Tucson residents may be asked to pay more on their electric bills in a city election to cover the cost for underground installation of a high-voltage transmission line through the city, to avoid a blight on key routes and historic neighborhoods.
The Tucson City Council is considering a new, 25-year franchise agreement with Tucson Electric Power that would raise the city franchise fee charged to TEP and passed through to customers on their bills, to help pay for “undergrounding” new transmission lines.
The increase in the franchise fee would raise the bill for the average home TEP customer in Tucson by an estimated 93 cents a month, or just over $11 per year, according to a memorandum discussed at the council’s study session Tuesday.
The proposed increase, part of a new city franchise agreement, would have to be approved by Tucson voters in an election that would likely be held next year.
The proposal, the result of ongoing talks between city officials and TEP, would increase the utility’s franchise, which is passed along to city residents on their TEP bills, by 0.75% to a new fee of 3% of TEP’s in-city revenues, according to the city memo.
Proceeds of the increase would be dedicated to funding to “undergrounding” parts of TEP’s proposed Kino to DeMoss Petrie transmission line, along with possibly funding renewable-energy and electric-vehicle projects and other city-backed climate-change initiatives in the future.
City elections are held in March, May, August or September, but Attorney Mike Rankin said the earliest possible date would be in May if the council formally called for the election at its last meeting in January.
The 138-kilovolt transmission line — suspended by 75- to 110-foot-tall poles — would run about seven miles from a substation at East 36th Street and South Kino Parkway to the DeMoss Petrie Generating Station, a gas-fired power plant just east of Interstate 10 north of West Grant Road.
But TEP withdrew its filing for approval by state regulators last year, after a city zoning officer denied a permit for a substation planned for the new line and the city and neighbors voiced objections.
Proposed routes for the line would partly run up North Campbell Avenue near some of Tucson’s historic neighborhoods, raising objections from city officials who say the line would violate bans on overhead power lines along designated gateway and scenic corridors and neighbors who say the line would create an eyesore and cut property values.
TEP said the new line is needed to upgrade power equipment to the University of Arizona and neighborhoods across the route to meet growing demand. But the utility has opposed requesting raising its overall rates to help pay for undergrounding the line, which it says will cost more than 10 times the cost of overhead lines, or up to about $60 million to bury six miles of line.
The dilemma has led to lengthy negotiations between city officials and TEP, which also held a series of public-comment meetings on the proposed project.
Leaders in historic neighborhoods including Sam Hughes, Jefferson Park and West University have formed a group called the Underground Coalition to advocate for installing the line underground to preserve views and property values.
After consulting with TEP, the city approved a new category of allowed special exceptions to city ordinances to allow overhead power lines in city-designated “scenic” and “gateway” corridors, in places like industrial zones.
But TEP has not submitted a list of segments of the line for which it may seek exceptions for overhead lines.
Answering a query from council member Steve Kozachik, a TEP official told the City Council on Tuesday that the company is waiting for the funding picture to become clear before laying out its plans.
“We are waiting to understand kind of what funding we might have to be able to move forward, before we go through the special-exceptions process and then the further process related to the substation, and then finally the process with the Arizona line-siting committee as well,” said Erik Bakken, TEP vice president for system operations and energy resources. “It’s important to understand kind of what those financing options are before we move forward with application through any of those processes.”
Bakken said TEP would like to move forward with the line as soon as possible, sometime in 2023.
TEP spokesman Joe Salkowski said the company has not come to a final agreement on any proposal on undergrounding the transmission line, but talks continue.
“We’re working together in hopes of reaching an agreement that both parties feel really good about, but we’re still in that process,” Salkowski said.
Kozachik, whose ward includes some historic neighborhoods potentially affected by the new transmission line, said he’s glad a proposal has been put forth “in the light of day.”
“These kinds of conversations have been happening behind closed doors,” he said. “I think it’s really healthy that the citizens have a chance to see the sausage being made; this is they who are going to be paying by extension the fee through their rates.”
Kozachik says he remains concerned about the “sanctity” of the city’s gateway and the scenic corridors ordinances, but the conversation has changed for the better.
“That is not to say that we’re still not threading a needle in terms of concern over state legislation and Corporation Commission coming in with a heavy hand,” he said. “But I believe we’ve got a good partner in that TEP is at the table now, and I think that you know the conversation has been productive to this point.”
Also applauding TEP’s collaboration, Mayor Regina Romero said she would like to see terms included in the new franchise agreement to support a mutual vision of a sustainable future, citing the city’s climate-change action initiatives.
The City Council declared a Climate Emergency in 2020, with a goal of the city becoming carbon-neutral by 2030.
“The franchise agreement creates an opportunity for us to negotiate the terms of the relationship that we want to expand with Tucson Electric Power and what we can do in terms of forward-thinking projects together,” Romero said. “I look forward to the ways in which we can work together with TEP to help support our climate action goals.”
Council member Paul Cunningham said he would like to see flexibility built into the new franchise agreement to anticipate new technologies and energy-distribution models, including such things as allowing homeowners associations to buy rooftop solar equipment at bulk and neighborhood power distribution.
Tucson Electric Power workers string lights in tall trees lining the streets of Winterhaven for the 73rd Winterhaven Festival of Lights. Cox Communications workers will finish the job. Video by Rick Wiley / Arizona Daily Star 2022
