An effort by Tucson Electric Power to raise its rate by 14% is facing a challenge from both the state’s top prosecutor and city leaders.
Arizona Attorney General Kris Mayes — who previously served on the Arizona Corporation Commission — called the move by the utility “blatant corporate greed,” in a news release announcing her office was going to intervene in the rate case.
“TEP’s parent company reported $1.6 billion in net earnings last year. This is a billion-dollar company that wants to increase the average Tucson consumer’s monthly bill by 14% following back-to-back rate hikes over the past five years. It’s time to say ‘enough,’” Mayes said in a news release.
“We’re watching a monopoly utility try to abuse the system. Tucson consumers cannot choose a different electric service provider unless they sell their house and move.”
Mayes also referenced an Arizona Daily Star October 2024 article, which found that, for TEP customers, residential rates have risen almost as fast, percentage-wise, in the three years between 2020 and 2023 as they did in the 22 years from 1998 through 2020.
“We cannot keep letting our monopoly utilities take advantage of ratepayers, who are already facing spiraling electricity bills and a cost-of-living crisis,” she said Thursday.
In June, TEP announced that it would be seeking a 14% rate increase for residential customers. On average, the increase would add about $16 per month — $192 per year — to electric bills for households with a median usage of 638 kilowatt-hours per month.
An effort by Tucson Electric Power to raise its residential rate by 14% is facing a challenge from both the state’s top prosecutor and Tucson City Council.
The announcement from TEP came just hours after the Pima County Board of Supervisors voted to approve and sell a 290-acre parcel of county-owned land for the massive data center complex known as Project Blue. The utility said at the time that filing for the rate increase results from the timeline associated with developing new rate proposals. TEP said it had nothing to do with Project Blue, a project rejected by the city, but is still being pursued.
Late Thursday, Erik Bakken, TEP’s senior vice president and chief administrative officer, said the Attorney General’s rhetoric is unproductive.
“Inflammatory rhetoric about a public, evidence-based regulatory proceeding is not constructive, particularly in this divisive political climate,” Bakken said in a statement. “Our employees are proud of the strong reliability and responsive service we provide, and we welcome thoughtful scrutiny of the investments we’ve made that are already supporting safe, reliable service for our community.”
TEP also noted that, in May 2024, the utility announced residential bills would be reduced by about $10 per month following temporary adjustments to the Demand Side Management surcharge and a reduction to the Purchased Power and Fuel Adjustment Charge (PPFAC). The utility also pointed to additional savings when it increased the PPFAC credit in April.
Meanwhile, the city council voted earlier this week to formally intervene in the rate case.
“Tucson ratepayers and businesses are already grappling with higher energy costs, including a 10% Tucson Electric Power rate hike in 2023,” Mayor Regina Romero said this week following the council’s vote.
“Additional hikes will strain working families, small businesses, seniors and other who are already struggling with affordability,” Romero said.
TEP’s rate case is currently under review by the Arizona Corporation Commission.
