Hearing - E-01933A-25-0103 - Tucson Electric Power Company Tucson - May 06, 2026

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Arizona Corporation Commission 7h 31m 8 agenda items transcribed 1 day ago official recording ↗

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What procedural steps and witness introductions open this hearing?

Unknown 0:00

Let's go on the record. Good morning. Welcome back. This is day 11. Rate case, docket number ending 2503. And we do have a new court reporter today, so it may be helpful if everyone just gives their name before they speak today, just so. We're making it a little bit easier on her and we will start with asking if anyone has any procedural issues or preliminary matters they'd like to address this morning. OK, then with that Miss Johnson, you can go ahead and call your witness.

Autumn Johnson 0:48

For the benefit of the court reporter, I am Autumn Johnson, J-O-H-N-S-O-N, on behalf of the Arizona Solar Energy Industries Association, or ARESIA, and we would call Mr. Kevin Lucas.

Unknown 1:01

Mr. Lucas, can you please raise your right hand? You swear or affirm that the testimony you're about to give is the truth, the whole truth, and nothing but the truth.

Kevin Lucas 1:10

I do.

Autumn Johnson 1:13

Good morning, Mr. Lucas. Are you able to hear me okay?

Kevin Lucas 1:16

Yes, I can.

Autumn Johnson 1:17

Okay, could you please state your name for the record?

Kevin Lucas 1:19

It is Kevin Lucas. That's K-E-V-I-N-L-U-C-A-S.

Autumn Johnson 1:27

And by whom are you employed?

Kevin Lucas 1:29

By the Solar Energy Industries Association, or SIA.

Autumn Johnson 1:33

And on whose behalf are you testifying today?

Kevin Lucas 1:37

On behalf of the Arizona Solar Energy Industries Association, or ARESIA.

Autumn Johnson 1:43

Is ARESIA one your direct testimony in this matter?

Kevin Lucas 1:46

Yes, it is.

Autumn Johnson 1:47

And is Aracia 2 your surrebuttal testimony?

Kevin Lucas 1:50

Yes, it is.

Autumn Johnson 1:52

And were they prepared by you?

Kevin Lucas 1:54

Yes, they were.

Autumn Johnson 1:57

If I were to ask you the same questions today under oath, would your answers be the same or substantially similar?

Kevin Lucas 2:03

Yes, they would.

Autumn Johnson 2:04

Your Honor, I move to admit Aracia 1 and 2. Any objections?

Unknown 2:14

Hearing none, ARCIA 1 and ARCIA 2 are admitted.

Autumn Johnson 2:19

Mr. Lucas, can you please provide a brief summary of your testimony for the record?

Kevin Lucas 2:24

Certainly. I'm focused primarily in this case on time of use rates, mostly focused on the residential system, but also on a couple of specific rates that I recommend for the non-commercial or non-residential system as well. Time of use rates are a very important tool that utilities are looking towards at the moment to really help address some of the challenges that they're facing in terms of sizable increases in peak demand and affordability questions. Time of use rates, when properly designed, can provide a robust price signal for customers to shift their usage out of the peak period, which is the main reason why utilities are needing to build new capacity in order to meet their growing load. If a price signal is available that tells customers

Kevin Lucas 3:08

to reduce their usage during these peaks and shift it to non-peak periods, the existing infrastructure can be stretched further and meet a longer period of time of customer growth without having to build new assets. It's a potent resource that requires no additional capital expenditures and can increasingly be facilitated at the customer site through technology solutions such as smart thermostats, building automation, and battery storage. When I was analyzing TEP's rates, As I found in the prior rate case in 2022, their current rates on the time of use are just too complex and are being adopted at a very slow rate. I went back and looked at over a decade of history on how these rates are being adopted at the residential level.

Kevin Lucas 3:53

And the adoption is very slow and substantially lags those of Arizona Public Service or APS. despite the fact that APS and TEP have very similar usage profiles, very similar residential usage profiles in particular, and have load shapes that largely peak at the same time. By failing to capitalize on the time of use rates, TEB is basically leaving a potential sizable benefit on the sideline right now at a time when it needs to be leveraging every asset that it has and every tool that it has to meet its load and manage prices. One of the main issues with the TEP TOU rates is a lack of an actionable and meaningful price signal for customers to shift usage. The reality is, is that the current price signal for residential customers is just too small to make a meaningful difference.

Kevin Lucas 4:44

I went through the company's various load curves, both at the system level and the residential class level and non-residential class level to analyze how these recommendations, how the TOU rate should be changed and modified.