TUCSON, Ariz. (KGUN) — Tucson Electric Power is asking the Arizona Corporation Commission for about a 14% base rate increase, which would raise the average residential bill by up to $20 per month.
This proposed rate increase comes as the City of Tucson is exploring the possibility of a city-operated utility company.
“We already have a municipal utility in Tucson. It’s Tucson Water and we find that it’s very efficient. The bills are affordable,” Benjamin Mohler, a member of Tucson Democratic Socialists of America said.
The City of Tucson commissioned a feasibility study by GDS Associates last year. The study said a public power utility has promising outcomes, including lower rates.
“Climate forecasts show that things are only going to get hotter and that means that electricity bills are going to continue to go up as people are needing to turn the AC on earlier and earlier in the year,” Mohler said. “They are going to keep asking for us to both pay for these upgrades to the grid and pay for their corporate profits and we can’t afford that.”
However, the city’s study said the city would need a lot of upfront capital for TEP’s assets.
TEP spokesman Joe Barrios said the impact of the rate increase would be manageable.
“The impact to customers, even at 14% would be less than the rate of inflation since our last rate change,” Barrios said.
A study done by the Brattle Group for TEP said the City acquiring TEP’s local energy grid would cost taxpayers more than $4 billion and increase electric bills in the city by $5.8 billion over 20 years. The study said additional costs would go from an extra $162 per year per customer in the first year to an extra $900 per year per customer after 20 years.
“So while it sounds appealing that their bill would actually go down, again, the concern was it would actually go up,” Barrios said.
Barrios said the city’s study also did not consider new infrastructure the city would need. TEP said more expenses could hurt reliability.
“Having a control center like that, having these additional substations and other physical improvements that would have to be made, they were not considered by the study,” Barrios said.
TEP’s study also said a city takeover means less money for clean energy investments. Barrios said the city is already developing a proposed energy collaboration agreement. Through the agreement, TEP, he said, would give the city about $56 million over the course of 25 years through shareholder dollars and not taxpayer dollars.
“So that we can both reach our energy-related goals and move forward in a way that’s efficient and provides ultimately better service to city residents,” Barrios said.
Meanwhile, Mohler argues other cities like Austin and Los Angeles already operate their own power.
“Public power is a tried and trued method,” Mohler said.
If the city were to go forward, their study said there would probably be a legal battle between them and TEP that could last at least 10 years because TEP isn’t willing to sell their infrastructure. Next month, the city’s mayor and city council are considering both a franchise agreement with TEP and the energy collaboration agreement.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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Andrew Christiansen is a reporter for KGUN 9. Before joining the team, Andrew reported in Corpus Christi, Texas for KRIS6 News, Action 10 News and guest reported in Spanish for Telemundo Corpus Christi. Share your story ideas with Andrew by emailing andrew.christiansen@kgun9.com or by connecting on Facebook, or Twitter.
