Our customers deserve honest, accurate information about decisions that affect their energy future. Recent statements by those attacking Tucson Electric Power’s agreement to serve Project Blue are false and at the very least misleading.
Facts matter, and the public deserves clarity.
Claim: The agreement creates a “loophole” allowing TEP and the customer to secretly set electricity rates outside Commission oversight.
Fact: The implication that we can set secret rates in a back room without approval from the Arizona Corporation Commission (ACC) is patently false. The project will pay for service under TEP’s ACC‑approved tariff for customers served at the utility’s highest retail voltage.
- No customer sets their own rate.
- No deviation from Commission‑approved tariffs is allowed without ACC authorization.
- Any future tariff change must go through the same public ACC approval process used for all customers.
Neither TEP nor the customer can create or apply an unapproved rate. Arizona law prohibits it. Arizona law requires any new tariff proposal to be reviewed and approved by the ACC. Such a review ensures no hidden cost shifts to other customers. The contract also makes clear that all terms, conditions, and obligations for both TEP and the data center developer are governed by Arizona law. In short, the idea that an unapproved rate could be used simply has no grounding in fact.
Claim: The agreement puts other customers at risk of higher costs.
Fact: The agreement was created specifically to add more consumer protections than required — not fewer. In truth, no separate agreement was required at all. The customer could have simply taken service under an existing tariff approved by the ACC with no additional conditions.
The sole reason the agreement exists is because TEP proactively added extra guardrails beyond what standard tariffs provide. These protections ensure other customers are insulated from financial risk.
Key safeguards include:
- Minimum monthly billing payments regardless of energy use
- Termination fees backed by financial security
- Credit requirements to protect against default
- Full‑cost service under a tariff designed to recover the total cost of delivering energy
Large industrial customers like the proposed data center help keep rates stable by spreading fixed system costs across more kilowatt‑hours providing affordability benefits for all customers.
Claim: The agreement was not transparent and bypassed public review.
Fact: TEP filed the agreement with the ACC on their public website on Aug. 25, 2025. The ACC reviewed and approved the agreement in a public meeting on Dec. 3, 2025, following an open, transparent process with full scrutiny. TEP representatives were extensively questioned on a variety of topics for more than three hours during the public open meeting.
Leading up to the public hearing, Commissioners asked numerous questions about the agreement and detailed written responses to questions from Vice Chair Myers, and Commissioners Marquez Petersen and Walden were filed in the docket.
The Commission and its staff followed their typical public and transparent review of the energy supply agreement.
Claim: The agreement threatens grid reliability.
Fact: TEP conducted extensive reliability and system‑impact analyses before submitting the agreement. Read more here. The ACC reviewed this information prior to approval. Nothing in the public record supports the claim that serving the data center will harm grid reliability.
Public dialogue is healthy, but it must be grounded in accurate information.
TEP’s mission is simple: to provide safe, reliable, affordable energy for every customer. This agreement supports that mission and reflects the transparency and accountability our community expects. We remain committed to upholding the public’s trust in every decision we make.
Erik Bakken is President of Tucson Electric Power.
