A new report claims that federal policies have noticeably increased energy costs for Arizonans.
The Center for American Progress released the report today. It claims the Trump administration’s policies are partly to blame for the proposed rate increase sought by Tucson Electric (TEP) this year.
Lucero Marquez, a co-author of the analysis, said the rate increases proposed by TEP and Arizona Public Service were due in part to economic volatility placing pressure on company shareholders.
“We noticed that these two companies that we’ve mentioned in the report, in testimonies to the (Arizona Corporation Commission) have cited some of the Trump Administration policies as reasons why they may be needing more returns for their shareholders,” said Marquez.
In those testimonies, TEP officials cited tax cuts, immigration policy and tariffs as having created riskier and more costly conditions for investors. According to a testimonial from Ann E. Buckley of the Brattle Group, an economic consulting firm, TEP’s request for a higher return on equity (ROE) for its shareholders is due in part to those policies.
“Long-term interest rates remain elevated and are expected to continue to remain elevated as a result of inflationary policies such as tariffs, immigration policy, and tax cuts,” she said in the original rate increase proposal. “With higher expected interest rates, borrowing is more expensive which in turn raises the cost of capital. As a result, investors demand higher returns on equity, leading to an increase in the cost of equity.”
TEP said the White House’s policies were one of many factors playing into its proposed rate increase. The company’s spokesman Joe Barrios said that the increase in ROE was about attracting new capital.
“We have to remain competitive enough to attract that interest from investors,” he said. He also noted that TEP had lowered their proposed ROE from 10.5% to 9.75%, following guidance from the Arizona Corporation Commission.
The report also cited research from Energy Innovation, a climate-focused thinktank, showing that HR 1, or the One Big Beautiful Bill, projecting that Arizona households will pay roughly $140 more per year by 2030 due to fewer grid-expanding renewable energy projects. It should be noted that those are predictive rather than actual results.
The rate increase is still pending approval, with a public comment period set for November. If it goes through, users can expect to spend about 14 dollars more per month on electricity.
