Arizona Electricity Price Increases

Part
01
of two
Part
01

Average year to year electricity price increase for APS and ED3

In 2019, APS reduced its electricity bill rate by 2% and between 2017-2018, ACC approved a 4.5% increased rate in electricity bill for APS. Over the past eight years, ED3 has had a constant electricity rate. In 2019, 2018, 2017, 2016, and 2015, ED3 had reduced its electricity bill by 2%, 3.16%, and 5.16%.

ARIZONA PUBLIC SERVICE ELECTRIC COMPANY

AVERAGE ELECTRICITY PRICE INCREASE OVER THE PAST YEARS

  • In 2019, APS announced a rate decrease of 2% effective from January 2019.
  • In 2017, the Arizona Corporation Commission approved a 4.5% increased rate for APS to resolve its first-rate review in five years. The increased rate will raise the cost of the electricity bill in a residential apartment by $6 per month.
  • The APS electricity service charge consists of a basic service charge of $0.329 per day and an energy charge of $0.11672 per kWh for a small residential apartment.

ELECTRICAL DISTRICT #3

AVERAGE ELECTRICITY PRICE INCREASE OVER THE PAST YEARS

  • ED3's energy rate remained largely constant between 2008 to 2015 while in the last three years (from 2016 to 2018) the company have had rate decreases.
  • In 2019, ED3 announced a rate decrease of 2% effective from January 2019.
  • In 2017-2018, ED3 had a rate decrease of 3.16%.
  • In 2015-2016, ED3 had a rate decrease of 5.16%.
  • ED3's basic service charge per month for a single private residence is $11.86 for overhead service and $15.65 for underground primary service.
  • The actual dollar values of electricity price increases were not available in the public domain because of the variations in consumption rate by residential, commercial, small industry, large industry, and agricultural consumers. Therefore, the percentage change has been used to report the requested information.

RESEARCH STRATEGY

To locate the average year to year electricity price increases for APS and ED3, we began by combing through the companies' websites, annual reports, and newsletters. While we were able to locate sufficient information regarding ED3 historic rate changes in electricity bill, there was limited information regarding APS historic rate change in electricity. We have reported information regarding rate change over the past three years for the APS company.

Our research team went further to scour through industry reports, press releases, and market research analysis for information regarding the historic rate change of the APS electricity bill. This strategy failed to locate the desired information. What we did find was information on the plans of APS to temporarily halts customer disconnections in 2019. We also found articles that discussed the increase in electricity bill in the US from 2013-2018, as well as information on the projected growth for the next 20 years.

Next, we conducted a historic search using the Wayback Machine database for information regarding historic rate changes of the APS electricity bill. Again, this strategy was not successful as there was no information regarding APS from 1996-2012.

Lastly, we broadened the scope of the research by looking for surveys regarding consumers satisfaction and complaint regarding the APS rate changes of their electricity bill. We were not able to locate valuable information regarding the historic rate change of APS electricity bill. Data found pointed to the fact that there has been an increase in the residential electricity bill by APS since 2015.

After an extensive search, we, therefore, concluded that there was no publicly available information regarding APS historic rate change in electricity bill till 2017.
Part
02
of two
Part
02

Average year to year electricity price increase for SRP and TEP

Salt River Project’s average electricity prices surged 53.9% in 2018 as compared to almost 20 years ago in 1999. Tucson Electric Power’s average electricity prices increased sharply by 35.5% as compared to almost 20 years ago in 1999.

SALT RIVER PROJECT

2018

  • Salt River Project’s residential electricity revenue in value was at $1,546,535,000 in 2018. Its residential electricity revenue in total units sold was at 13,238,810 megawatt-hours.
  • Therefore, its average residential electricity price in 2018 was at $116.81 per megawatt-hour.
  • Further, the average residential electricity price in 2018 by Salt River Project was at $0.1168 or US cents 11.7 per kilowatt-hour.
  • In 2018, Salt River Project’s average electricity prices increased by 4.5% as compared to five years ago (2013), jumped 21.9% as compared to 10 years ago (2008), and surged 53.9% as compared to almost 20 years ago (1999).

2013

  • Salt River Project’s residential electricity revenue in value was at $1,407,566,000 in 2013. Its residential electricity revenue in total units sold was at 12,581,984 megawatt-hours.
  • Therefore, its average residential electricity price in 2013 was at $111.87 per megawatt-hour.
  • Further, the average residential electricity price in 2013 by Salt River Project was at $0.1118 or US cents 11.2 per kilowatt-hour.
  • In 2013, Salt River Project’s average electricity prices rose 16.7% as compared to 5 years ago (2008) and 47.4% as compared to 14 years ago (1999).

2008

  • Salt River Project’s residential electricity revenue in value was at $1,232,609,000 in 2008. Its residential electricity revenue in total units sold was at 12,775,125 megawatt-hours.
  • Therefore, its average residential electricity price in 2008 was at $96.48 per megawatt-hour.
  • Further, the average residential electricity price in 2008 by Salt River Project was at $0.0964 or US cents 9.6 per kilowatt-hour.
  • In 2008, Salt River Project’s average electricity prices climbed 26.3% as compared to almost 10 years ago (1999).

1999

  • Salt River Project’s residential electricity revenue in value was at $681,775,000 in 1999. Its residential electricity revenue in total units sold was at 9,020,380 megawatt-hours.
  • Therefore, its average residential electricity price in 1999 was at $75.58 per megawatt-hour.
  • Further, the average residential electricity price in 1999 by Salt River Project was at $0.07558 or US cents 7.6 per kilowatt-hour.

TUCSON ELECTRIC POWER

2018

  • Tucson Electric Power’s residential electricity revenue in value was at $473,673,200 in 2018. Its residential electricity revenue in total units sold was at 3,766,234 megawatt-hours.
  • Therefore, its average residential electricity price in 2018 was at $125.77 per megawatt-hour.
  • Further, the average residential electricity price in 2018 by Tucson Electric Power was at $0.1257 or US cents 12.6 per kilowatt-hour.
  • In 2018, Tucson Electric Power’s average electricity prices increased sharply by 21.1% as compared to five years ago (2013), rose 38.5% as compared to 10 years ago (2008), and surged 35.5% as compared to almost 20 years ago (1999).

2013

  • Tucson Electric Power’s residential electricity revenue in value was at $400,999,400 in 2013. Its residential electricity revenue in total units sold was at 3,866,665 megawatt-hours.
  • Therefore, its average residential electricity price in 2013 was at $103.71 per megawatt-hour.
  • Further, the average residential electricity price in 2013 by Tucson Electric Power was at $0.1037 or US cents 10.4 per kilowatt-hour.
  • In 2013, Tucson Electric Power’s average electricity prices rose 14.3% as compared to 5 years ago (2008) and 11.8% as compared to 14 years ago (1999).

2008

  • Tucson Electric Power’s residential electricity revenue in value was at $351,078,000 in 2008. Its residential electricity revenue in total units sold was at 3,852,707 megawatt-hours.
  • Therefore, its average residential electricity price in 2008 was at $91.12 per megawatt-hour.
  • Further, the average residential electricity price in 2008 by Tucson Electric Power was at $0.0911 or US cents 9.1 per kilowatt-hour.
  • In 2008, Tucson Electric Power’s average electricity prices edged down 2.1% as compared to almost 10 years ago (1999).

1999

  • Tucson Electric Power’s residential electricity revenue in value was at $253,352,000 in 1999. Its residential electricity revenue in total units sold was at 2,736,837 megawatt-hours.
  • Therefore, its average residential electricity price in 1999 was at $92.57 per megawatt-hour.
  • Further, the average residential electricity price in 1999 by Tucson Electric Power was at $0.0926 or US cents 9.3 per kilowatt-hour.

ADDITIONAL FINDINGS

ARIZONA STATE AVERAGE ELECTRICITY PRICE

  • In 2018, the average electricity price in Arizona was around US cents 12.8 per kilowatt-hour, up 9.4% as compared to five years ago (2013), rose 24.3% as compared to 10 years ago (2008), and increased 54.22% as compared 17 years ago (2001).
  • In 2013, the average electricity price in Arizona was US cents 11.7 per kilowatt-hour.
  • The average electricity price in Arizona in 2008 was US cents 10.3 per kilowatt-hour.
  • In 2001, the average electricity price in Arizona was US cents 8.3 per kilowatt-hour.

RESEARCH STRATEGY

To find the average electricity price increases for Salt River Project (SRP) and Tucson Electric Power (TEP) over the last 5, 10, 15, or 20 years, we scoured through various articles to find pre-compiled information on percentage increases and/or the average price by these two utility providers. We were able to find only a few articles that talked about increases in terms of value for recent years. To compare the value with historical prices, we looked for news articles and press releases for pricing information that were published earlier in the 2000s. However, this strategy did not provide any relevant results. These articles only covered information about the utility providers’ monthly bills of customers, sector-wise electricity data, state and region-wise consumption data, solar information, and project news.

We decided to consult the official government website for energy information — the U.S. Energy Information Administration (EIA) to find the average prices by various utility providers. However, the website reports only covered information about the sector and region-wise prices. We also found sales and consumption data for each utility provider in the United States. This helped us to triangulate the average electricity price annually for a particular utility provider. The data was officially published in the form of a zipped file containing several excel files. We’ve attached the download links of the zipped files as well the source website in the sources. Additionally, for easy accessibility, we’ve combined the relevant sheets in Google Excel with the right set of data used for triangulation.

CALCULATIONS:

We’ve used the below formula to calculate the average electric prices per megawatt for both the utility providers for each year:
Average electricity price per unit = total amount of sales in US$/total units sold in megawatt-hour

SALT RIVER PROJECT

[A] Residential electricity revenue in US dollars
1999: $681,775,000
[B] Residential electricity revenue in megawatt-hour
2018: 13,238,810
2013: 12,581,984
2008: 12,775,125
1999: 9,020,380
[C] The average residential electricity price (Calculation: A / B = C)
2018: $116.81 per megawatt-hour
2013: $111.87 per megawatt-hour
2008: $96.48 per megawatt-hour
1999: $75.58 per megawatt-hour
[D] Converting the megawatt-hour price into kilowatt-hour price (Calculation: C / 1000 = D)
2018: $0.1168 or US cents 11.7 per kilowatt-hour
2013: $0.1118 or US cents 11.2 per kilowatt-hour
2008: $0.0964 or US cents 9.6 per kilowatt-hour
1999: $0.07558 or US cents 7.6 per kilowatt-hour
[E] Percentage change in average prices (Calculations: [recent year’s price - previous year’s price] / previous year’s price)
2018: [(11.7-11.2)/11.2], [(11.7-9.6)/9.6], and [(11.7-7.6)/7.6]
= 4.5%, 21.9%, and 3.9%

2013: 11.2 per kilowatt-hour [(11.2-9.6)/9.6] and [(11.2-7.6)/7.6]
= 16.7% and 47.4%

2008: 9.6 per kilowatt-hour [(9.6-7.6)/7.6]
= 26.3%

TUCSON ELECTRIC POWER

[A] Residential electricity revenue in US dollars
2018: $473,673,200
2013: $400,999,400
[B] Residential electricity revenue in megawatt-hour
2018: 3,766,234
2013: 3,866,665
2008: 3,852,707
1999: 2,736,837
[C] The average residential electricity price (Calculation: A / B = C)
2018: $125.77 per megawatt-hour
2013: $103.71 per megawatt-hour
2008: $91.12 per megawatt-hour
1999: $92.57 per megawatt-hour
[D] Converting the megawatt-hour price into kilowatt-hour price (Calculation: C / 1000 = D)
2018: $0.1257 or US cents 12.6 per kilowatt-hour
2013: $0.1037 or US cents 10.4 per kilowatt-hour
2008: $0.0911 or US cents 9.1 per kilowatt-hour
1999: $0.0926 or US cents 9.3 per kilowatt-hour
[E] Percentage change in average prices [Calculations: (recent year’s price - previous year’s price) / previous year’s price]
2018: [(12.6-10.4)/10.4], [(12.6-9.1)/9.1], and [(12.6-9.3)/9.3]
= 21.1%, 38.5%, and 35.5%

2013: [(10.4-9.1)/9.1] and [(10.4-9.3)/9.3]
= 14.3% and 11.8%

2008: [(9.1-9.3)/9.3]
= -2.1%

ARIZONA STATE

Percentage change in average prices (Calculations: [recent year’s price - previous year’s price] / previous year’s price)
2018: [(12.8/11.7)/11.7], [(12.8/10.3)/10.3], and [(12.8/8.3)/8.3]
= 24.3%, 9.4%, and 54.22%
Sources
Sources