Arizona Attorney General Kris Mayes addressed about 100 Tucson residents Tuesday, at a town hall about Tucson Electric Power’s proposal to raise residential consumer rates by 14%.
The utility company submitted its rate hike proposal to the Arizona Corporation Commission – the state’s utility regulator – last summer, and has stated that the rate increase is intended to recoup its investments made into the grid and is below the 2021 inflation rate.
Mayes isn’t convinced. She says her office will be presenting evidence during a March hearing in Tucson, arguing against this increase.
“We will be arguing that a company that is making hundreds and hundreds of million dollars in profit should not be asking for its third rate increase in a row and certainly not 14%,” she said.
TEP is owned by Fortis Inc. which reported net earnings of $1.6 billion in 2024.
During a presentation, Mayes said that if the request is approved, TEP would collect about $172 million more per year and that most households would see about a 13-14% increase reflected on their bills depending on energy usage.
“If TEP’s requested rate hike is approved, Tucson customers will likely pay an extra $19.43 per month for electricity beginning next year,” Mayes said.
The last time TEP increased rates was in 2023, by 10%, and in 2021, by 6%.
TEP spokesperson Joe Barrios said that TEP has also decreased its rates over the last three years.
“As a result of [the] decrease in the cost of fuel and in the cost of purchase power that we buy to satisfy peak energy needs,” he said.
Barrios said that there was an estimated $4 decrease last year and about $10 decrease the year before.
“We just want customers to be aware of that,” he said.
Mayes’ office is also requesting that the Commission undo its decision to approve an energy service agreement between TEP and the developers of Project Blue – a data center in Pima County.
She has called the agreement a secret deal because a portion of the agreement is redacted.
“The second thing that they did is that they essentially put in a provision that we call ‘choose your own rate’ that essentially allows TEP to, at some future date, negotiate with the data center company, a new rate outside of the supervision of the Corporation Commission,” Mayes said.
Prior to the townhall, TEP published a news release stating that it guarantees protections for consumers and does not allow rates to be established without approval from the utility regulator.
Barrios told AZPM, “If the customer were to consider going on a different rate, that is still something that would have to be reviewed and approved by the Arizona Corporation Commission as all of our rates.”
Mayes expressed her concerns for those struggling with affordability and said that she was worried that more people will have to choose between paying their electric bill and feeding their families or taking medications.
“When you throw on top of that a proposed 14% rate increase, which follows two prior rate increases, it’s just too much,” she said.
Jerry Holmes said, “14% rate increase to someone that has a fixed income, being a retiree, that’s a big increase and it will impact my household income and flexibility.”
Soleste Lupu, a small business owner, echoed that sentiment, “[TEP] is coming from a point of abundance, $20 a month. It’s not $20 a month, it’s $20 based on the amount of your bill,” she said. “I’m tired of not having a voice when you are struggling with survival.”
Stephen Menke, expressed interest in the possibility of a publicly owned utility, “Where we could then choose to generate more of it through solar and wind instead of being held hostage to what TEP has scheduled which to my mind, is not very future oriented.”
Mayes encouraged TEP customers to submit comments and speak at several upcoming public meetings regarding the rate case in March and April in downtown Tucson, at the State of Arizona Building at 400 W Congress St.
The meeting dates are:
- Thursday, March 19, from 5:30 to 8 p.m. Public comment is only permitted telephonically, Mayes' office says.
- Monday, March 23, from 10 a.m. to 12:30 p.m. Public comment can be made in person or telephonically.
- Wednesday, April 1, from 5:30 p.m. to 8 p.m. Public comment can be made in person or telephonically.
- Tuesday, April 7, from 5:30 p.m. to 8 p.m. Public comment can only be made telephonically, Mayes' office says.
- Wednesday, April 22, at 10 a.m., prior to the beginning of the first day of the hearing. Comments can be made in person or telephonically.
The Attorney General's Office said for telephonic comments during the meetings, call 1-877-309-3457 and use the passcode 246011833204##.
