REST Surcharge
What is the current REST charge?
In May 2024, the Arizona Corporation Commission approved a REST surcharge of $0.0189 per kilowatt-hour (kWh) beginning June 1, 2024. The commission also approved caps that limit the amount customers pay each month for this usage-based fee.
For residential customers, the monthly cap is $10.37. For Small and Medium General Service commercial customers, the monthly cap is $426. For Large General Service customers, the monthly cap is $1,895. For Large Power Service customers, the monthly cap is $32,000.
How is the REST calculated for customers with renewable power systems?
REST surcharges are based on billed electric usage for all customers who installed renewable power systems before 2012.
Customers who received incentives and installed renewable power systems in 2012 and thereafter pay a REST surcharge equal to the average paid by members of their customer class. Customers who received no incentives and installed renewable power systems interconnected to TEP’s electric system in February 2013 and thereafter also pay REST surcharges equal to the customer class average as listed here.
| Customer Group | Average Monthly Rate |
| Residential | $8.44 |
| Small and Medium General Service | $48.12 |
| Large General Service | $1,632.25 |
| Large Power Service | $32,000 |
| Lighting | $6.41 |
The Repeal of the REST Rules
In 2006, the Arizona Corporation Commission (ACC) approved the Renewable Energy Standard and Tariff (REST) rules, which required electric utilities to obtain 15 percent of retail electric sales from renewable energy resources by 2024, with nearly a third of that coming from distributed renewable energy resources, such as private rooftop solar. The REST rules also established the REST surcharge enabling the utility to recover the costs of this requirement.
Did TEP achieve the requirement?
Yes. TEP’s renewable energy output was equivalent to 26 percent of its retail sales in 2025. This measurement includes the output of both utility and distributed energy systems, as this was the basis we were directed to use for REST compliance.
Will TEP continue to invest in renewable energy?
Yes. The repeal of the REST rules does not require that we halt investment in renewable energy. TEP develops new resources through all-source requests for proposals that allow us to evaluate which technologies will best serve our energy needs. Renewable energy remains a valuable, cost-effective part of a diverse energy portfolio, so we expect it will remain an important part of our future resource plans. TEP will file a new Integrated Resource Plan later this year, providing our updated energy goals.
Will the REST surcharge remain on customers’ bills?
Yes, at least for now. TEP continues to incur costs related to its previous compliance with the REST. These costs include payments to developers of renewable energy systems under contracts with terms as long as 30 years. The energy from these projects has been and will continue to be delivered to serve a portion of our customers’ electricity needs.
These costs will still be recovered through the REST surcharge until the ACC chooses an alternate method to recover these costs.