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TEP Purchased Power Costs to Decrease in May

April 14, 2016 By Cheryl Kaften

Tucson Electric Power (TEP) customers will pay lower energy costs starting next month, thanks to reduced fuel and purchased power prices.

The Arizona Corporation Commission has approved (Docket No. E-01933A-15-0239) TEP’s request to decrease the Purchased Power and Fuel Adjustment Charge (PPFAC) levied on its 417,000 electric customers in Southern Arizona.

The charge, currently about 0.7 cents per kilowatt-hour (kWh), will be reduced to less than 0.2 cents/kWh from May 1 through March 31, 2017. The lower rate passes along savings realized through recent reductions in natural gas and purchased power expenses. Residential customers will see an average savings of $4.26 on their monthly charges.

“This reduction will take effect just in time to help reduce the impact of home cooling expenses on our customers’ summertime bills,” said TEP CEO David G. Hutchens.

The PPFAC is a usage-based charge that reflects changes in the costs TEP incurs to fuel its power plants and purchase energy for customers. TEP passes these costs along to customers without any markup through the PPFAC, which appears on customers’ bills under “Power Supply Charges.”

While TEP customers will be paying lower energy costs this summer, increased usage still will result in higher overall bills. TEP offers many ways to help customers manage their energy expenses, including energy efficiency options and billing programs. For example, TEP’s Budget Billing program levels out seasonal swings in monthly bills by dividing customers’ estimated annual charges into 12 equal monthly payments.

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