On a cloudy Saturday afternoon, in the quiet Victorian neighborhood of Armory Park outside of downtown Tucson, a group of organizers went door-to-door to encourage local voters to oppose Proposition 421 this November.
If passed, the ballot initiative would renew a franchise agreement between the city and Tucson Electric Power for the next 25 years.
Lee Ziesche, a member of the Public Power for Tucson community coalition, spoke to one resident through a white screen door..
“Would you be interested in signing the pledge to vote no?” she asked.
Public Power for Tucson believes Tucson should pursue a public takeover of the city’s electric utility.
Ziesche said 25 years is too long and that the agreement ultimately benefits TEP, not ratepayers who are already concerned with how expensive their bills are.
“We’re also really concerned with TEP supporting data centers and what that is going to do to our bills,” Ziesche said.
TEP has been Tucson’s electricity provider for more than a century.
The proposed franchise agreement sets the rules for how the utility uses public rights-of-way, like streets and alleys, to operate.
“So that we can make repairs and then file the appropriate permits as we continue to work instead of stopping for an inspector to look at what we want to do and waiting for permits to be approved before we can start our work,” said JD Wallace, spokesman for the utility.
The agreement also includes a voluntary Energy Collaboration Agreement in which TEP would invest $2 million annually into energy affordability projects like bill assistance for low-income households, home retrofits to reduce energy use and electric vehicle charge infrastructure.
Wallace said the funds come out of TEP’s corporate resources and not ratepayer funds, and would increase by 2% each year, totaling about $64 million.
But opponents of the measure say the utility isn’t doing enough to mitigate the burden on ratepayers.
“It’s a very small bribe compared to the millions and millions and millions that they extra from this community in profit,” Ziesche said.
TEP’s Canadian parent company, Fortis, reported a $1.2 billion profit last year.
Wallace said the utility has been investing more in the electric grid than customer revenues cover.
“In 2025, TEP reinvested all earnings back into our system. TEP paid no dividends during the year and shareholders provided additional capital to help fund infrastructure investments. In this way, investors joined customers in funding improvements to our local energy grid,” he said.
According to the company’s 2025 annual report filed with the Securities and Exchange Commission, TEP spent a total of $828 million to maintain and expand its electricity infrastructure and replace aging equipment.
Wallace says ratepayers covered $539 million of those expenses and the other $289 million was covered by investors.
A 5% tax will still show up on customers’ bills no matter what
The franchise agreement includes the same 2.25% franchise fee that takes out about three dollars in the average customers’ bill and is remitted to the city of Tucson.
There’s also a 2.75% public utility tax that takes out about $4.
“It is our one chance, as community members, to kind of say how we feel about how TEP does business, right?”Lee Ziesche, Public Power for Tucson
“Whether you vote yes or vote no, whether Proposition 421 passes or fails, there is still an overall 5% tax on customers’ bills,” Wallace said.
The electric utility provider will continue to provide service within the city even if the franchise agreement is rejected.
But TEP cautions that if the agreement is rejected, individual work permits could take longer to approve, routine repairs and upgrades would cost more, outage response could be slowed and that reliable service would be harder to maintain.
They’re also warning that higher costs could lead to higher future rates.
“All of those costs are then reflected in the next rate application because a project that was going to cost one smaller amount of money right now, might have increased by so much,” Wallace said.
Last year TEP applied for a 14% rate increase through the Arizona Corporation Commission, the state’s utility regulator. A judge overseeing the rate case recently recommended a rate increase of 11.2% and supports the utility’s request for an Annual Rate Adjustment Mechanism which would update rates every year.
Ziesche understands that Proposition 421 doesn’t directly impact rates.
“It is our one chance, as community members, to kind of say how we feel about how TEP does business, right?” Ziesche said.
Tucson voters like Lauren Breckenridge say they’re supportive of TEP’s potential climate investments but are still unsure about whether those commitments will actually be made.
“I don’t know who to trust. It’s just kind of one of those things where I feel like I know a little bit about both sides but not enough to have, like, a fully formed opinion,” Breckenridge said.
TEP for Tucson
Campaign finance filings show TEP invested $4.3 million into its PAC, TEP for Tucson.
In September, the Tucson Agenda reported the political action committee TEP for Tucson, which is funded by the utility, spent about $14,000 to pay for 59 arguments in favor of its proposition in Tucson’s election pamphlet.
About half those arguments in support came from TEP employees, as well as local elected officials like Tucson city councilmember Selina Barajas and Pima County Supervisor Andres Cano.
Mayor Regina Romero, Vice Mayor Lane Santa Cruz, council member Kevin Dahl and Pima County Supervisor Jen Allen also submitted arguments in favor of the franchise agreement, but paid the $240 fee themselves.
The Tucson Agenda also reported that the PAC reserved nearly $1.5 million in television ads according to records filed with the Federal Communications Commission.
Back in Armory Park, Ziesche says she thinks the City of Tucson will become financially dependent on TEP – and if that happens, the city won’t want to move forward in any way towards public power.
“So then maybe we have to figure out if we have to get it on the ballot ourselves,” Ziesche added.
