TEP customers can expect to see average bill reductions of about $10 per month thanks to surcharge updates that will take effect June 1 - just in time for rising temperatures.
Average summer bills for residential customers in June and July will be further reduced by nearly $6 per month as a result of a temporary adjustment to the Demand Side Management (DSM) surcharge.
These net bill decreases are related to changes in three surcharges. The largest change will be a reduction to the Purchased Power and Fuel Adjustment Charge (PPFAC). The PPFAC is adjusted annually to allow recovery of changing energy costs, which are passed along without markup.
The charge was increased last year to recover higher energy costs from previous years, including some that were deferred to support customers during the coronavirus pandemic. Those costs have since been recovered, allowing the PPFAC to be reset as a credit of less than one cent per kilowatt hour (kWh) beginning next month.
The Arizona Corporation Commission (ACC) approved that change yesterday along with updates to two other energy charges. The DSM surcharge will be temporarily reduced to return unspent and uncommitted energy efficiency funds. Additionally, the Renewable Energy Standard Tariff (REST) will increase to better align surcharge collections with actual clean energy expenses. The table below summarizes the three adjustments. The bill impacts shown below are for a typical customer rounded to the nearest whole dollar amount. Actual bill impacts will vary by customer depending on their energy usage.
- PPFAC decrease: $12
- REST increase: $2
- DSM surcharge decrease June and July: $6
- Total bill decrease June and July: $16
- Total bill decrease thereafter: $10
"This is welcome news as we enter a season when hotter weather typically leads to higher bills," said Susan Gray, TEP's President and Chief Executive Officer. "We understand the importance of keeping our rates affordable, so we're pleased to pass along these savings now to help reduce that traditional summer bill impact."
TEP is continuously seeking ways to reduce the energy costs passed along to customers. Most recently:
- TEP's intervention in a major transmission provider's rate case resulted in a settlement agreement that is expected to reduce costs for our customers. The agreement is subject to the approval of the Federal Energy Regulatory Commission, which is expected to address the matter later this year.
- TEP has joined 25 other western entities in supporting the continued development of Markets+, a new energy market with an anticipated launch date in early 2027. The market is expected to make wholesale energy more affordable while supporting system reliability and increased clean energy use.
Although TEP customers will be paying lower energy costs this summer as a result of the surcharge changes, increased energy usage will still result in higher overall bills.
TEP offers many ways to help customers manage their energy expenses, including energy efficiency options and billing programs.
Consider a new pricing plan or payment program: Our Budget Billing program levels out seasonal swings in monthly bills so you can pay the same amount year-round. We'll divide your estimated annual charges into 12 equal monthly payments. Discounted rates and emergency bill payment assistance also are available to eligible limited-income customers.
You also might explore alternate pricing plans, including time-of-use rates that offer discounts for usage during off-peak hours. We also offer plans that pair reduced energy charges with a "demand" charge based on your highest on-peak energy use. These plans reward customers who can limit their concurrent use of large appliances during on-peak hours.
Customers with flexibility to adjust when and how they use energy could find opportunities to reduce their monthly energy bills. See which plan might be right for you with our Pricing Planner tool, which provides forecasts based on your past 12 months of energy usage.
Explore ways to save energy: Improving energy efficiency not only lowers your energy bills, it improves the comfort and quality of life for you and your family. Simple lifestyle modifications can make a big difference, especially if you an conserve energy during times of peak usage.
Cooling your home in the summer, for example, can be one of your largest energy expenses. The U.S. Department of Energy recommends setting your thermostat at 78 degrees in the summer and using fans to help you feel cooler. Through our Efficient Home program, we offer rebates for air conditioning tune-ups and also for replacements if you're air conditioner just won't make it through another summer.
Find out if you qualify for payment assistance: We offer monthly low-income discounts to qualifying customers. We can also help you learn how to apply for agency assistance and can assist with payment plans if you're falling behind.
