Purchased Power and Fuel Adjustment Charge

The Purchased Power and Fuel Adjustment Charge, or PPFAC, is a usage-based charge that reflects changes in the costs UniSource incurs to fuel its power plants and purchase energy for electric customers. The charge includes only costs that are not already incorporated in base power supply rates.

UniSource passes along these costs without any markup and earns no profit from this charge. The following questions and answers offer more information about the PPFAC.

Why does the PPFAC change from month to month?

The rate is adjusted monthly based on a 12-month “rolling” average of recent energy costs, with limits on month-to-month increases. Because of those limits, the PPFAC sometimes cannot keep up with significant changes in market energy prices. When that happens, the Arizona Corporation Commission (ACC) may approve a temporary surcharge or credit to recover or refund the difference between the amount UniSource has paid for energy and the amount it has recovered through the charge.

Have any surcharges or credits been added to bills for 2022?

In January 2022, the ACC approved a temporary PPFAC surcharge for use beginning in February 2022. The surcharge is expected to remain on bills for two and a half years, helping to recover costs that UniSource paid for fuel and power during extreme summer heat and throughout severe winter storms that affected the West. The price of natural gas more than doubled across the country in 2021, increasing the cost of operating UniSource’s power plants as well as the price for power purchased on the wholesale energy market.

The ACC also approved UniSource's request to apply a tax savings credit to customer bills for two years along with the PPFAC surcharge. These credits will help mitigate the impact of higher energy costs on customer’s bills.

How do these changes affect UniSource electric bills?

For residential customers, the temporary PPFAC surcharge and the tax credit will result in an estimated monthly bill increase of $6.72 through July 2024. The actual impact will vary based on individual usage.

Where can I view the current PPFAC rate?

The current rate is updated monthly and listed in our electric rates section.

How does the PPFAC appear on my monthly bill?

The PPFAC appears on your bill under the heading “Power Supply Charges” along with your base power supply rate.

Do other utilities have charges like this?

Yes. Similar components are included in the electric rates of UES’ sister company, Tucson Electric Power, as well as in those charged by Arizona Public Service and many other electric utilities.

Do all customers have to pay this charge?

Customers of our Bright Arizona Community Solar program are not required to pay the PPFAC for solar power purchased through the program.

Will my bill be lower if I purchase solar power through the Bright Arizona Community Solar program?

Bright Arizona Community Solar is not designed to reduce customers’ electric bills. Rather, it offers an easy, affordable way to meet your electric needs with clean, renewable energy. Participants in the Bright Arizona Community Solar program can purchase 150 kWh “blocks” of solar energy produced by local photovoltaic arrays. Each block will replace the charges for an equivalent amount of traditional power at a cost that adds $3 apiece to participants’ monthly bills. Because solar power currently costs more than traditional energy resources, the energy blocks available from the Bright Arizona Community Solar Program will add to your monthly electric bill. But the price you’ll pay for each block will remain fixed for 20 years under ACC-approved program rules, so you may realize future savings if the cost of traditional energy resources increases. See the Bright Arizona Community Solar page for more information.