TEP to Share Energy Cost Savings with Customers Through Reduced Charge

TUCSON, Ariz.–(BUSINESS WIRE)–Tucson Electric Power (TEP) customers will pay lower energy costs this
summer thanks to reduced fuel and purchased power prices.

The Arizona Corporation Commission has approved TEP’s request to
decrease the Purchased Power and Fuel Adjustment Charge (PPFAC) on its
customers’ monthly bills beginning May 1. The change is expected to
reduce the average monthly bill of a typical residential customer by
$4.26. The savings will likely be even greater during the summer, when
customers typically use more energy.

“This reduction will take effect just in time to help reduce the impact
of home cooling expenses on our customers’ summertime bills,” said David
G. Hutchens, TEP’s President and Chief Executive Officer.

The PPFAC is a usage-based charge that reflects changes in the costs TEP
incurs to fuel its power plants and purchase energy for customers. TEP
passes these costs along to customers without any markup through the
PPFAC, which appears on customers’ bills under “Power Supply Charges.”

The charge, currently about seven-tenths of a cent per kilowatt-hour
(kWh), will be reduced to less than two-tenths of a cent per kWh from
May 1 to March 31, 2017. The lower rate passes along savings realized
through recent reductions in natural gas and purchased power expenses.

While TEP customers will be paying lower energy costs this summer,
increased usage will still result in higher overall bills. TEP offers
many ways to help customers manage their energy expenses, including
energy efficiency options and billing programs. TEP’s Budget Billing
program levels out seasonal swings in monthly bills by dividing
customers’ estimated annual charges into 12 equal monthly payments.
Discounted rates and emergency bill payment assistance also are
available to eligible limited-income customers.

TEP provides safe, reliable electric service to approximately 417,000
customers in Southern Arizona. For more information, visit tep.com.
TEP and its parent company, UNS Energy, are subsidiaries of Fortis Inc.,
which owns utilities that serve more than 3 million customers across
Canada and in the United States and the Caribbean. To learn more, visit fortisinc.com.

Contacts

Tucson Electric Power
Joseph Barrios, 520-884-3725
jbarrios@tep.com