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.
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.
Below is the average annual rate increase per class from 1997 to 2017.
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. The ACC recently approved a request for higher rates and will soon consider proposed changes for customers who install new rooftop solar systems.
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.
The potential energy cost savings associated with rooftop solar arrays also depend on the continued use of electric rates and “net metering” rules that subsidize electric service for users of rooftop solar arrays. TEP is proposing changes as part of our pending request for new rates that would reduce subsidies for new users of private solar arrays.