August 9, 2023
In a 4-1 decision Tuesday, utility regulators at the Arizona Corporation Commission (ACC) voted to approve a significant revenue increase proposal from Tucson Electric Power, leading to an average of more than approximately $11 per month increase to residential electric bills. The decision, which failed to hold the utility accountable for investigating ways to reduce costs for serving electricity during the hottest times of the year, will likely leave many residents feeling unprotected and burdened with potential financial strain.
The Arizona Corporation Commission also rejected several proposals to protect customers from future rate hikes, including a provision to incentivize TEP to minimize its costs for purchased power and fuel, which are then passed on to customers. In addition, utility regulators dismissed recommendations from the Southwest Energy Efficiency Project and Western Resource Advocates to study and restructure its time-varying rate plans for residential and electric vehicle-owning customers. These rates ensure TEP properly incentivizes customers to reduce peak demand and overall system costs.
The decision also eliminated support for low-moderate income customers that are financially impacted by payment processing fees and for communities economically devastated by the early closure of coal-fired power plants.
“It is concerning to witness the Arizona Corporation Commission prioritizing the interests of Tucson Electric Power over the well-being of the ratepayers,” said Caryn Potter, Arizona representative for the Southwest Energy Efficiency Project. “This decision will undoubtedly lead to financial hardships across our state, making it more challenging for many families and businesses to manage their monthly bills.”
“Preparing for the future means providing options for electric vehicle owners to charge their cars when solar energy is abundant, and there is less strain on the grid,” said Alex Routhier, Ph.D., senior policy advisor for WRA. “By dismissing recommendations that TEP set EV rates at times that are easy for customers to manage, the Arizona Corporation Commission failed to adequately prepare for this future.”
The commission’s decision will take effect as early as Sept. 1.
Contact
James Quirk, 908-902-3177, james.quirk@westernresources.org
