Tucson Electric Power Co. residential customers will see a reduction of more than $4 on their monthly bills starting in May, after state regulators approved a decrease in a billing surcharge that pays for fuel and purchased power.
The surcharge is reset periodically to reflect TEP’s actual costs for fuel like natural gas and wholesale power purchases.
TEP passes those costs along to customers without any markup through the surcharge, which appears on customers’ bills under “Power Supply Charges.”
The new surcharge rate, approved Tuesday by the Arizona Corporation Commission, will last at least through March 2017, subject to the next reset.
Starting May 1, the typical TEP home ratepayer using 800 kilowatt-hours of power monthly will pay $1.20 month at the new surcharge rate, $4.26 less than the prior average charge of $5.46 monthly, according to documents filed with the Corporation Commission.
Other customer classes will see commensurate reductions, though figures on those bill impacts weren’t immediately available.
The savings will likely be even greater during the summer, when customers typically use more energy, TEP said.
“This reduction will take effect just in time to help reduce the impact of home cooling expenses on our customers’ summertime bills,” TEP President and CEO David Hutchens said in a news release.
While TEP will soon see savings, the utility is moving to raise its base rates to cover increased costs.
In November, TEP filed for a 7 percent increase in revenues in a rate case that would boost the average home customer’s bill $12 a month by 2017.
The utility also is seeking a change in its so-called net metering policy that will significantly reduce credits and add charges for customers with new rooftop solar arrays.
Also on Tuesday, the Corporation Commission approved, without debate, a lower rate at which net-metered rooftop solar customers are reimbursed at the end of the billing year for excess power their systems produced.
Rooftop solar customers also are credited monthly for excess power at the full retail rate. But TEP is seeking approval to cut that credit rate to the wholesale rate TEP pays for power from utility-scale renewable energy projects.
