TUCSON, Ariz. (KGUN) — The contentious saga that is Project Blue — a massive planned data-center campus in the Tucson area — has taken a new turn.
The Arizona Corporation Commission recently approved an energy-supply agreement between Tucson Electric Power and the company behind Project Blue, even as critics remain skeptical of the deal’s protection of everyday ratepayers.
On Wednesday, the commission approved a deal that TEP says will allow the company behind Project Blue to draw power under the terms of a contract that keeps customer rates unchanged.
According to TEP, the agreement ensures existing customers “pay their own way and pay for their service.”
Spokesman Joe Barrios outlined the utility's view on the deal. “Basically the agreement outlines a number of protections that ensure other customers won’t be subsidizing or paying for service to this project,” he said.
Barrios also acknowledged the utility understands why critics remain wary.
“But very clearly the agreement is designed to make sure that they pay their own way and pay for their service,” he said.
Still, opponents of the project maintain deep reservations. Among them is Derrick Espadas, a member of the group No Desert Data Center and a candidate in next year’s Arizona Corporation Commission race. “It’s not so much the data center, it’s not so much what’s being proposed. It’s that it was a horrible contract,” Espadas said.
He further charged: “They give the community another answer, they give the Board of Supervisors another answer. So there’s all these narratives going on and none of them match up. And for me, that’s where a lot of my resistance to TEP comes from.”
Espadas reiterated his distrust of the process, saying: “The repetition of ‘just trust us, why can’t you just trust us?’ And it’s like, that’s exactly why we can’t trust you.”
At issue is the 290-acre campus located just north of the Pima County Fairgrounds in the Southeast Employment & Logistics Center, expected to generate some $3.6 billion in investment, create thousands of construction jobs and hundreds of permanent positions.
The data-center would require up to 600 megawatts of power when fully built out, according to TEP's estimates, making it the utility’s largest customer.
Concerns have centered on whether utility customers and the broader community will bear hidden costs — for example through increased fixed-system costs or weaker grid reliability. TEP says the agreement provides for a gradual ramp-up in energy use and that the first phase can be served with existing resources including solar and battery storage.
Despite the city council’s unanimous rejection of annexation for the project earlier this year, the development appears to be moving ahead via the county and the utility deal. The next major hurdle: regulatory approval of TEP’s full supply contract and public review of its impacts. City attorneys have asked the commission to open a formal hearing, citing questions about the deal’s effect on ratepayers.
As Tucson watches, the data-center project stands at the crossroads of economic opportunity and community trust. Whether the protections promised by TEP and the developers will satisfy critics remains to be seen.
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Eddie Celaya is a multimedia journalist at KGUN 9. Born in Tucson and raised in the Phoenix area, Eddie is a life-long Arizonan and graduate of the University of Arizona who loves the desert and mountains and hates the cold. Previously, Eddie worked in print media at the Arizona Daily Star. Share your story ideas with Eddie at edward.celaya@kgun9.com, or by connecting on Facebook or Instagram.
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