Judge Reviews Tucson Electric Power’s Deal with Project Blue Amid Legal Challenges
On September 24, a Maricopa County Superior Court judge deliberated on the contentious issue of whether a rehearing should be granted for a decade-long energy service contract between Tucson Electric Power (TEP) and Project Blue, a major data center initiative.
Attorney General Kris Mayes initiated legal action following the contract’s approval by the Arizona Corporation Commission last December. Mayes asserts that the approval process neglected due process for Tucson and overlooked potential risks of cost-shifting to current ratepayers.
The lawsuit highlights a controversial clause allowing TEP and Project Blue to independently modify rates without requiring the Corporation Commission’s endorsement.
Defending this clause, Corporation Commission attorneys point to a stipulation mandating adherence to state laws, implying that any rate adjustments would still require Commission approval.
The recent hearing also scrutinized whether Tucson adhered to the Corporation Commission’s timeframe for filing an intervention request. The Commission stipulates a 20-day limit post-decision for such motions.
However, disagreement arose over whether this period commenced on the vote’s date or when the decision was officially documented a week later.
Attorney Thomas Van Flein of the Corporation Commission stated that irrespective of the timing, the Commission retains discretion to dismiss the intervention request, noting, “Intervention is not necessarily mandatory in this case.”
Discussions also touched upon the constitutionality of anticipated rate adjustments by TEP and Project Blue. Attorney General Mayes seeks a rehearing and cross-examination to clarify Project Blue’s intentions for a “choose your own rate” scheme with TEP.
Judge Randall H. Warner indicated that the clarity of the contract, in alignment with state laws requiring Corporation Commission approval for rate changes, overrides the parties’ intentions. Warner considered introducing a new clause to explicitly state this requirement but did not render a decision on the rehearing request.
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