TUCSON, Ariz. (KGUN) — Last year in May, the Tucson Democratic Socialists of America were in downtown protesting TEP’s rates.
Their fight still continues as the City of Tucson recently got back a study from GDS Associates about what it would look like if the city operated its own electric company.
A public utility company owned by the City would be one option. Another option looks at a community choice aggregation program where the City would give customers power but TEP would still own and operate the transmission and distribution system.
The Tucson Democratic Socialists of America’s communications coordinator Lee Ziesche said both options could work.
“There’s a very good chance that we could have much lower rates because we’re no longer paying for their exorbitant profits,” Ziesche said.
GDS’s study looked into the feasibility of both public power utility and community choice appreciate programs, how to meet the City’s green energy goals, and a micro grid.
“Because we’re cutting out the very high profit rates that are driving up rates even more, we will still actually save money over time,” Ziesche said.
TEP’s spokesman Joe Salkowski said they have complied with all of the information GDS has requested. He said TEP’s rates are still lower than the rate of inflation even though rates have gone up more recently.
“In part because we’re seeing the same higher costs that everybody else has been seeing over these past few years,” he said.
However, he said TEP is not willing to sell because they are confident they are providing the most reliable and affordable service.
GDS’s study found that it would take the City at least $820 million at book value to buy out part of TEP’s distribution system. That number could go up depending on if they buy more of their assets.
“It would be impossible to provide the same level of reliability for anywhere near as affordable a price as our customers are paying,” Salwoski said.
The study said the cost to customers could still go up no matter who owns the electricity.
Tucson Mayor Regina Romero said she is hoping the City looks into the costs of infrastructure and also takes a look at how the process would play out legally.
She’s also hoping the City considers its preferences in terms of investments they would have to make and consider costs to help the City achieve its goal of reaching 50 percent greenhouse gas neutrality by 2045.
GDS said they’ll have a final report in May. They said they’re estimating the first potential year of operation is 2028.
GDS said the community choice aggregation program is not available in Arizona by lawmakers but they’re looking at other states for reference.
Ziesche said she’s hoping GDS studies how much customers have already paid TEP.
“We are clearly suffering from not only a climate crisis, but an affordability crisis,” she said.
——-
Andrew Christiansen is a reporter for KGUN 9. Before joining the team, Andrew reported in Corpus Christi, Texas for KRIS6 News, Action 10 News and guest reported in Spanish for Telemundo Corpus Christi. Share your story ideas with Andrew by emailing andrew.christiansen@kgun9.com or by connecting on Facebook, or Twitter.
