Legal Debates Intensify Over Tucson Electric Power and Project Blue Agreement
The legal landscape around a significant energy service agreement has gotten more complex as a Maricopa County Superior Court judge listened to new arguments on September 24. The focal point is a 10-year contract between Tucson Electric Power (TEP) and Project Blue, a major data center project.
Attorney General Kris Mayes initiated legal action to mandate a rehearing, challenging the Arizona Corporation Commission’s approval of the agreement last December. Mayes contends that Tucson and other stakeholders were deprived of due process and that the potential financial burdens on existing ratepayers were overlooked.
One of the controversial elements of the contract is a clause permitting TEP and Project Blue to independently sanction rate changes without seeking the Corporation Commission’s approval. However, attorneys representing the Corporation Commission argue that the agreement includes language mandating adherence to state laws, implying that commission approval is necessary.
The recent hearing also examined whether Tucson complied with the Corporation Commission’s timeframe for intervention requests, which is set at 20 days following a decision. There is disagreement over whether this period begins on the date of the vote during the open meeting or when the decision is formally documented seven days later.
Thomas Van Flein, an attorney for the Corporation Commission, noted that commissioners possess the discretion to reject intervention requests, stating, “Intervention is not necessarily mandatory in this case.”
Constitutional issues were also raised regarding how TEP and Project Blue intend to manage future rate hikes. Mayes has called for a rehearing and the opportunity to cross-examine representatives from TEP and Project Blue. Her office seeks clarity on the intentions behind Project Blue’s proposed “choose your own rate” plan with TEP.
Judge Randall H. Warner indicated that the explicit requirement for Corporation Commission approval in the event of a rate change might need to be incorporated into the contract for clarity. However, he did not deliver a decision regarding the rehearing.
