For Star subscribers: Tucson Electric Power home customers will see higher bills over the next 18 months to cover an increase in power-supply costs.
David Wichner Tucson Electric Power home customers will see their monthly bills rise an average of about $4 a month for at least the next 18 months to reimburse the utility for higher wholesale power and fuel costs since 2020.
People are also reading… The surcharge, known as the “purchased power and fuel adjustment clause,” or PPFAC, is adjusted up or down annually, sometimes resulting in a credit. The charge consists of two rate components: a “true-up” rate to reflect actual costs TEP has paid and a forward component based on forecast future costs.
But TEP also offered regulators the options of collecting the costs through PPFAC increases over 18 or 24 months, which would have increased bills by $9.27 or $7.56 per month, respectively. But the commission also voted to drop the forward-looking rate component to zero, under an amendment offered by Commissioner Jim O’Connor, cutting the monthly home bill impact to under $4.
“They send a price signal to the customer, and what’s the customer supposed to do, turn out the lights if they don’t like it?” the retired Scottsdale businessman said. Commissioner Justin Olson supported TEP’s surcharge increase but said in the future, the commission should consider cutting a utility’s allowed return on equity — a key measure of corporate profitability — to reflect the cost risk that is shifted from the company to ratepayers through such surcharges.
“It’s a cost of doing business, and the company can make bad decisions and still pass those costs on to the ratepayers, so there’s no protection for ratepayers,” Kennedy said.
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