TEP Rate Increase: What Tucson Homeowners Need to Know (2026)
Tucson Electric Power is asking state regulators for a rate increase of about 13% for homes. It is not approved yet. Here is exactly what TEP filed, why your bill keeps climbing, and the one move that takes most of your cost off the utility’s rate sheet for good.
Reviewed May 2026 · Sources cited throughout and listed at the bottom.
The TEP rate increase: the bottom line
- TEP wants to raise prices about 13% for homes. For a normal Tucson home that is about $16 more a month.
- It is not approved yet. The state is still deciding. Nothing has changed on your bill today.
- Power demand is rising fast across Arizona, including southern Arizona, and regular homeowners keep getting stuck with a lot of the bill.
- Solar locks in your power cost. So a future TEP rate hike only hits the small part of power you still buy.
TEP rate increase: key facts at a glance
- What TEP is asking for
- A rate increase of about 13% for residential customers.
- Typical bill impact
- About $16 more per month for a median Tucson home (about 638 kWh), if approved.
- Total revenue requested
- About $172 million more a year.
- The official request
- Filed with the Arizona Corporation Commission (case file E-01933A-25-0103).
- Where it stands
- State meetings to decide began April 22, 2026 (they ran about three weeks); a decision is pending.
- Requested start date
- September 1, 2026, only if the commission approves it.
- Who regulates TEP
- The Arizona Corporation Commission, the same elected body that oversees APS.
Status: pending, not approved
TEP is seeking a rate increase of about 13% for homes. The Arizona Corporation Commission has not voted. Nothing has changed on your bill yet, and the final figure could be lower if the commission cuts the request.
What TEP is asking for
Short answer: TEP is asking the Arizona Corporation Commission to raise rates about 13% for homes, which is about $172 million more a year in revenue. For a median Tucson home using about 638 kWh a month, TEP estimates that adds roughly $16 a month if approved. The request is pending, and TEP has asked for the new rates to start September 1, 2026.
TEP has asked the Arizona Corporation Commission (the elected group that oversees the power company) to raise rates. The ask is about $172 million more a year in revenue, which works out to about a 13% increase for residential customers. For a median home, one using about 638 kWh a month, that is about $16 more a month if it is approved.
The state held its meetings to decide on this; the formal hearing began April 22, 2026 and ran about three weeks. After that, the elected commissioners vote. TEP has asked for the new rates to take effect September 1, 2026, but only if the request is approved. The commission could approve it, cut it down, or deny it.
| What it is | TEP 2026 rate case (pending, not approved) |
|---|---|
| The official request | The case file with the state (Arizona Corporation Commission), number E-01933A-25-0103 |
| Amount requested | About $172 million more a year in revenue |
| How much more homes pay | About 13% for residential customers |
| Typical bill change | About $16 more per month for a median 638 kWh home, if approved |
| Hearing | State meetings to decide began April 22, 2026 (about 3 weeks) |
| Decision | Pending; the elected commissioners vote after the hearing |
| Requested start date | September 1, 2026, only if approved |
Source: TEP 2026 rate case, ACC Docket E-01933A-25-0103. TEP 2026 rates page · Arizona Corporation Commission.
Why your bill keeps climbing
Short answer: Power demand is rising fast across Arizona, including southern Arizona, driven in large part by a wave of new data centers and other big users. Building the grid (the power company’s system) to serve that growing demand costs money, and a lot of that cost lands on regular residential bills.
TEP is not raising rates in a vacuum. Across Arizona, electricity demand is climbing fast, and a big driver is the statewide boom in data centers and other large new power users. TEP and APS, the two big investor-owned utilities the state regulates, both asked for increases of about 13% to 14% at the same time. That is not a coincidence. The same rising-demand pressure is pushing on both of them.
Here is why that matters for you. When a utility has to build more equipment, wires, and power supply to keep up with demand, it costs money. A lot of that cost gets spread across customer bills, and regular homeowners end up carrying a large share of it. You cannot control how fast Arizona grows or how much power a new data center needs. But you can control how much of your own power you buy from the rate sheet at all.
The bottom line: Rising demand across Arizona is pushing power bills up, and regular homeowners are getting stuck with a lot of it. You cannot stop that. But you can stop buying so much power from TEP in the first place, which is exactly what solar does.
Why TEP keeps asking for more
Here is the part most people do not know. TEP is an investor-owned power company that the state regulates, the same kind of company as APS. By law, a company like that earns a guaranteed profit on the equipment and wires it builds. The more it spends on new equipment, the more money it is allowed to charge you. That is a big reason these requests keep coming.
This is not a secret or a scam. It is just how a regulated power company works. The state sets a fixed rate of return (the guaranteed profit) on what the utility builds, so building more, like the grid to serve all that rising demand, means the company is allowed to collect more from customers. That is why a wave of new spending tends to bring a wave of new rate requests right behind it.
Source: TEP 2026 rate case, ACC Docket E-01933A-25-0103. TEP 2026 rates page · Arizona Corporation Commission.
What it means for your bill
Short answer: If the TEP increase is approved, a median Tucson home (about 638 kWh a month) would pay roughly $16 more per month. That is an illustrative estimate, not a guarantee: your actual change depends on your usage and rate plan, and rate increases compound on top of the ones already on your bill.
Take the numbers at face value. If the 13% request is approved, a median Tucson home using about 638 kWh a month would pay roughly $16 more per month. That is an estimate, not a promise: your bill depends on your usage, your rate plan, and the final figure the commission lands on. Use it as a range, not a guarantee.
The harder truth is that a rate increase does not happen once. It compounds. Once one increase is on your bill, the next one stacks on top of it, and the rising demand driving these requests is not slowing down. Here is what power costs a home like yours today, and why solar caps it.
A home about this big in Arizona
What power costs, and what solar saves
Bigger home, more air conditioning, bigger power bill. Here is roughly what a home each size spends on power from APS today, and roughly how much it would save with its own solar.
-
Smaller home
about 1,200 sq ft
$110–$140 a month to APS now
$1,300–$1,700 a year to APS now
With your own solar, save about $1,050–$1,600 a year, on average roughly $90–$135 a month back in your pocket
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Average home
about 1,800 sq ft
$170–$210 a month to APS now
$2,000–$2,500 a year to APS now
With your own solar, save about $1,550–$2,450 a year, on average roughly $130–$205 a month back in your pocket
-
Bigger home
about 2,800 sq ft
$270–$320 a month to APS now
$3,200–$3,800 a year to APS now
With your own solar, save about $2,400–$3,800 a year, on average roughly $200–$315 a month back in your pocket
These are rough estimates, not a quote. Your real number depends on your home, your AC, your roof, and your rate plan.
Here is why solar saves you money
It comes down to the price of one unit of power (one kilowatt-hour).
about 15.46¢ a unit
It climbs about 5% every year as APS raises rates.
about 11¢ a unit
$0 down, and the price stays the same year after year.
Your solar price is locked. APS keeps climbing. Today the gap is about 4.5¢ a unit, and every year APS goes up, you save more.
Solar locks in most of your power cost, so it stops climbing. The longer you wait, the more APS raises rates, and the more you miss out on.
How we got these: an Arizona home uses about 0.68 kilowatt-hours per square foot each month (higher than the national average because of air conditioning), at the APS average rate of 15.46 cents per kilowatt-hour, which climbs about 5% a year as rates rise. For a roughly 2,000 sq ft home that lands near the Arizona average of about 1,422 kWh and about $164 a month; summer bills run higher, often $200 to $250. The solar savings are figured the same way our savings calculator figures them: solar covers about 92% of your power at a locked rate of about 11 cents a unit with $0 down (about 7 cents if you pay cash), while APS keeps rising. The savings shown are an average per year over 25 years, so they start smaller and grow as APS climbs. These are rough estimates, not a quote. Your exact cost and savings come from the free savings review. Sources are listed on this page.
The bottom line: a bigger home pays more, and every TEP increase pushes that number higher. Solar locks most of it in.
When you own a solar system, the electricity it makes costs you the same every year. A TEP increase only touches the power you still buy at night or on cloudy days, which is a much smaller number once your roof carries most of your daytime load. Southern Arizona gets some of the strongest sunlight in the country, so a well-sized system can cover a large share of a home’s usage. Pair panels with a battery and you lean on the grid even less, so the next TEP rate case barely moves your bill.
Want to see the shape of the numbers for your home? Estimate my savings
TEP and the Tucson area
TEP provides power to Tucson and much of southern Arizona. If you are a TEP customer, the rate increase on this page is your rate increase, and we design and manage solar across your area. Tap Tucson below to see how solar looks where you live.
Beyond Tucson, TEP serves homes across southern Arizona, and we design and manage solar throughout the region. Not sure which utility you have? We will check when we run your free savings review. Estimate my savings Book a free review
What you can do about it
Short answer: You cannot change the TEP rate case, but you can control how much power you buy from the utility. Rooftop solar, often with $0 down, takes a large share of your usage off the rate sheet, so future increases apply to a much smaller number. A free savings review runs your real numbers and gives an honest answer, even if the answer is no.
You cannot vote in the TEP rate case. You cannot control how the Corporation Commission rules, or how fast Arizona keeps growing. But you do control one big lever: how much power you buy from the utility in the first place.
Rooftop solar, often with $0 down, takes a large share of your usage off the rate sheet. The power your panels produce is not subject to the next increase, or the one after that. Instead of being fully exposed to a rate you do not control, you fix most of your cost up front.
We are not going to oversell it. Solar does not fit every roof or every bill. If your roof, shade, or usage means it does not pencil out, we will tell you that to your face. The free review is exactly that: we run your real numbers, on your actual TEP bill, and give you an honest answer.
TEP rate increase: common questions
Is the TEP rate increase approved?
No. As of May 2026 the TEP rate increase is not approved. TEP is asking the Arizona Corporation Commission for it. The state is now holding meetings to decide (the formal hearing began April 22, 2026 and ran about three weeks). After those meetings the elected commissioners vote. Until that vote, nothing has changed on your bill.
How much is the TEP rate increase?
TEP is asking to raise rates about 13% for homes. That is about $16 more per month for a normal Tucson home (one using about 638 kWh a month). In total TEP wants to collect about $172 million more a year. The official request is still pending, so the final figure could be lower if the commission cuts it.
When would TEP rates go up?
Not yet, and only if the increase is approved. TEP has asked for the new rates to take effect September 1, 2026. First the Arizona Corporation Commission has to vote. The hearing began April 22, 2026, and a decision is pending. The increase could also be reduced or denied.
Can solar protect me from TEP rate hikes?
It can cap a large part of your exposure. The power your panels produce costs the same every year, so a TEP rate increase only applies to the electricity you still buy from the grid. Once your roof covers most of your daytime usage, a rate hike moves a much smaller number. We will run your real numbers and tell you honestly if solar does not fit your home.
Do you install solar in Tucson?
Yes. We serve homeowners across Arizona, including Tucson and southern Arizona, and TEP customers are fully covered. Southern Arizona gets some of the best sunlight in the country, so the production case is strong. Reach out and we will walk you through what solar looks like on your roof and your TEP rate plan.
Sources
- TEP, 2026 rates (ACC Docket E-01933A-25-0103).
- Arizona Corporation Commission (rate-case authority and docket records).
Figures reflect the rate case as of May 2026. The 2026 TEP increase is pending and could be changed or denied by the Arizona Corporation Commission. Bill-impact figures are illustrative estimates for the usage levels noted and are not a guarantee for any individual home.
See what the TEP increase costs your home.
Bring a recent TEP bill. We will run your real numbers and tell you honestly what solar would do for it, even if the answer is no. No pressure, no hard sell.