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Energy bills can be complicated and mysterious. While the cost of apples (for example) is the number of apples times the price per apple, utilities slice and dice their energy "apples" (or units) in a variety of ways. And many utilities don't make it clear how much their whole apples cost you (they instead tell you the price for every little slice).

The purpose of this article is to help you understand your Tucson Electric Power (TEP) energy bill. So you can take control and cut it. The next article in the series will show you quick and easy ways to cut it.

To see your current energy rates, click here to scroll down.

Quick note
This article is focused on your electric bill. When we say energy, we mean electricity. The article doesn't consider natural-gas heating.

A "Tiered rate plan" is a rate plan where the amount you pay per kWh for electricity increases as the quantity of electricity consumed increases. Generally there is a baseline allowance of a certain number of kWhs (kilowatt hours) per month that are charged at a cheaper rate, and then usage above this allowance is charged at a higher rate.

A "Time-of-Use" rate plan is an electricity plan where the amount charged per kilowatt hour (kWh) is determined by the time of the day and the season of the year in which it is used.

Time-of-Use plans will typically have "peak" periods with higher rates and "off peak" with lower rates.

The idea behind time of use billing is to get customers to use less power at peak periods (when most people use a lot of power). Peak periods put a lot of strain on the grid. This is why time of use billing is being implemented by all major utilities. It is an attempt to encourage consumers to help spread out the load, and thus reduce investment needed to support brief periods of extremely high usage.

If customers can adjust their habits to use appliances at non-peak times they have to potential to significantly lower their electricity bills. Although, as power at peak times is much more expensive, if you continue to use lots of power at peak times your bill could be higher.

How does our rate plan work?

Your energy bill has two parts:

  1. A service charge
  2. An energy charge

The service charge

The service charge is the same for all households — whether they run a single desk fan or a hundred air conditioners. It covers TEP expenses that aren't directly related to your energy usage. Examples are TEP's phone-support staff, and the hold music you hear while waiting for phone support. The service charge doesn't change month by month. It's only about 11% of a typical family's total monthly energy bill ($13 out of $114/mo).

The energy charge

Unlike the service charge, the energy charge is based on actual usage. What's the energy unit that TEP uses? Like other U.S. utilities, they charge per kilowatt-hour, abbreviated as kWh.

 

Let's use the classic light bulb example to understand kilowatt-hours:

100 light bulbs x 10 watts per light bulb = 1,000 watts. A "kilo" is a thousand, so 1,000 watts = 1 kilowatt.

…If the light bulbs are left on for 1 hour, that's 1 kilowatt x 1 hour = 1 kilowatt-hour (when in doubt, just squish words together).

1 kilowatt x 1 hour = 1 kilowatt-hour (kWh)

Let's make sure you got that.

 

How many kilowatt-hours are used if you leave one hundred 10-watt light bulbs on for an hour?…1 kilowatt-hour.

Here are the steps:
100 light bulbs x 10 watts each = 1,000 watts.
Divided by 1,000 = 1 kilowatt (there are 1,000 watts in a kilowatt).
Left on for 1 hour = 1 kilowatt-hour.

Standard energy unit
Unit name: kilowatt-hour
Abbreviated as: kWh

Now let's talk money. How much does TEP charge to keep this single kilowatt-hour (kWh) of light bulbs on for an hour? Under the standard rate plan (code name: TRRES), they charge 13¢ per kWh on average (for a home with typical usage). One kWh multiplied by 13¢ per kWh equals…13¢. If the 100 light bulbs were kept on 24x7 for a month (based on 30 days = 720 hours straight), TEP would charge $93.60.

100 lightbulbs x 24/7 x 13 cents = $93.60

TEP customer's energy bill?

A typical family in TEP territory uses 874 per month on average (for perspective, they'd get to the same total by keeping 20 typical laptops on 24x7). They pay $114 per month for those 874 kilowatt-hours. How does your home compare?

How do TEP rates compare to the national average?

TEP rates are about the same as the national average — both the average TEP rate for a family with typical energy usage and the average national residential rate is 13¢ (rounded).

What are rate tiers?

To complicate things (we're talking about energy bills after all), TEP doesn't just charge the same flat rate for every kWh of energy. They increase the rate when energy thresholds are reached across the month. In other words, the default rate plan (code name: TRRES) is tiered. Energy in the top tier (tier 3) is 11% more expensive than energy in the first tier.

Let's connect this to life with a 1 kW espresso machine (which draws 1 kW of power at any given moment). Let's say the machine is on for an hour every morning. That's 1 kW times 7 hours per week, which equals 7 kilowatt-hours (we'll pretend it's on non stop). With summer-season rates, the total cost to run it in the first week—at the cheapest tier-1 rate—is: 80¢. The cost to run it in the last week—at the most expensive tier-3 rate—is: 89¢. So TEP is charging an extra 9¢ for the same amount of energy.

Is it worth foregoing espresso in the last week to save 9¢? Never.

Does TEP charge a premium in the summer?

Yup, summer rates are 4.1% higher than winter rates for a typical family. Between this and higher summer usage, the average summer bill is 30% higher than the average winter bill ($132 vs $102 per month). TEP's summer-rate season goes from May 1 to September 30.

Would we have a lower bill on a different TEP rate plan?

TEP offers three "Time-of-Use" rate plans — and you can voluntarily switch to any one of them. Under a time-of-use rate plan, you'd pay a different rate depending on when you use energy over the course of a day. Time of use gives you more control over your energy bill. Depending on how you use energy, it could start saving you money immediately.

Newer type of rate plan
Typically referred to as: Time of Use
Abbreviated as: TOU

The next article in this series will go into the time-of-use rate plans in more detail, will help you determine the best one, and will show you how to leverage time of use to cut your bill.

Find out how much you could save with time-of-use. Get personalized results with the Cut My Bill calculator. It's Free and Easy!

Calculate

What are our current TEP energy rates?

If you're on TEP's default residential rate plan (code name: TRRES), here are the rates you currently pay:

Default plan's rates

Plan Name: Residential (TRRES)
Last Update: February 27, 2017
Fixed Charge: Service Charge: $13
Summer (May 1 to September 30)
Rate per kWh
Tier1: $0.106
Tier2: $0.121
Tier3: $0.127
Energy in Tier
Tier1: First 500 kWh
Tier2: Next 500 kWh
Tier3: Above 1,000 kWh
Winter (October 1 to April 30)
Rate per kWh
Tier1: $0.103
Tier2: $0.118
Tier3: $0.124
Energy in Tier
Tier1: First 500 kWh
Tier2: Next 500 kWh
Tier3: Above 1,000 kWh

Are the rates shown here accurate?
Determining the actual rates charged by a utility can be daunting, so websites typically just publish general estimates. Cut My Bill is different — we're showing you your real up-to-date TEP rates. Here are the nitty gritty charges we've accounted for: renewable energy standard charge, power supply charge, environmental compliance adjustor, generation capacity charge, energy charges, transmission charge, purchased power and fuel adjustment, demand side management surcharge, customer charge, lost fixed cost recovery fixed charge.
Rates can be verified here.

We're already on time of use — what are our current rates?

If you're already on one of TEP's optional time-of-use rate plans, here are the rates you currently pay:

Time-of-use plan's rates

Plan Name: Residential,Time-of-Use - Special (R-201B)
Last Update: July 1, 2013
Fixed Charge: Service Charge: $11.79
Summer (May 1 to September 30)
Rate per kWh
Off-Peak: $0.077
Peak: $0.115
Weekday Times
Off-Peak: Midnight to 2pm, 8pm to midnight
Peak: 2pm to 8pm
Weekend Times
Off-Peak: All hours
Peak:
Winter (October 1 to April 30)
Rate per kWh
Off-Peak: $0.059
Peak: $0.098
Weekday Times
Off-Peak: Midnight to 6am, 10am to 5pm, 9pm to midnight
Peak: 6am to 10am, 5pm to 9pm
Weekend Times
Off-Peak: All hours
Peak:
Plan Name: Residential - Time-of-Use, Super Peak (R-8)
Last Update: June 1, 2014
Fixed Charge: Service Charge: $14
Summer (May 1 to September 30)
Rate per kWh
Off-Peak: $0.075
Peak: $0.182
Weekday Times
Off-Peak: Midnight to 4pm, 7pm to midnight
Peak: 4pm to 7pm
Weekend Times
Off-Peak: All hours
Peak:
Winter (October 1 to April 30)
Rate per kWh
Off-Peak: $0.063
Peak: $0.134
Weekday Times
Off-Peak: Midnight to 4pm, 7pm to midnight
Peak: 4pm to 7pm
Weekend Times
Off-Peak: All hours
Peak:
Summer (May 1 to September 30)
Rate per kWh
Tier1: 00
Tier2: $0.048
Energy in Tier
Tier1: First 1,000 kWh
Tier2: Above 1,000 kWh
Winter (October 1 to April 30)
Rate per kWh
Tier1: 00
Tier2: $0.049
Energy in Tier
Tier1: First 1,000 kWh
Tier2: Above 1,000 kWh
Plan Name: Residential Demand - Time-of-Use (TRRESDT)
Last Update: February 27, 2017
Fixed Charge: Service Charge: $10
Summer (May 1 to September 30)
Rate per kWh
Off-Peak: $0.065
Peak: $0.105
Weekday Times
Off-Peak: Midnight to 3pm, 7pm to midnight
Peak: 3pm to 7pm
Weekend Times
Off-Peak: All hours
Peak:
Winter (October 1 to April 30)
Rate per kWh
Off-Peak: $0.064
Peak: $0.071
Weekday Times
Off-Peak: Midnight to 6am, 9am to 6pm, 9pm to midnight
Peak: 6am to 9am, 6pm to 9pm
Weekend Times
Off-Peak: All hours
Peak:
Plan Name: Residential Time-of-Use (TRREST)
Last Update: February 27, 2017
Fixed Charge: Service Charge: $10
Summer (May 1 to September 30)
Rate per kWh
Off-Peak: $0.103
Peak: $0.143
Weekday Times
Off-Peak: Midnight to 2pm, 8pm to midnight
Peak: 2pm to 8pm
Weekend Times
Off-Peak: All hours
Peak:
Winter (October 1 to April 30)
Rate per kWh
Off-Peak: $0.102
Peak: $0.109
Weekday Times
Off-Peak: Midnight to 6am, 10am to 5pm, 9pm to midnight
Peak: 6am to 10am, 5pm to 9pm
Weekend Times
Off-Peak: All hours
Peak:
Summer (May 1 to September 30)
Rate per kWh
Tier1: 00
Tier2: $0.009
Tier3: $0.015
Energy in Tier
Tier1: First 500 kWh
Tier2: Next 500 kWh
Tier3: Above 1,000 kWh
Winter (October 1 to April 30)
Rate per kWh
Tier1: 00
Tier2: $0.009
Tier3: $0.015
Energy in Tier
Tier1: First 500 kWh
Tier2: Next 500 kWh
Tier3: Above 1,000 kWh

How do I work out if I am on the cheapest TEP rate plan for my usage pattern?

To do an exact comparison on how much you would save from switching plans requires collecting your detailed usage data for the last 12 months. This is known as Interval Data and sometimes also called Green Button Data.

 

Interval Data
Green Button data

 

Interval or Green Button data is your electrical usage data for the last 12 months in one hour (or even shorter) intervals. This data is available from your utility provider.

What are the best ways to cut our bill?

We're glad you asked. Let's continue to the article: Three Best Ways to Cut Your Tucson Electric Power Bill.

Ready to stop reading and start cutting (your electric bill)? Click HERE to see how much you can save by switching to a time-of-use rate plan. The Cut My Bill calculator is free and easy.