“While we have focused great effort on tightly managing our expenses, some increases are simply unavoidable,” Bonavia said. “We also have made several investments that will improve our ability to serve customers efficiently and effectively for many years to come.”Those investments include adding new solar generating facilities in the Tucson area, enhanced power generation environmental controls, a new downtown headquarters building, improved information technology systems that support automating distribution functions, and online customer service options. TEP also retired a lease and took full ownership of its largest local power plant, generating long-term savings and supporting plans to develop a solar thermal system on the site. TEP’s proposal includes a new funding plan for energy efficiency programs that reflects the company’s focus on energy efficiency as a low-cost resource. Customers could partially offset monthly bill increases associated with higher base rates by participating in one or more of the company’s energy efficiency programs. TEP’s proposed rates include a mechanism to help ensure the recovery of its system costs. A portion of these costs is recovered through rates that generate revenue based on consumption levels, which are reduced by state-mandated energy efficiency and renewable power programs. The mechanism would be adjusted annually to account for the reduced energy sales that result from these programs. A similar fee has been authorized for other Arizona utilities, including Phoenix-based Arizona Public Service and TEP’s sister company, UNS Gas. The proposed rates also would adjust annually to reflect required environmental upgrades at TEP’s generating plants, where compliance with new regulatory mandates is expected to increase costs significantly in the near future. Promptly passing along these costs to customers will reduce future rate increase requests while potentially reducing the company’s financing costs, a benefit which would be passed on to customers. TEP’s rate-increase request will be reviewed by the ACC, a five-member panel of elected officials that sets utility rates and oversees other aspects of the company’s operations. That review typically includes public hearings before an administrative law judge who recommends a proposed order for the ACC. The review process typically takes about a year.
Additional details about TEP’s rate proposal are available at tep.com, including frequently asked questions, a virtual tour of recent system improvements and a copy of the application.Tucson Electric Power provides safe, reliable service to 404,000 customers in southern Arizona. To learn more, visit tep.com. For more information about TEP’s parent company, UNS Energy, visit uns.com.