lost fixed cost recovery (lfcr)
In May 2012, the Arizona Corporation Commission (ACC) approved new rates for APS. Because more customers are installing renewable energy systems such as solar and wind, and energy efficiency measures such as compact fluorescent light bulbs and refrigerator recycling, APS is selling less electricity, but fixed costs remain. APS is allowed to implement a new charge to recover a portion of the fixed costs.
what are fixed costs?
Fixed costs are for items that are needed regardless of how much electricity is sold, such as power poles, wires and other delivery infrastructure.
who is affected by this change?
All residential and small business customers are now subject to lost fixed cost recovery. Large commercial and industrial customers have current rate structures which already include the recovery of fixed costs.
what is the new charge?
A new charge will begin appearing on affected customers’ bills in March 2013 in one of two forms: a flat addition to the existing customer charge (Flat Charge Option) or a new Lost Fixed Cost Recovery (LFCR) percentage of bill charge.