The following is the opinion and analysis of the writer:
The year 2025 was marked by erosion of public trust in technology, public institutions and government. In Pima County, Project Blue has done more than any new development in recent memory to highlight that erosion of public trust — not only in foundational institutions but also in local economic development efforts and our local electric utility.
TEP’s 2023 Integrated Resource Plan is just over two years old, yet its projections of new generation requirements totally missed the mark. One project alone, Project Blue, would consume 68% of the IRP’s projected new generation requirement.
The editorials from TEP do little to assuage concerns that residential customers won’t, in part, bear the burden of new generation, transmission infrastructure and O&M costs required to support Project Blue.
TEP’s attempts at transparency were feeble. Trust requires outreach, dialogue and transparency, not lectures or deflection. Trust in TEP has been severely eroded by their management’s enthusiastic, blinkered pursuit of Project Blue.
Negotiation of massive, resource-intensive developments shrouded in the secrecy of non-disclosure agreements are not in the public interest, particularly when those developments seek to socialize their costs of operations. Details of the Project Blue development were not disclosed until mid-2025, and the public outcry was immediate.
To its credit, the Tucson City Council took notice, listened to public concerns and responded. The Council voted against the annexation of the Project Blue site and got educated about NDAs. Water was the primary issue — water that Tucson Water may one day serve to augment its potable water supply. Water has also become Project Blue’s issue and is reported to have cost Beale Infrastructure its future tenant, Amazon Web Services. The Council has further responded by intervening in TEP’s rate increase case and requested rehearing of the Arizona Corporation Commission's decision to approve TEP’s ESA with Project Blue.
As the outcry surrounding Project Blue mounted, the Pima County Board of Supervisors scrambled to understand what they signed. Board comments regarding the content of the NDA did not inspire confidence. Supervisors declared that the timing of their vote, combined with TEP’s requested rate increase, “looked bad”, or the need to look at the “four corners” of the agreement, or simply, not knowing what was in the agreement. To be fair, four Board members voted to adopt a new policy limiting the duration and scope of NDAs, and two thought it was prudent to slow down and voted against the advancement of Project Blue. Sadly, the Board majority voted to proceed with Project Blue.
Today, the County’s Project Blue FAQ website reads like a Chamber of Commerce promo, and it’s dominated by a full-throated defense of NDAs. One ironic passage in justification of the NDA jumps out “… it is part of managing expectations, in that they also often do not want to get communities that may be under consideration unduly excited…” How well did that work out?
If it weren't for the Residential Utility Consumer Office and Attorney General Kris Mayes’ check on the ACC, the Commission’s mandate to establish “just and reasonable rates” for electric utilities would be heavily distorted in favor of utility companies at the expense of ratepayers.
The General Rate Case process has historically been a data-driven, transparent process requiring evidentiary hearings, audits of utility finances, and cross- examinations to justify rate increases. It’s the cost of operating a monopoly, and utilities hate the process. In 2024, the ACC voted to approve a Formula Rate Policy that allows utilities to gin up a formula to fast-track rate hikes, adjust rates annually and skip the General Rate Case Process — basically rate-case speed dating. An Arizona Appellate Court panel put the brakes on the idea and remanded the case to the Superior Court to untangle the policy versus rulemaking issues. Likewise, Attorney General Kris Mayes slipped the proverbial broom handle in the spokes of the approval of TEP’s hasty Project Blue request, calling out a number of irregularities in process and law. A board of ACC Commissioners beholden to ratepayers would be a nice change in November. It might help restore some trust in our institutions.
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