Local opinion: The $14 million question

Some of us are old enough to remember that old TV program "The Sixty-Four Thousand Dollar Question," which aired back when that much money would have bought 25 new luxury cars. Nowadays, one moderately sized basic vehicle costs that much.

But, here in Tucson, we have been engaged in what could be called "The Fourteen Million Dollar Question." You see, there is one part of the proposed Franchise Agreement with TEP that needs major wording changes to clarify just who is paying the $14 Million/yr franchise fee.

Background Information:

A franchise fee is defined as a fee paid by the franchisee (in this case TEP) to the franchiser (in this case the City of Tucson), in return for the City's permission for TEP to use the public rights-of-way (streets, alleyways, sidewalks, etc.) to install, maintain, and upgrade TEP's power lines and other infrastructure without having to obtain individual permits for every minor operation, such as repairs and occasionally placing a power line underground.

However, after the 25-year Franchise Agreement signed in 2000, this fee began appearing on ratepayers’ monthly bills from TEP, as a specific line item that we (ratepayers) pay to TEP. So instead of TEP paying any part of the Franchise Fee to the City, TEP simply collects the fee from its ratepayers and passes that on to the City. Thus, TEP actually pays no part of the Franchise Fee with its own money.

So, I looked up the ballot language from the 2000 election, and there is nothing in it that advises the voter that the fee would be passed on to the ratepayers. I suspect that it was likely the Arizona Corporation Commission (ACC) that gave TEP permission to label it an "operational cost," which the ACC allows monopoly utilities like TEP to pass on to its captive ratepayers.

In Guest Opinions by TEP executives, they have used the fact that TEP acts as the fee collector, to mislead the public into believing that TEP is using its own money to pay the City the Franchise Fee. But the bottom line is that the ratepayers, not TEP, are paying the entire Franchise Fee!

This is something that must be made clear to every TEP customer before we vote on whether to pass another 25-yr Franchise Agreement with TEP.

Misleading Wording in Proposed FA:

In the proposed Franchise Agreement, the wording of the paragraph labeled "Financial Considerations" again misleads the reader into believing that the $14 Million/yr will be coming from TEP. This must immediately be corrected, so that every potential voter knows that the $14 Million has always, and under the new Franchise Agreement, will continue to be paid by them — the ratepayers — not TEP.

This is not a small problem. Democracy itself is threatened when people are misled, whether intentional or not. So, we must insist that this wording is made very clear.

Here is the flawed paragraph as it now reads:

"Financial Considerations –Currently, the 2.25% TEP franchise fee generates approximately $14 million per year. The approval and adoption of the parallel ECA will generate an additional $2 million per year for TRT purposes, with an annual escalation of two percent (2%). This is expected to total approximately $64 million over the full term of the franchise if approved."

Here is how I believe it should read:

"Financial Considerations –Currently, the 2.25% TEP franchise fee is paid entirely by ratepayers (not by TEP, who only collects it and passes it on to the City). The fee generates approximately $14 million per year in revenue for the City. Under the parallel ECA, TEP will pay $2 million per year [with an annual escalation of two percent (2%)]. If approved, this is expected to total approximately $64 million for Tucson Resilient Together (TRT) purposes over the full term of the franchise."

I strongly urge everyone to contact the Mayor and Council and insist that this wording be changed.