Arizona regulators approve new rates, solar fees for Tucson Electric Power

Dive Brief:

  • Arizona regulators have approved new rates for Tucson Electric Power, adding several new rate plans, new solar fees and tacking on about $8.50 to an average customer's monthly bill.
  • The new rates include solar fees, amounting to $2.05/month on residential and $0.35/month for small commercial customers.
  • Arizona regulators voted last year to eliminate retail rate net metering and replace it with a lower amount, but that value has yet to be finalized and was not included in TEP's new rates. PV Magazine reports the new rate will be finalized this year.

Dive Insight:

TEP's new rates aim to give customers more flexibility and control over their bills, but the big exception there is solar customers. Tucson Electric is the first Arizona utility to complete a rate filing since the state decided to eliminate retail net metering, and though the volumetric rates have yet to be set the new monthly fees to cover the cost of a second meter, are likely to make rooftop solar less attractive.

But the utility is offering new rate plans for residential and small commercial customers that include time-of-use (TOU), peak demand and demand TOU alternatives. The utility said its new plans will feature a reduced basic service charge of $10, compared to $13 for the basic plan, and allows customers to reduce bills by shifting electricity use to hours when there is less demand.

TEP President and CEO David Hutchens said in a statement that the new rates "also support our ongoing investments in cost-effective energy resources that help us provide safe, reliable service.” Higher rates aim to cover the cost of new energy resources, upgraded distribution networks and other modernization projects.

The Arizona Corporation Commission's approval also includes an economic development incentive that TEP says is designed to attract new business and encourage job creation.

And the new rates include expanded discounts for limited-income customers. Instead of requiring the use of a dedicated pricing plan for some plans, TEP will provide low-income participants with a fixed monthly discount of at least $15. The utility said the change more than doubles the resources directed to limited-income discounts.

Two other Arizona utilities have upcoming rate cases, which include mandatory residential demand charges for all or part of their respective service territories. Regulators are set to decide those cases later in the year.

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Filed Under: Solar & Renewables
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