David Wichner Tucson Electric Power’s proposal for new rates that would raise home bills by an average 12% or about $14 per month has hit a wall of resistance from regulators and stakeholders as hearings opened this week.
Customers on TEP's basic residential time-of-use rate plan, which charges less for off-peak power usage, would see an average monthly bill increase of $13.48. “I can’t see anyway TEP can spin such an epic rate increase, nearly 12%, as necessary and the best way to handle the shifting energy paradigm,” Parrish said. “For families earning six figures the rate increase won’t hurt, but those could be catastrophic for struggling working families, retirees like myself, and nonprofits; and businesses will certainly pass the cost along, as well.
Recouping costsIn an opening statement, TEP attorney Michael Patten said the company needs the new revenue to cover increased costs, including $1.9 billion TEP spent in the last three years on needed system upgrades. “TEP continues to need to address the increasing challenges of the tightening Western capacity markets, as well as the increasing demand on its system,” Patten said. “Addressing these issues will require larger projects with significant capital costs.”
Return on equity became a major issue in Arizona Public Service Co.’s last rate case in 2021, when regulators cut the company’s allowed return to 8.7%, partly to penalize APS for poor customer service. APS appealed the ACC ruling and in mid-March, the Arizona Court of Appeals said that part of the profit cut was improper.
Cutting backWednesday’s proceedings kicked off several weeks of evidentiary hearings before ACC administrative law judge Belinda Martin, who will weigh TEP’s request and testimony filed by parties to the case and ultimately make a recommendation to the full Corporation Commission for a final decision this summer.
But RUCO wants to limit the increase in the residential basic service charge to 55 cents, to $13.55 per month. TEP has said it will follow the lead of other coal-plant owners in determining possible future transition funding for communities affected by coal closures but has opposed including it in the pending rate case.
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