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Stable, Affordable Rates

Tucson Electric Power’s rates have been remarkably stable, rising at less than the rate of inflation over the last two decades.

TEP’s residential electric rates have decreased about 1 percent per year, on average, over the past 20 years when adjusted for inflation.

The following table shows TEP’s historic rates for residential and business customers. The figures reflect the average number of cents per kilowatt-hour (kWh) that different types of customers paid each year.

Residential Commercial Industrial Total
1994 9.28 10.73 6.44 8.23
1995 9.36 10.80 6.44 8.25
1996 9.44 10.99 6.50 8.33
1997 9.44 11.12 6.39 8.32
1998 9.35 10.79 6.22 8.16
1999 9.26 10.70 6.15 8.08
2000 9.14 10.54 6.21 8.11
2001 9.09 10.45 6.15 8.11
2002 9.10 10.45 6.39 8.31
2003 9.11 10.43 6.42 8.37
2004 9.12 10.44 6.54 8.42
2005 9.10 10.40 6.54 8.42
2006 9.09 10.38 6.52 8.42
2007 9.06 10.37 6.53 8.42
2008 9.11 10.40 6.56 8.44
2009 9.67 11.05 6.97 8.99
2010 9.62 11.05 6.90 8.94
2011 9.87 11.34 7.12 9.19
2012 10.15 11.60 7.22 9.40
2013 9.93 11.39 7.13 9.55
2014 11.00 12.07 7.43 9.99
2015 11.51 12.62 7.96 10.52
2016 11.13 12.23 7.71 10.24
2017 12.05 12.78 7.63 10.78
2018 12.21 12.86 7.55 10.80
2019 11.81 12.39 7.17 10.38

 

Below is the average annual rate increases per class at intervals ranging from 10 years to 25 years, from 1994 to 2019.

Annual Average Percent Change
Years Residential Commercial Industrial Total
10 2.0% 1.2% 0.3% 1.4%
12 2.2% 1.5% 0.8% 1.8%
15 1.7% 1.1% 0.6% 1.4%
20 1.2% 0.7% 0.8% 1.3%
25 1.0% 0.6% 0.4% 0.9%
Annual Average Percent Change-Adjusted for Inflation
Years Residential Commercial Industrial Total
10 0.2% -0.6% -1.5% -0.3%
12 0.5% -0.3% -1.0% 0.0%
15 -0.3% -0.9% -1.4% -0.6%
20 -0.9% -1.4% -1.4% -0.9%
25 -1.2% -1.6% -1.7% -1.2%

Our rates are updated periodically to reflect changing energy prices and other factors reflected in surcharges approved by the Arizona Corporation Commission (ACC).  In some years, the ACC also approves rate increases that allow TEP to recover the cost of system upgrades and other investments that support safe, reliable service.

Thinking About Solar?

TEP’s historic rate stability should be an important consideration for customers who are thinking about buying or leasing a solar power system to their home or business.

To calculate potential energy cost savings from a new photovoltaic (PV) array, sales representatives from solar energy providers usually assume that TEP’s rates will increase a certain amount each year. If these assumptions are wrong, the estimated savings will not materialize.

Nobody knows for sure what electric service will cost in the future.  But anyone considering a long-term investment in a solar power system should closely examine any assumptions about future increases against TEP’s long history of stable electric rates.

If you need to review the benefits and approximate costs of a private solar system compared to benefits and costs of participating in TEP’s community-solar programs, take a look at our Solar Analysis tool.