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A Low Electric Bill, Guaranteed

TEPC lures customers by guaranteeing them a low electric bill for heating and cooling.

An electric utility in Arizona is betting it can turn new-home buyers into electricity customers by offering a written guarantee of a rock-bottom electric bill for heating and cooling costs. To ensure that a new house uses a bare minimum of electricity for heating and cooling, Tucson Electric Power Co. (TEPC) works with builders to design the home and its heating and cooling system. It then inspects the home during the construction process to ensure that it is built as designed. Furthermore, the utility offers reduced electrical rates if the homeowners use power during off-peak periods or have a solar water heater installed.

The house shown, for example, is guaranteed to use no more than 82 cents' worth of electricity per day for heating and cooling. How does the utility separate the heating-cooling costs from other uses for electricity? It establishes a baseline that considers typical electrical needs and the house's size, says Wendy Erica Werden, marketing communication coordinator for TEPC. The company knows what to expect in terms of electrical needs because the Tucson climate is such that essentially no electricity is required for heating and cooling twice a year: during November and April, Werden says. Once a baseline is established for the building, the company knows that all other electrical power that is used is for heating and cooling. Werden says that of the 800 houses built in the program, the power company has had two instances in which homeowners challenged their electric bills, saying that the house was using more power than was guaranteed. Upon further investigation, the power company learned that one house had a faulty heat pump, and in the other case, the house used about $4 more electricity than was guaranteed. After three years, homeowners can shop for a different electric power provider.

The guarantee is in effect for three years and homeowners are prohibited from making major, energy-consuming alterations during that time. After three years, homeowners can shop for a different electrical power provider.

Prompted by Deregulation