Demand Side Management Charge

What is the Demand Side Management (DSM) charge?

The DSM charge is a monthly, usage-based charge established by the Arizona Corporation Commission (ACC) to pay for cost-effective energy efficiency programs.

These ACC-approved programs can help residential and commercial customers use less energy and save on their monthly electric bills. Energy efficiency benefits all TEP customers by postponing or avoiding the need to build new generating resources and reducing our reliance on fossil fuels, resulting in reduced air emissions and water usage.

The energy savings achieved through these programs help TEP work toward the goals in Arizona’s Energy Efficiency Standard, which calls on utilities to achieve cumulative energy savings of 22 percent by 2020

How does this affect my bill?

For residential customers, the current DSM rate is set at $0.002889 per kilowatt-hour (kWh) through May 2024. For a residential customer with average monthly usage of about 800 kWh, this will result in a monthly charge of about $2.31.

For commercial customers, the DSM rate through May 2024 is 2.8292 percent of the total monthly bill before other charges, assessments and taxes.

In May 2024, the Arizona Corporation Commission (ACC) approved a temporary reduction of the DSM surcharge to return unspent and uncommitted energy efficiency funds. This will result in an average monthly residential credit of about $5.60 in June and July 2024.

Where does the DSM charge appear on my monthly bill?

The DSM charge appears on your bill under the heading “Green Energy Charges.”

Do other utilities have charges like this?

Yes. Similar components are included in the electric rates of TEP’s sister company, UniSource Energy Services, as well as in rates charged by Arizona Public Service and many other utilities.

What kinds of energy efficiency programs are available?

Click here to learn more about home and commercial energy efficiency programs for TEP customers.