Tucson Electric Power’s New Rates for 2021 Support Cleaner Energy Investment

New Tucson Electric Power rates that take effect next year will expand bill-payment assistance for low-income customers while supporting the company’s investments in efficient new energy resources that help the community transition to a cleaner, greener energy grid.

The new rates, approved by the Arizona Corporation Commission, will take effect on Jan. 1, 2021. The changes are expected to increase the average monthly bill of a typical residential customer using TEP’s Basic pricing plan by approximately $5.20 compared to current bills. The actual impact will vary monthly with usage, and customers who use more energy will experience a larger increase.

The increase will help cover the cost of flexible new generating resources, more resilient energy systems and other upgrades that are already serving customers. TEP’s current rates do not reflect costs related to approximately $1.2 billion in investments made since June 2015 to update its generating portfolio and maintain reliable service for customers.

“TEP is on track to provide 30 percent of our power from renewable resources next year with rates that reflect our commitment to safe, efficient operations,” said CEO David G. Hutchens. “We’re now well-positioned to provide affordable, reliable and sustainable service for years to come.”

The new rates, originally requested more than 20 months ago, are projected to produce a revenue increase that amounts to less than 1 percent per year since TEP’s last base rate increase in February 2017.

“We’re doing everything possible to keep our service affordable as we build a smarter, stronger grid with lower emissions and more wind and solar resources,” said president and COO Susan M. Gray, who will succeed Hutchens as TEP’s CEO on Jan. 1, 2021.

The new rates provide more assistance to low-income customers through TEP’s Lifeline program. Monthly discounts will increase from $15 to $18 and will be available to families with household income up to 200 percent of the federal poverty level – an increase from the previous 150-percent cap that was approved by the ACC earlier in December.

The expanded assistance program could provide supplemental support for customers whose income has been affected by the coronavirus pandemic. TEP and sister company UniSource Energy Services have donated $1M this year for local COVID-19 relief efforts and bill payment assistance. TEP also suspended service disconnections and late fees through Dec. 31, created extended payment plans for overdue balances and delayed implementation of an energy cost increase. More information about TEP’s customer assistance during the pandemic is available at tep.com/covid-19.

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