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Adjustors help us keep the amount you pay for electricity in line with what it actually costs us to provide power. Adjustor also help pay for renewable energy programs and incentives. Adjustors are reviewed regularly by the Arizona Corporation Commission (ACC) and change to accurately reflect our costs.
environmental benefits surcharge

A combination of the Renewable Energy Standard Adjustment (REAC) and the Demand Side Management Adjustment Charge (DSMAC). The DSMAC and REAC are combined on the bill and display as "Environmental Benefits Surcharge" (EBS) for both Residential and Non-Residential customers.

renewable energy adjustment charge (reac)

The Renewable Energy Adjustment Charge is a portion of the Environmental Benefits Surcharge which is a line item on customer bills – the other portion of that surcharge is the Demand Side Management Adjustment Charge.

This small charge has a big impact on making Arizona one of the top solar markets in the United States. Money raised through the renewable energy adjustment charge helps to pay for customer performance-based incentives for solar water heating, solar electric systems, geothermal systems, and more. These funds also pay for renewable energy that we buy through power purchase agreements from solar facilities like the Saddle Mountain Solar Power Plant or the Solana Generating Station, to name just two.

We use some of these renewable energy adjustment charge monies to develop our own solar and renewable energy generating facilities, like those installed on schools throughout Arizona or AZ Sun projects like the Hyder facilities near Yuma, Gila Bend, and Chino Valley.

APS solar incentives are paid for by our customers.

demand side management adjustor charge (dsmac)

The Demand Side Management Adjustor Charge is a portion of the Environmental Benefits Surcharge which is a line item on customer bills – the other portion of that surcharge is the Renewable Energy Adjustment Charge.

The Demand Side Management Adjustor (DSMAC) is used to pay for energy efficiency programs and services needed to stay on track to meet the state’s goal to reduce energy usage by 22% by 2020.

environmental improvement surcharge (eis)
The EIS helps us recover a portion of the cost of investments and expenses for environmental improvements at our generation facilities to comply with environmental standards mandated by federal laws or regulations.
federal transmission cost adjustor (tca)

​The TCA collects for annual changes in transmission-related costs to serve retail customers. Transmission lines are regulated by the Federal Energy Regulatory Commission (FERC). Changes to the TCA are authorized by FERC and later confirmed by the Arizona Corporation Commission (ACC) before they are passed on to the retail customers.

power supply adjustor (psa)
To deal with the rapid changes in fuel and purchased power costs, APS received permission in April of 2005 from the Arizona Corporation Commission (ACC) to pass on fuel (primarily natural gas) and purchased power costs beyond those included in base rates through a Power Supply Adjustor (PSA).
rate sheet
lost fixed cost recovery (lfcr)

The LFCR recovers a portion of unrecovered fixed cost resulting from energy efficiency and distributed generation programs.

The LFCR is the result of the 2012 settlement of the APS rate case that was approved by the Arizona Corporation Commission (ACC). Arizona has one of the most aggressive energy efficiency standards in the nation at 22% savings by 2020. These goals cannot by achieved without the LFCR or some other similar mechanism.

The LFCR allows APS to continue providing programs and services that help customers manage their monthly energy use, while also allowing APS to fund the operation and maintenance of the electric grid.

Whether a customer uses 1 or 1,000 kilowatt hours a month, reliable service requires a certain amount of infrastructure (wires, transformers and substations) built and maintained. However, a majority of the charges on a monthly electric bill are based on the amount of kilowatt hours a customer consumes and not on the infrastructure required to provide the service. The Lost Fixed Cost Recovery (LFCR) charge is adjustable rather than fixed.​

who is impacted by the lfcr?
All residential and small business customers are subject to lost fixed cost recovery. Large commercial and industrial customers have current rate structures which already include the recovery of fixed costs.
what do I need to do?
Unless a residential customer notifies APS and selects the Flat Charge Option, the LFCR automatically began appearing on bills in March 2013.
what is the difference between the two options?
The main difference is that the Flat Charge Option will remain constant or flat for the next four years. The LFCR will change from year-to-year based on the amount of APS’s lost sales.
what is the cost difference of the two options?
The projected total costs of the two options should be approximately the same at the end of four years. The table below shows the projected monthly LFCR costs for the first year only and the fixed Flat Charge Option monthly cost for all four years:
monthly usage
addition to customer account charge (flat charge option)
($ per month)*
lfcr variable charge
(0.9509% [0.009509])**
0-400 kWh​
401-800 kWh​
801-2000 kWh​
2001+ kWh​
*based on an average 30-day bill
**The percentage may change annually upon ACC approval.
how do the two options work?
The Flat Charge Option is a fixed amount based on your monthly energy usage (as shown in the table above). The amounts are set for four years, which is the period covered by the ACC approved rates.
The LFCR is calculated annually based on lost sales from measured and approved ACC programs for energy efficiency and customer-sited, non-APS owned renewable energy systems. APS will file results with the ACC each January; the ACC then sets the LFCR amount for the 12-month period (March-February). It is calculated as a percentage of your bill.
tax expense adjustor mechanism (team)
​​The Tax Expense Adjustor Mechanism (TEAM) a new adjustor that provides a reduction to customer bills based on recent changes to the federal corporate income tax rate.​