- Tucson Electric Power (TEP) disputes the findings of a draft energy study suggesting a city-run utility could replace TEP.
- The study's assumptions on cost and timeline are seen as flawed and unrealistic by TEP.
- TEP warns that pursuing the study’s recommendations could lead to increased costs and hinder progress towards clean energy.
Tucson Electric Power (TEP) is raising concerns over a preliminary energy study commissioned by the City of Tucson which assesses alternative energy supply options for the city. According to TEP, the study produced by GDS Associates, Inc. contains inaccurate assumptions, potentially misleading city officials about the viability and cost implications of the city taking over TEP's local energy grid.
TEP President and CEO Susan Gray stated, "Taking this report at face value could put our community's future at risk." The study proposes that the City of Tucson should pursue condemnation to acquire TEP's electric distribution and transmission systems within the city, alongside various operational facilities. However, TEP argues that this proposal is grounded on a timeline that is not feasible, suggesting the city utility could be operational by January 2028, despite similar initiatives elsewhere taking a decade or more.
The study, funded with $300,000, further suggests that the city could outcompete TEP by offering lower utility rates. TEP counters this claim, stating that the study's negligence of factors such as TEP's efficiencies and the essential separation of assets could inflate costs beyond the projections. Additionally, the study assumes insufficient investment in maintaining grid reliability, especially during high-demand periods such as Tucson's summer months.
TEP, a subsidiary of Fortis Inc. (FTS, Financial), which provides service to 455,000 customers in Southern Arizona, emphasizes the need for collaboration with the city on their shared goal of a cleaner energy future. The Mayor and City Council of Tucson have recently moved to forge a new franchise agreement with TEP, aiming for a cooperative approach rather than the divisive path suggested by the study.
TEP warns the city and its residents to be wary of the study's conclusions, which could result in increased electric bills and a slowdown in achieving cleaner energy objectives. For more information, TEP's parent company, Fortis Inc., continues to be a significant player in the North American utility market, with regulated utilities serving over 3.4 million customers across Canada, the United States, and the Caribbean.
