Local opinion: Is Tucson 'bad for business'?

I recently heard someone claim that Tucson is “bad for business” because its laws limit how utilities can build — specifically referring to Tucson Electric Power’s (TEP) Midtown Reliability Project. The argument? Tucson should be more like Phoenix. Let’s examine that.

Since the 1980s, various City of Tucson plans and ordinances (laws) have required the undergrounding of new electric lines. For TEP’s Midtown Reliability Project to comply with these laws, it would have to bury about two miles of new transmission lines through the city center.

For comparison, Central Phoenix has 14 miles of underground transmission lines. Tempe — near Arizona State University — has eight miles, Chandler seven, and Scottsdale ten. Meanwhile, Tucson has zero. TEP claims that’s because Arizona law forbids it from incurring the higher upfront cost of underground lines. If that’s true, how have APS and SRP — utilities in the Phoenix metro — been doing it for decades?

TEP will argue that undergrounding in Phoenix was paid for by third parties. That’s not accurate. Most Phoenix-area projects were, or still are, financed by APS and SRP through regular rates. Furthermore, as recently as last summer, Arizona courts reiterated to TEP that municipalities can require undergrounding at the utility’s expense.

Next, TEP will claim that undergrounding raises rates. Yet, APS and SRP have equivalent or lower rates than TEP despite far more buried infrastructure. In fact, studies show that undergrounding lines can save ratepayers money in the long run, since lower operating costs help offset the higher upfront cost. Underground lines are safer, more reliable, and cheaper to maintain and insure because they’re better protected from weather and accidents.

If anything, we should be requiring more undergrounding, not less. Upgrading TEP’s infrastructure is a once-in-a-century chance to harden our grid and improve our competitiveness with other regions.

SRP recognized this value long ago. In 1965, it established what is now called the SRP Municipal Aesthetics Program, allocating a portion of its ratepayer funds—currently $18 million per year — to municipalities for visual improvements, including burying lines. TEP calls such investment “imprudent.” If it is imprudent, how has SRP managed to do it for 60 years without issue? SRP is also obligated to invest prudently.

So, who is bad for business: the City of Tucson or TEP? If Phoenix is the gold standard, shouldn’t we require TEP to act more like APS and SRP, and invest in improving the aesthetics of Tucson’s neighborhoods and streets? Why do APS and SRP willingly protect or improve their service areas, but TEP does not — even when it’s required by law?

At a July Arizona Corporation Commission hearing, representatives from UMC Banner testified that new overhead transmission lines would “interfere with the whole purpose of the amount of investment in UMC Banner’s patient areas and towers.”[8] It stated that it expects the City of Tucson to enforce its plans and ordinances that protect views. This sentiment is undoubtedly shared by all who live and invest in Tucson. We expect the city to consistently enforce the letter and spirit of its laws. Otherwise, what’s the point of even having laws?

To the city’s credit, it has been doing an excellent job of recognizing and fixing the flawed processes that allowed TEP to get away with non-compliant projects in the past. City staff and leadership deserve praise for adjusting course and standing firm. Consistently enforcing the law is good governance — and good governance is good for business. It benefits you, me, and yes, even TEP.