State regulators today approved a rate increase for Tucson Electric Power Co. that will boost the average residential bill by about $3 to $4 per month — while putting off some new energy-efficiency programs that have been awaiting approval for more than two years.
The Arizona Corporation Commission approved an amended version of a settlement reached among TEP, the commission staff and other parties on a 4-1 vote.
Amendments offered by commissioners Brenda Burns and Gary Pierce removed from the rate settlement TEP’s latest plan to meet a state energy-efficiency mandate — including a new mechanism to allow the utility to recover its costs for energy-conservation programs in later rates, much as it recovers power-plant costs.
Instead, the commission decided to keep only those energy-conservation programs that it has previously approved, while suspending consideration of nine new programs until new hearings on the cost-recovery issue are held.
While the original settlement would have increased rates by less than $3, that figure will rise because the commission voted to fund limited energy-efficiency programs through an increase in an existing surcharge for “demand-side management” programs, a TEP spokesman said.
An amendment offered by Pierce pegged the average residential monthly bill increase at $3.66, or 4.4 percent. TEP’s rates have been frozen since the last rate settlement in December 2008.
The lone commissioner on the all-Republican commission to vote against the rate settlement, Susan Bitter-Smith, said she supported most of the agreement.
But Bitter-Smith said she opposed any further delay in approval of TEP’s energy-efficiency plan, citing comments from many TEP customers who told the commission they were eagerly awaiting the opportunity to participate in the programs.
Under standards unanimously approved by the Corporation Commission in 2010, TEP is required to achieve cumulative energy savings of 22 percent by 2020. Arizona is one of several states to adopt such standards, as a strategy to reduce the long-term costs and environmental effects of power generation.
TEP suspended some of its energy-efficiency programs last year when the commission put off approval of the plan amid concerns over funding mechanisms.
It was not yet clear which programs would restart, though discounted, $99 home-energy audits were among the programs suspended last year.