Tucson Electric Power is facing a minefield of potential legal challenges to its controversial plan to run high-voltage transmission lines overhead through midtown, judging from the latest hearings before a state line-siting panel that must approve a final route.
The Arizona Power Plant and Transmission Line Siting Committee on Wednesday wrapped up a week and a half of hearings in Tucson on TEP’s Midtown Reliability Project, which proposes to run high-voltage power lines from a substation on the south side through midtown to a substation on West Grant Road at Interstate 10.
TEP’s preferred route for the line avoids so-called gateway corridor zones, most notably along North Campbell Avenue, where the city has banned overhead lines.
But the route would traverse or run adjacent to several historic neighborhoods and areas subject to city area and neighborhood plans that could also restrict overhead power lines, and TEP may face lawsuits to compensate residents for a loss of property values resulting from the visual blight of overhead lines.
Backed by a recent court decision, the city says it will continue to defend its ordinances restricting overhead lines along key corridors, in the face of possible appeals by TEP.
And while Banner-University Medical Center supports TEP’s preferred route, it says it would challenge any plan to run overhead lines in front of the hospital along North Campbell or along its northern campus access road.
“The shortest path to getting this project done is for TEP to stop fighting local laws,” Daniel Dempsey, a director of the nonprofit Underground Arizona, said during the second week of line-siting hearings.
The group is supported by the Tucson Underground Coalition, a group of about a dozen neighborhood associations opposing any installation of overhead high-voltage lines in residential areas.
“The city cannot simply stop enforcing its laws because TEP does not like them,” said Dempsey, who presented his case Wednesday before the line panel at the Doubletree by Hilton-Reid Park. “In some of these areas, there are four or five layers of challenges that TEP may need to overcome.”
Need vs. cost
TEP says the planned 138-kilovolt transmission line from the south side to a substation near I-10 and West Grant Road, originally proposed in 2020, is badly needed to meet surging power demand as midtown’s current 46-kV transmission system in the central Tucson area was built in the 1950s and 1960s and is nearing capacity.
The company says it must complete the transmission project, which includes the planned removal or undergrounding of some 19 miles of existing lower-voltage distribution lines, by mid-2027 to assure safe and reliable service in the area.
Without approval of the new line, TEP says it will have to spend some $10 million to shore up the existing, 46kV “sub-transmission” system that serves midtown.
But TEP has opposed installing any part of the line underground, citing costs of up to 10 to 20 times the cost of overhead lines.
TEP first filed for state approval of a route using overhead lines in 2021, after several years of planning.
After being rebuffed by the city for needed zoning approvals and facing a firestorm of opposition from neighborhood groups, the company withdrew its original application in 2022 while it negotiated with the city and other stakeholders.
In May 2023, Tucson voters handily rejected a ballot proposition to extend TEP’s city franchise agreement and add a new fee to cover the cost of underground transmission lines that would have set back residents about $1 a month on average.
Cost finding sought
In its latest application, TEP asks the 11-member line-siting committee to approve its entire preferred route with overhead lines, and to make a legal finding that the cost of undergrounding the line is “excessive, particularly in light of the fact that the benefits are primarily aesthetic.”
The committee will make a recommendation on a line route to the Arizona Corporation Commission for final revision and approval.
TEP also asks the line-siting panel to find that the city’s requirement for undergrounding transmission lines is “unreasonably restrictive and compliance therewith is not feasible in view of technology available” — language in the state’s line-siting law that can justify a narrow exemption from local laws.
“The city and TEP agree there are always things we have to work out, but this committee has the authority under state law and we are asking you to exercise that in a very specific circumstance,” TEP attorney Megan Hill told the committee during Wednesday’s hearing.
Committee member Dave Richins of Mesa said TEP and the city need to reach an understanding on the transmission line, preferably as part of TEP’s franchise agreement.
“I feel like you’ve put the Line Siting Committee between the relationship of TEP and the City of Tucson, to specifically have somebody to blame in court, and it feels very uncomfortable,” Richins said.
TEP also cites a policy statement adopted by the Corporation at the behest of TEP and other state-regulated power companies that utilities should generally avoid the higher cost of undergrounding lines except where needed for safety or reliability or “to satisfy other prudent operational needs.”
Undergrounding costs hit
In his presentation earlier in the week, Underground Arizona’s Dempsey said TEP must follow local laws where undergrounding transmission lines are required, and he questioned TEP’s cost estimates as too high.
In his presentation and filings, Dempsey cited past Arizona court decisions, including a 1980 Arizona Supreme Court decision upholding the right of Paradise Valley to require underground power lines, and a Pima County Superior Court judge’s decision last week upholding Tucson’s undergrounding ordinance amid a challenge from TEP.
Dempsey, who holds a degree in economics and worked as an investment analyst for Citigroup in New York, challenged TEP’s assertions that installing the transmission line underground would be prohibitively expensive, citing several projects by other Arizona utilities in recent years.
TEP, which has been planning a midtown system upgrade since 2007, says the cost of installing the lines underground is prohibitive, at an estimated 10 to 20 times the cost of overhead lines — about $15 to $26 million per mile compared with about $1.2 million per mile for overhead lines.
But Dempsey contends that TEP has inflated its undergrounding cost estimate, which it has raised since its initial filing.
He cited several other underground transmission projects in Arizona since 2018 that cost much less, including an Arizona Public Service Co. project to replace existing underground lines in downtown Phoenix and a project by Salt River Project, a self-regulated power and water utility, to extend transmission lines to Intel’s new semiconductor plant in Chandler.
But Meghan Grabel, an outside attorney for TEP, said Dempsey’s analysis was flawed and those projects are “apples to oranges” compared with TEP’s project and that not all costs were included for the Chandler project.
Jason Jocham, an engineer with Sargent & Lundy in Phoenix who prepared a cost analysis for TEP, said the APS project cost much less than a full underground line installation because the utility was simply replacing the wire conductors and inspecting existing conduit.
TEP also contends Dempsey’s cost estimates are flawed because he compared many projects with 69kV line, which costs less than 138-kV lines.
Undergrounding also can save on right-of-way costs because overhead lines require a wider buffer zone from structures, and after installation they may cost less for maintenance because they are not prone to wind and storm damage, further narrowing the cost gap with overhead lines, Dempsey said.
Dempsey also challenged TEP’s position that the extra cost of undergrounding in rates shouldn’t be added to customer rates.
He noted that independent Salt River Project has a special “Municipal Aesthetics Fund” that helps cities pay the extra cost of undergrounding, with a budget of $18 million this fiscal year.
Chandler is using some of that SRP money to pay for the extra cost of undergrounding the roughly three miles of line, Dempsey said, though the amount was disputed at the hearing.
City line ban
During the city’s presentation earlier in the week, Mark Castro, principal planner for the City of Tucson, detailed how overhead transmission lines are prohibited in zones along designated gateway corridors, which include North Campbell Avenue and North Oracle Road, or city-designated scenic corridors including parts of Silverbell Road.
TEP’s preferred route for the transmission line, identified as “B4” in project materials, connects the DeMoss-Petrie Substation near Interstate 10 and East Grant Road to the proposed Vine Substation near Banner – UMC via Grant, North Park Avenue, East Adams Street and North Vine Avenue.
The route connects the Vine Substation to the Kino Substation at South Kino Parkway and East 36th Street using Vine, Adams and Park before turning west on East Speedway and then south on South Euclid Avenue. After crossing Barraza Aviation Highway, the route continues on South Toole Avenue, Euclid and 36th Street.
To run a line in a gateway or scenic corridor zone, or to cross such a zone, utilities must apply to the city for a “special exception.”
After negotiations with TEP, the city in 2022 added transmission lines to the existing list of utility projects that could qualify for special exceptions.
TEP has said it plans to file for special exceptions where needed to cross gateway zones perpendicularly.
All proposed routes would cross Oracle and Broadway, but TEP’s preferred route would not cross or run parallel to North Campbell.
Applicants can also seek variances before the city’s Board of Adjustment, which also hears appeals of zoning decisions.
TEP unsuccessfully appealed to that board after a zoning administrator determined the utility’s plans were subject to the gateway corridor zone along Campbell.
The utility filed a court appeal, but last week, a Pima County Superior Court judge upheld the city’s authority to prohibit overhead transmission lines in gateway corridors.
There also are potential legal hurdles to routes in certain neighborhoods — notably Sam Hughes and West University — that are subject to special neighborhood and area plans.
A city overlay plan, the University Area Plan, provides development guidelines for several overlapping neighborhoods at the north end of the transmission line where it would extend to and from the planned Vine Substation near the northwest corner of the Banner campus.
That area governed by that plan is bounded by Broadway on the south, Country Club Road on the east, Grant Road on the north, Stone Avenue on the west, and Toole Avenue on the southwest.
The city plan for the area includes general guidelines including “Wherever possible, place utility and service equipment underground or in other visually screened locations.”
Beyond the gateway corridor ordinance and the University Area Plan, TEP says it doesn’t believe overhead lines would violate any existing requirements in any historic preservation districts or neighborhood plans.
Hospital concerns
An official of Banner-UMC said the hospital supports TEP’s preferred route and strongly opposes installing overhead lines on proposed routes that would run along Ring Road on the hospitals north side, or along North Campbell in front of the hospital’s east side.
Mark Barkenbush, vice president of facilities for Banner said a line on Campbell could pose a hazard to a grassy detention basin at the corner of Ring Road and Campbell that is designated as an emergency helicopter landing site should the two elevators that serve the two helipads stop working.
The hospital is also concerned about noise and disruption to hospital operations amid an undergrounding project, while several proposed routes would ruin stunning views of the Santa Catalina Mountains on the hospital’s north side, he said.
Barkenbush said the hospital would likely challenge condemnation proceedings in court if TEP tried to use available eminent-domain rights for public works projects in state law.
