than during the rest of the year — which, for simplicity's sake, is called "winter." The difference is due to the higher cost of serving customers during peak usage periods. Because your bill reflects usage from periods that often include parts of two months, some bills include kWh charges calculated at both summer and winter rates.

Also, on the Time-of-Use and Basic pricing plans, this kWh rate increases as energy use rises. These plans include three tiers: 0-500 kWh, 501-1000 kWh and 1,001 kWh and above. The kWh charge is lowest for usage in the first tier and increases with each successive tier.

Finally, customers on the Time-of-Use and Demand Time-of-Use pricing plans pay different kWh charges at different times of the day. Charges are higher "on-peak" — during periods of high electric usage — and lower "off-peak."

This unit — equivalent to a kilowatt-hour (kWh) — is used to measure the amount of excess energy generated by a customer's solar array or other distributed generation system. The unused output from such systems flows into TEP's local system through a net meter, generating KBH credits that offset equivalent kWh charges for the energy TEP provides.

A charge based on a customer's peak energy use during the current billing period, as measured in kilowatts (kW). Demand charges reflect the costs of generation, transmission and distribution. For residential customers, demand charges are based on the highest hourly energy use during on-peak periods.