The Arizona Corporation Commission has given the green light to a Tucson Electric Power Company (TEP) energy supply deal with Humphrey’s Peak Power LLC. TEP is preparing to supply power to a proposed data center in Pima County, thanks to the 4-1 vote, casting Commissioner Rachel Walden as the only dissenting voice. In a recent meeting, the terms ensuring that regular customers don't foot the bill for this new development were laid out and approved, according to a statement on the Arizona Corporation Commission's website.
Commissioner Lea Márquez Peterson expressed the importance of the Commission’s approval, explaining the necessity to protect residential ratepayers from cost shifts as “vitally important to the region.” The deal includes provisions to safeguard TEP customers from the financial strain of building the infrastructure essential for the data center project. Walden’s dissent, however, was rooted in the belief that the contract's protections for existing customers were insufficient, advocating for longer-term agreements and upfront expenses for infrastructure needs, "not leave existing customers holding the bag," as she explained to the Arizona Corporation Commission.
This newly approved 10-year ESA mandates that Humphrey’s Peak Power LLC is financially accountable for all new infrastructure built specifically for its operations. Additionally, it spells out termination fees, minimum monthly billing requirements, and the gradual increase in the load over 18 months to ensure all TEP customers receive reliable service. Vice Chair Nick Myers stated, these measures should prevent other consumers from enduring additional expenses and contends that the addition of the data center should help to decrease transmission costs for others, as per the Arizona Corporation Commission.
A significant number of public opinions were heard during the Commission's Open Meeting, indicating the high level of community interest in the matter, as described in the Arizona Corporation Commission report. Commissioner Rene Lopez clarified the Commission's jurisdiction and addressed the public's concerns, affirming that the ESA would help guard the existing community against cost shifts and protect TEP from financial jeopardy. With Arizona anticipating a surge in load growth due to large energy users like data centers, Lopez also emphasized the critical nature of these types of special contracts for safeguarding grid reliability, safety, and affordability.
