蜜柚直播

The 蜜柚直播 Corporation Commission鈥檚 3-2 decision on Thursday came despite pleas by consumer advocates to stretch out TEP鈥檚 cost recovery to impose less of a burden on ratepayers already struggling with inflation.

The increase to the so-called , a pass-through billing surcharge that repays TEP for excess fuel and wholesale power costs not included in base rates, will increase the average TEP residential bill by $9.87 per month over the 12-month period.

That鈥檚 about 2 cents per kilowatt-hour and an increase of 8.3% 鈥� on top of the average $6.36 customers currently pay for the usage-based surcharge.

TEP鈥檚 business-class customers will see commensurate based on their usage.

But under a plan advanced by the ACC鈥檚 utilities division staff to ease the burden on customers, the surcharge rate will be higher in the winter months and lower in the summer when bills are typically surge.

That will result in an average home bill increase of $7.47 from May through September and an average $11.57 increase from October through April.

Alternatives rejected

Commissioner Lea M谩rquez Peterson 鈥� a Republican and the only commission member from 蜜柚直播 鈥� offered an amendment to spread the increase in the fuel surcharge out over 18 months for an average monthly bill impact of $6.33.

But the commission鈥檚 other three Republican members rejected that amendment, arguing the growing undercollected deficit and interest over the extended time would only cost ratepayers more in the long run.

The panel also rejected an amendment offered by Democrat Commissioner Anna Tovar to spread the payout period over 24 months to soften the 鈥渞ate shock鈥� on ratepayers.

Commission Chairman Jim O鈥機onnor and members Nick Myers and Kevin Thompson voted in favor of TEP鈥檚 request, as modified by the staff proposal, to allow the company to recover its undercollected fuel balance over 12 months.

鈥淭he longer we stretch this out, the more money we are taking out of the ratepayers鈥� pockets,鈥� Myers said, noting the proposed increase was not out of line with recent increases approved by the commission.

Consumer advocates, including the state Residential Utility Consumer Office, the 蜜柚直播 Public Interest Research Group Education Fund and the statewide anti-poverty group Wildfire asked the commission to stretch out the surcharge increase to lessen the bill impacts for consumers already coping with higher costs.

They noted the ACC voted to increase TEP鈥檚 fuel surcharge by $4 in April 2022, and customers are now facing TEP鈥檚 pending request for a 12% general rate increase after a 9.7% increase in 2021.

鈥淗aving 24 months to balance out the undercollection allows a greater opportunity for ratepayers to pay their bills directly and enables eligible ratepayers time to seek and receive financial assistance to pay their bills while still allowing the company to receive what it is owed,鈥� Diane Brown, executive director of AZPIRG, told the commission at a meeting continued from last week.

Struggling families

Claire Michael, climate equity director at , also backed spreading the surcharge increase out over 24 months, citing recent federal data showing that 19% of 蜜柚直播 residents live in poverty, including one in four children.

鈥淭his poverty estimate does not include everyone struggling,鈥� Michael said. 鈥淪o, when considering how rate shock will affect various customers, while almost one in five people in poverty in 蜜柚直播 will be disproportionately negatively impacted, many more families will also experience negative impacts.鈥�

Responding to remarks by Commissioner Myers last week that a $17 monthly surcharge 鈥渋s working one hour extra at In-N-Out,鈥� Michael said many working-class people do not have the option of controlling their hours, and many people are seniors or disabled on fixed incomes.

鈥淧overty is a multifaceted issue that is influenced by a wide range of factors, making it a complex problem that cannot be solved simply by working more hours, especially considering the never ending increases in the cost of living, including energy rates and stagnant wages,鈥� she said.

M谩rquez Peterson said she was in favor of extending the recovery period to 18 months to help struggling consumers, citing TEP鈥檚 pending request for a general rate increase and noting that 蜜柚直播 voters next week will vote on a new city franchise agreement with TEP that would increase their bills.

That 25-year franchise agreement will raise bills for TEP customers in city limits by about $1 a month to fund underground installation of transmission lines through the midtown area and future city climate initiatives.

Cost grows with delay

During Thursday鈥檚 open meeting and discussion at an open meeting last week, O鈥機onnor, Myers and Thompson said extending TEP鈥檚 cost-recovery period would only add to the burden on ratepayers, noting that TEP is entitled to interest on the undercollected surcharge funds.

The commission staff estimated that, depending upon how fast TEP is allowed to collect the unrecovered costs, interest costs of more than $4.5 million could accrue.

鈥淚f we don鈥檛 solve the problem sooner rather than later it鈥檚 ratepayers, with TEP as the intermediary, funding it at the cost of money which grows greater every day on a larger (uncollected) balance,鈥� O鈥機onnor said.

RUCO and Wildfire, together with the Southwest Energy Efficiency Project, Freeport-McMoRan Inc., the 蜜柚直播 Solar Energy Industries Association and Vote Solar, backed a proposal to shift a decision on a forward-looking component of the surcharge to a second phase of TEP鈥檚 pending rate case.

But the commission rejected that after hearing from staff that the surcharge already has been the subject of testimony in the rate case, which is expected to be decided by late summer.

Thompson said he didn鈥檛 want a growing undercollected balance in the fuel surcharge account to be shifted into base rates, where TEP could potentially earn a return on their costs.

He cited TEP estimates that extending the recovery period over 18 months would shift $25 million in undercollected balance to 2024, or under a 24-month period would shift $63 million.

鈥淢y concern is only if we push it out more than 12 months the balance shift just continues to increase until everything gets paid off in full,鈥� Thompson said.

The commission rejected the idea of putting off part of the surcharge to the rate case, but M谩rquez Peterson, Myers and the other commissioners said they would favor an in-depth review of the Purchased Power and Fuel Adjustor Clause funding mechanism to avoid future, sudden impacts on ratepayers.

鈥淏ut I think we could have handled this differently, whether as Mr. Myers mentioned, we dive in and look at perhaps reconstruction of this in the future, which I would be supportive of. I just think this is quite a burden, and we could have handled this as a one-off case,鈥� M谩rquez Peterson said.

TEP鈥檚 initial surcharge request would have boosted the average monthly home bill by $13 for a year to allow the utility to recover $148 million in costs for wholesale power and natural gas the company says have jumped about 300% since 2019.

But since the company鈥檚 initial filing in January, projected excess fuel and power costs through March were updated with actual spending figures, cutting the undercollected balance by $22 million to about $126 million.