TEP’s Rate Case, Explained: What It Means for Your Tucson Power Bill (and Your Solar Payback)

If you’ve seen headlines about Tucson Electric Power asking for a rate increase, here’s the short version: a decision from the Arizona Corporation Commission is expected late this year, and how it lands affects your bill and how fast solar pays for itself.

This post explains what TEP asked for, what’s being contested, what the process looks like from here, and what it could mean if you have solar or are thinking about it.

What TEP asked for

TEP filed its rate request in June 2025, seeking to recover about $1.7 billion in infrastructure investments made since 2021. Its original ask was roughly $172 million more in revenue, about 14%. In June 2026, TEP trimmed that to about $162 million, or 12.6%, after input from regulators’ staff and consumer advocates. TEP says a median household using 638 kWh a month would see an increase of about $13 a month under its updated proposal. New rates are targeted for December 1, 2026.

To put that in perspective, $13 a month works out to about $156 a year for a median household. Your own number will be higher or lower depending on how much power you use, especially in summer.

What’s being pushed back

Arizona Attorney General Kris Mayes’ office argues TEP could keep reliability up with an increase closer to 4%, and says the real impact on typical residential customers is nearer 14.6% than TEP’s figure. Pima County supervisors and the Tucson City Council have also weighed in on affordability. Hearings ran from April 22 through May 12, an administrative law judge’s recommendation is expected around October, and then the five elected commissioners vote. The outcome is not settled, so treat every number here as a range.

How the process works from here

1. Hearings wrap up. Testimony from TEP, commission staff, the Attorney General’s office and other parties has been heard.
2. A judge recommends. An administrative law judge reviews the record and issues a recommended order, which is expected around October.
3. The commission votes. The five elected commissioners can approve, change or reject the recommendation.
4. New rates take effect. If approved, TEP has targeted December 1, 2026, though the final date and amounts can shift.

Why it matters if you have (or want) solar

• A higher retail rate makes your own solar power worth more. Every kWh you make and use yourself replaces a kWh you’d buy at that higher price.
• Exports are still credited at less than retail. Under Arizona’s current rules, exported solar earns a below-retail credit, so using your power at home beats sending it to the grid.
• A battery helps you use more of your own power. Storing midday solar for the evening is how homeowners get closer to the full retail value.

What if the increase is smaller than TEP asked for?

Then the bill impact is smaller, and the solar math shifts a little less. That’s the point of running more than one scenario. A good estimate shows you what solar looks like at today’s rates, at a modest increase, and at something closer to TEP’s ask. If the numbers only work in the highest scenario, that’s worth knowing before you sign anything.

Don’t decide on a rate hike alone

Here’s the honest part: a bill that might go up is a reason to run the numbers, not a reason to sign anything. A solid solar decision should pencil out at today’s rates, with a higher-rate scenario as a bonus. When we build an estimate, we show both. Also consider your rate plan: time-of-use or demand-based plans can change what solar and storage are worth.

How to read your own bill

Look for three things on your TEP statement. First, your monthly kWh usage, especially in summer. Second, the rate plan you’re on. Third, any separate charges that don’t change with usage. Once you know those, you can compare your bill against a rate change and see what a solar system would actually offset.

What you can do now

• Pull your last 12 months of TEP bills and note your summer usage.
• Find out which rate plan you’re on and whether other plans are available to you.
• Look at when you use power. Evening-heavy usage is where storage helps most.
• Follow the commission’s decision so you know what actually got approved.

Common questions

Should I go solar because of this rate case? Use it as a reason to look, not as the only reason to buy. The decision should hold up on your own numbers.

Will a battery help if rates go up? It can, because it lets you use more of your own power instead of buying it back at the higher price. How much depends on your usage and plan.

When will I know the final numbers? After the commission votes. Until then, everything is a proposal.

Learn more about solar and storage and battery storage, or see our Tucson page.

Get your free solar + battery savings estimate. Call 800-306-6953 or visit empoweryourhome.com.