Dive Brief:

• Tucson Electric Power is developing several new efficiency programs and has requested state regulators to approve implementation plans for the next two years that would maintain a stable budget as they are rolled out.
• The Arizona Corporation Commission (ACC) approved TEP's 2018 Energy Efficiency implenentation plan in February; last week the utility filed an application asking regulators to treat the approved plan as its 2019 and 2020 implementation plans as well.
• TEP's plan includes a new residential load management pilot, an increased budget for the utility's Schools Energy Efficiency Program, larger weatherization incentives for limited-income customers and a new energy storage pilot program. They will launch just as the utility has proposed a major rate increase.

Dive Insight:

TEP received the go-ahead in February to roll out a significant expansion to its efficiency program offerings, and officials say its filing with regulators last week is an attempt to create stability as it executes the new slate.

If the ACC approves the 2019 and 2020 implementation plans, it "would essentially maintain the budget, customer surcharge and program offerings for an extended period of time," TEP spokesman Joseph Barrios told Utility Dive. "This would give us the opportunity to efficiently and effectively roll out innovative new programs while maintaining program offerings that our customers support."

Maintaining the implementation plan will also "avoid subjecting TEP customers to a further [Demand Side Management] rate adjustment in the near term," according to the application.

According to the utility, its energy efficiency programs saved more than 170,000 MWh in 2017.

TEP also recently filed to increase rates, telling regulators in an April 1 filing that current rates do not reflect about $1.2 billion the company has invested since June 2015. 

If approved, TEP's proposal would raise the average customer bill by about $7.61/month, relative to 2018 levels. The increase includes the planned purchase of a second unit at the gas-fired Gila River Generating Station before the end of this year.

TEP has more than 500 MW at the coal-fired Navajo and San Juan Generating Stations, but those plants are slated to close in 2019 and 2022, respectively. The utility said it plans to use the output of Gila River Unit 2 to replace the lost capacity.

TEP President and CEO David Hutchens said in a statement that the new capacity "will generate great long-term value for our customers, providing responsive energy" to support and the utility's growing renewable portfolio.

By 2021, the utility expects to have a renewable portfolio in excess of 1 GW.

TEP says it has been upgrading its transmission and distribution systems as the city's population and economy has grown. In the last four years, the utility says it has seen peak demand increase almost 9%, and it has added almost 9,000 new customers. The utility serves about 425,000 customers in Southern Arizona.