TEP, City Pursue Energy Collaboration Agreement

Working together to support shared community goals

Tucson Electric Power and the City of Tucson have drafted an Energy Collaboration Agreement that reflects a shared commitment to work together in service of the community we both support.

The agreement would establish a framework for collaboration focused on energy reliability, affordability, resilience, and long‑term community priorities. It is designed to strengthen coordination between the City and TEP while promoting energy‑related efforts that serve the needs of Tucson residents and businesses.

The agreement must be approved by the Tucson Mayor and City Council. Additionally, City of Tucson voters would need to approve a new franchise agreement between TEP and the City of Tucson before the agreement could take effect.

What Is the Energy Collaboration Agreement?

The agreement between TEP and the City of Tucson outlines how our organizations will work together on shared energy‑related priorities, creating a structure for collaboration, coordination, and ongoing communication. It recognizes that the energy landscape is evolving and is designed to be flexible and responsive over time as it is shaped by new technologies, changing regulations, and community expectations.

TEP and the City of Tucson serve the same community with infrastructure that often shares the same space, making it a priority that we work together to plan thoughtfully for the future.

By collaborating early and consistently, the City and TEP can:

• Coordinate planning and infrastructure work more efficiently
• Reduce unnecessary costs and disruptions
• Improve communication and transparency
• Better support economic development and neighborhood well‑being

This collaborative approach helps ensure that energy investments and community priorities move forward in a way that is practical, cost‑effective, and focused on the long‑term interests of Tucson residents.

The Energy Collaboration Agreement centers on several shared areas of focus:

• Reliable, affordable energy: Supporting policies that promote cost-effective construction and maintenance of TEP’s local energy grid.
• Community resilience: Strengthening preparedness for extreme heat and severe weather events.
• Clean energy progress: Advancing practical, cost‑effective clean energy solutions that support long‑term sustainability.
• Equity and customer support: Ensuring that energy programs and assistance resources are accessible to all customers – especially those who need them most.
• Workforce and economic opportunity: Supporting pathways to energy‑related careers and future workforce needs.
• Transparency and accountability: Providing regular updates on progress and collaboration efforts toward shared goals.

To support these efforts, TEP would provide annual contributions beginning at $2 million to the City for the 25-year duration of the agreement. The payments would increase by 2 percent every other year and would come from corporate resources, not customer rates.

For customers, the Energy Collaboration Agreement is about coordination and cooperation.

• It does not change who provides your electric service.
• It does not change how TEP is regulated.
• Rates, billing, and customer service remain the same.

TEP continues to be regulated by the Arizona Corporation Commission, which sets rates and oversees other aspects of our service. The agreement would not change that arrangement or grant the City authority over TEP’s operations, rates or service.

Proposed Agreement