Tucson Voters To Decide Fate Of Power Control With Proposition 412

April 22, 2023

By Daniel Stefanski |

Tucson voters will be receiving their ballots in the coming days for an upcoming special election, and the single proposition for their consideration is drawing passionate arguments from both supporters and opponents.

Proposition 412 would grant “a franchise to Tucson Electric Power (TEP) Company for the purpose of providing electric transmission and distribution services within the City of Tucson for which the City of Tucson will receive a franchise fee and other consideration.” The “other consideration” comes, in part, in the form of a “Community Resilience Fee” that will fund Tucson’s Climate Action and Adaption Plan, which is an effort to achieve “carbon neutrality for City operations by 2030.” If Tucson voters were to approve the proposition, the agreement would continue until June 1, 2048. (The current agreement ends April 2026.)

Tucson’s Democrat Mayor, Regina Romero, has endorsed Proposition 412, stating, “Please join me in voting YES on Prop 412. Tucson Electric Power is a valued partner in our community’s efforts to fight climate change, and Prop 412 will provide critical support for the City of Tucson’s Climate Action and Adaptation Plan. Prop 412 extends TEP’s service agreement for another 25 years with citizen oversight and opportunities to revise. Cleaner, greener and more resilient power for Tucson is important to all of us. Prop 412 is a smart investment in creating resiliency for Tucson.”

Joining Mayor Romero in support of Proposition 412 are Senator Rosanna Gabaldón and Representatives Andres Cano, Stephanie Stahl Hamilton, Consuelo Hernandez, and Chris Mathis – among others.

One of the main issues causing contention over this proposal is the insertion of a community resilience fee of 0.75% of all applicable revenues of TEP – in addition to the 2.25% Franchise Fee. This new fee would be collected and disbursed for “funding costs associated with the underground installation of new TEP Facilities or conversion to underground of existing TEP facilities currently installed overhead; and projects that support the City’s implementation of the City’s approved Climate Action and Adaption Plan.” Surprisingly, the fee has picked up opposition from both sides of the political aisle.

Steve Kozachik, a Democrat Tucson Councilman, recently wrote an opinion piece for the Arizona Daily Star, arguing that “we can do better than Prop 412.” He states that “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.”

Councilman Kozachik argued that “for the first 10 years the new fee is being collected, 90% of it is earmarked for undergrounding utilities….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.” Kozachik suggested that it may not be such a bad thing for this extension to fall short of voter approval in the upcoming election as “it can be placed back on the ballot in either August or November.” He writes that “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.”

On the other end of the political spectrum, the Pima County Republican Party urged voters to reject Proposition 412, stating, “There will be a special election May 16, 2023, where the voters will decide if they want to raise their Tucson Electric Power rates to remove some poles and somehow reduce climate change by throwing money at Tucson’s Climate Action Plan.”

Kevin Thompson, a Republican member of the Arizona Corporation Commission, weighed in on the community resilience fee, telling AZ Free News: “Franchise Fees are a routine component of a utility providing service to a municipality, but what isn’t typical is the coupling of a taxpayer supported slush fund to prop up pet projects for the city in the name of fighting climate change.”

The community resilience charge isn’t the only fee that TEP is attempting to pass along to its Southern Arizona consumers. Earlier last year, TEP submitted an application to the Arizona Corporation Commission (ACC), proposing a rate increase of 11.8% to take effect no later than September 1, 2023. TEP informed the Commission that “the new rates are intended to result in an increase in retail revenues of approximately $136 million.” According to reports, TEP customers’ bills would increase more than $14 each month should the ACC sign off on the request.

The rate increase before the ACC has earned fierce opposition from the Sierra Club, which recently took a position against TEP’s attempted action. In a March 29th release, the Sierra Club warned “the rate hike would be catastrophic for low-income families who are already hard struck by inflation, and would hurt disadvantaged and frontline communities that often bear a disproportionate air pollution burden.”

Commissioner Thompson is closely watching as both the Special Election and ACC”s decision play out before him. When asked by AZ Free News for his thoughts on these unfolding issues affecting southern Arizona, he said, “Utilities should be approaching state regulators, not courting local governments, when promoting initiatives that may have an impact on the overall reliability and integrity of our power grid.”

Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.

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