The following is the opinion and analysis of the writer:
Proposition 412 is a 25-year extension to Tucson Electric Power’s existing franchise agreement with the city of Tucson. TEP is not coming out of pocket with a single penny to support renewables in Prop 412. You are, in the form of a 0.75% resiliency fee. Let’s be clear. They’re collecting those new dollars from customers, not dipping into their own revenues in support of investing more heavily in climate mitigation and decarbonizing efforts.
The fee you’ll be paying is estimated to yield roughly $4 million to $5 million per year. If TEP committed to even half of what you’re being charged the utility would be investing more than $50 million over the 25-year life of the franchise agreement. That would signal a serious partnership with the climate action initiatives the mayor and city council have identified.
For the first 10 years the new fee is being collected, 90% of it is earmarked for undergrounding utilities. The focus will be on assuring the city’s gateway corridor requirement for undergrounding new utilities is honored. That is an outcome I have advocated for since the new TEP transmission line project was introduced to the public more than three years ago. We must insist TEP honors the integrity of our local ordinances.
And yet our climate reality demands much more than the aesthetic of undergrounding new utility lines. A financial commitment from TEP to partner in that larger renewable energy conversation is what’s lacking in the extension of their franchise agreement.
Whether Prop 412 passes or fails, TEP will still have to go through what’s called a Special Exception process if they want to install new utility lines above ground on either our gateway or scenic corridors. Through the Special Exception process there are at a minimum three public hearings in which affected residents and businesses have a forum to make their voices heard. That requirement was adopted completely outside of the Prop 412 franchise agreement discussion. It stands if 412 passes, and it stands if 412 falls. Prop 412 is solely about TEP having their right to do work in public rights of way extended for another 25 years, with the new component of identifying a funding source for undergrounding utilities — and to a much less robust extent funding some of our climate initiatives.
TEP is legitimately concerned that their existing power supply system is old and is in need of upgrades. They have said if Prop 412 fails they will be forced to make $12 million in upgrades that they would otherwise not have to. But adopting 412 does nothing for the immediate need for upgrades. If TEP is concerned with their ability to provide uninterrupted service in the midtown area that issue isn’t solved by passing this proposition.
TEP says the Arizona Corporation Commission will not approve rate increases that are tied to undergrounding for aesthetic purposes. But the ACC will approve rate increases tied to increased investments into renewable energy sources. If TEP were to commit to half of what they’re asking of you to help with our resiliency goals, that roughly $2 million annually is a rounding error for the utility. But extended over the length of the agreement it would be an important piece of addressing the expansion of residential solar and the emergent need to get off from fossil fuels and onto renewable energy sources. That level of commitment does not exist in the current ballot language.
The existing TEP franchise agreement expires in 2026. If the extension fails in May it can be placed back on the ballot in either August or November of this year. Either date would give the city and the community time to meet and identify ways the utility can demonstrate a larger commitment to addressing extreme heat and how we safely provide electricity using renewable energy sources. That conversation will not affect the need to honor our gateway ordinance mandating undergrounding new utilities. And that conversation was truncated by rushing to the May election date.
TEP says if Prop 412 fails they “might not have this conversation again.” But all they’re doing through this ballot measure is agreeing to collect $4 million — $5 million from you annually and for the first 10 years spend 90% of it to comply with our existing city ordinances. That’s simply a cost of doing business, not a commitment to renewables.
The franchise agreement is a 25-year contract with the utility. The current proposal earmarks less than $500,000 annually for the first 10 years from the new fee for decarbonization and other climate actions. We can do better.
