To recoup its billion-dollar investment over the past four years for equipment, performance and service upgrades, Tucson Electric Power (TEP) on Thursday filed a proposal seeking rate changes with the Arizona Commission Corp. (ACC).
David Hutchens, TEP's president and CEO, pointed to the need to support the utility’s outlay, stating that TEP’s proposed rates would more accurately represent its current service costs while simultaneously supporting growth and promoting renewable resources.
"We're delivering electric service to our customers that's cleaner, greener and more reliable than ever before," Hutchens said. "Updated rates will help us sustain these efforts as we evolve to address our community's changing energy needs."
Spending since the end of 2011 has included approximately $600 million in generation costs, close to $252 million in distribution enhancements, and over $100 million for sustainable energy projects. By increasing customer fees slightly, TEP says it could recover its costs while still ensuring fair prices.
TEP suggests several possibilities for customers, including a pricing plan based on time of use, a method already used successfully in other areas in the nation. By increasing consumer awareness of peak-hour use and teaching customers to consciously conserve energy consumption, service options can become more interactive. Such a plan would be optional except in the case of solar power systems, for which it would be mandatory.
The proposal is part of TEP’s larger scheme — to supply up to one-third of its power from renewable resources by 2030.
"If we want renewable energy to grow into a more meaningful part of our community's energy supply, we must redirect our resources to the most cost-effective options," Hutchens said. "The updated rates we've proposed will do just that by helping us provide more renewable energy for less money."
Estimating that the average residential customer would see a $12 per month increase, TEP requests that its proposed new rates take effect Jan. 1, 2017.