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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 increased about 1 percent per year, on average, over the past 20 years.  If you adjust for inflation over that same length of time, our rates have actually fallen by about 1 percent per year.

Graph comparing inflation and rate increases form 1998-2018. Inflation rate was 2.2% and average annual rate increase was 1.3%.

 

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
1998 9.35 10.79 6.22
1999 9.26 10.70 6.15
2000 9.14 10.54 6.21
2001 9.09 10.45 6.15
2002 9.10 10.45 6.39
2003 9.11 10.43 6.42
2004 9.12 10.44 6.54
2005 9.10 10.40 6.54
2006 9.09 10.38 6.52
2007 9.06 10.37 6.53
2008 9.11 10.40 6.56
2009 9.67 11.05 6.97
2010 9.62 11.05 6.90
2011 9.87 11.34 7.12
2012 10.15 11.60 7.22
2013 9.93 11.39 7.13
2014 11.00 12.07 7.43
2015 11.51 12.62 7.96
2016 11.13 12.23 7.71
2017 12.05 12.78 7.63
2018 12.21 12.86 7.55

Below is the average annual rate increase per class from 1998 to 2018.

Residential Commercial Industrial
1.3% 0.9% 1.0%

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.