Customers of Tucson Electric Power won’t see any rate increases until October at the soonest, as regulators wrestle with how to safely wrap up TEP’s pending rate case amid the COVID-19 pandemic.
TEP is still awaiting final action on its request for new rates that would boost revenues by $99.5 million and — partly offset by a $38.9 million reduction in charges for fuel costs — would increase the average monthly residential bill by about $7, or about 7%.
The Corporation Commission’s utilities division has recommended a smaller revenue increase that would raise the average monthly home bill less than $3, while other parties to the case contend TEP deserves even less.
TEP had filed its initial rate request in April 2019 and requested the new rates to go into effect May 1 of this year.
A Corporation Commission administrative law judge presided over 14 days of trial-like evidentiary hearings on TEP’s rate request from mid-January to mid-February.
But additional hearings were set to consider late testimony filed by the commission’s staff on a major sticking point in the case — TEP’s request to start recovering its costs for a 550-megawatt gas-fired power plant near Gila Bend it purchased last December and a 200MW bank of gas-fired internal combustion engines TEP recently installed at its H. Wilson Sundt power plant in Tucson.
The case schedule was extended 60 days, and final hearings on the staff’s latest testimony are scheduled for June 24 and 25.
With closing briefs due in early August, the administrative law judge is now expected to issue a recommended order on the TEP rate case sometime in October, Corporation Commission spokeswoman Nicole Capone said.
Then it’s up to the Corporation Commission chairman to put it on an open meeting agenda for final consideration, Capone said.
But now, the parties are trying to determine how to hold those hearings safely in the middle of the pandemic.
During a procedural telephone conference last week, TEP and other formal participants in the rate case agreed to test videoconferencing technology that could be used for the remaining hearings, which for TEP are normally held at the Corporation Commission’s office in downtown Tucson.
TEP and other parties to the rate case are scheduled to meet via teleconference Thursday, June 18, to discuss the viability of using the videoconferencing platforms that have been tested.
TEP says it needs the higher rates to recoup more than $1 billion in recent system investments, including the new gas-fired plants.
But stakeholders including the Sierra Club argue that TEP should have opted to add more solar generation with battery storage and that the commission’s staff failed to properly analyze the need for the gas plants.
