Tucson Electric Power (TEP) is seeking new, higher rates no later than August 2013 to cover rising service costs, including more than $1 billion the company invested over the past five years to continue providing safe, reliable service.
The rates TEP proposed today in a filing with the Arizona Corporation Commission (ACC) would increase typical residential customers’ average monthly bills by about $13, or less than 16 percent. The average residential monthly bill would remain under $100.
“Our current rates don’t reflect the significant investments and expenses we’ve incurred over the last five years to improve upon the high level of service our customers have come to expect from TEP,” said Paul Bonavia, Chairman and CEO of TEP and its parent company, UNS Energy Corp. (NYSE: UNS). “Our proposed rates will cover those costs while supporting our continued investments in renewable energy and energy efficiency.”
“We’ve reinforced and expanded our system infrastructure, upgraded our energy resources and invested in the ongoing efficiency of our operations,” Bonavia said. “Those investments have resulted in safer, cleaner and more reliable service for our customers. That added value is reflected in our proposed rates.”These new rates would represent TEP’s first base-rate increase since 2008 and only the third such increase in the last 20 years. TEP’s base rates have risen just 8 percent since 1992 while the Consumer Price Index has increased nearly 60 percent over that time. Other rate components such as renewable energy and energy efficiency surcharges required to satisfy state-mandated programs, and a fuel surcharge, have contributed to bill increases during that period. TEP’s total rates lag significantly behind its service costs. TEP’s current rate structure is based on costs incurred by the company in 2006. Since then, the company has invested more than $1 billion to strengthen its distribution system, upgrade its power plants and make other improvements to serve customers’ needs. Operating costs also have increased over the last five years due to such things as rising materials costs, cybersecurity enhancements and expanding environmental regulatory requirements. During this period, sales have remained essentially flat due in part to a weak economy and government mandates.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV