TEP Proposes New, Expanded Solar Energy Options for Customers in 2016

After budgeting $10 million for the program this year, TEP plans to invest another $15 million in the program in 2016.

TUCSON, Ariz.--Tucson Electric Power (TEP) is seeking to expand a popular new solar power program while providing another innovative solar choice for customers in 2016 as part of its plan to exceed Arizona's renewable energy goals.

The renewable energy plan TEP filed last week with the Arizona Corporation Commission (ACC) includes a proposal to add up to 1000 new participants in the TEP Residential Solar Program. The program, made available this year to approximately 500 homeowners, provides fixed-price electric service using solar arrays installed on customers' homes.

The program's popularity was evident last week when the first 200 available reservations were booked less than half an hour after the online form was made available at noon on July 1. Additional applications will be accepted in August and September from customers who have registered their interest in the program at tep.com.

"Our customers are clearly enthusiastic about this new affordable solar energy option," said David Hutchens, TEP's President and Chief Executive Officer. "The TEP Residential Solar Program offers homeowners a personal stake in our plan to expand our community's renewable energy resources."

After budgeting $10 million for the program this year, TEP plans to invest another $15 million in the program in 2016. The program allows customers to go solar with no upfront installation or maintenance costs while receiving electric service at a flat monthly rate that remains fixed for up to 25 years. Additional details are available at tep.com.

TEP also is proposing a new Residential Community Solar Program that, if approved by the ACC, would provide similar fixed-rate benefits for 10 years to customers who agree to purchase the output of local, community-scale solar arrays. TEP has proposed launching the program in 2016 by spending up to $10 million to develop a 5-megawatt (MW) system to serve participating customers.

"Serving our customers from cost-effective community scale solar power systems helps us achieve our goal of getting more solar energy for less money," Hutchens said. "The TEP Residential Community Solar Program will significantly expand the choices available to customers who want an easy, affordable way to go solar."

The new program would complement TEP's existing Bright Tucson Community Solar Program, which allows customers to purchase some or all of their power from local solar arrays. Additional details about that program are available online at tep.com.

The cost of solar resources built for the TEP Residential Solar Program and the TEP Residential Community Solar Program would be recovered through participants' fees and future rates rather than the Renewable Energy Standard Tariff (REST) surcharge, which funds other renewable energy efforts.

TEP's proposed $57 million REST budget for 2016 would help cover the cost of the company's growing renewable power portfolio, which has expanded to 330 MW and produces enough power to serve nearly 70,000 homes. TEP ranks among the nation's top 10 utilities in expanding its solar energy portfolio, according to a report released this year by the Solar Electric Power Association.

Under TEP's proposal, the REST surcharge would increase to 1.3 cents per kilowatt hour (kWh) from 0.8 cents per kWh in 2015. For residential customers, the surcharge could not exceed $4.56 per month - an increase from this year's $3.76 monthly cap. A residential customer with typical usage would be expected to pay the capped maximum amount each month.

Resources purchased with proceeds of the REST surcharge help TEP satisfy the requirements of Arizona's Renewable Energy Standard, which calls on utilities to increase their use of renewable power each year until it accounts for 15 percent of their energy in 2025.

TEP's plan, programs and proposed surcharges must be approved by the ACC, which is expected to review the company's request later this year.

TEP provides safe, reliable electric service to more than 414,000 customers in southern Arizona. For more information, visit tep.com. TEP and its parent company UNS Energy are subsidiaries of Fortis, which owns utilities that serve more than 3 million customers across Canada and in the United States and the Caribbean. To learn more, visit fortisinc.com.

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