Tucson Electric Power customers may be seeing a monthly bill increase by about $3 instead of a proposed $11.
That's under a preliminary settlement in TEP's pending rate case.
The Arizona Daily Star says Tucson Electric's rates have been capped since the last rate case in 2008.
The company filed for a rate increase in July, saying it needs higher rates to cover costs that have risen even as customer growth and demand have flattened.
Hearings on TEP's rate case are scheduled for March before an administrative judge, who will make a recommendation to the Arizona Corporation Commission.
The five-member panel oversees the state's utility companies.
The commission is expected to consider and vote on TEP's rate plan in June.
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