Local opinion: Statements in TEP Guest Opinion disputed

I am writing to identify statements included in TEP VP Jason Rademacher’s Sept. 21 guest opinion that give rise to concerns about accuracy, transparency, and impact on captive ratepayers.

TEP does provide great benefit to our community, but can/should do much more to collaborate and initiate cost/rate reductions and assure TEP’s financial sustainability for its Canadian owner, Fortis.

TEP says:

“We’ve also held rates relatively steady, with an average annual increase of just 2.1 percent over the past 25 years.”

“The proof is in the pricing.”

“Since 2021, TEP has invested more than $1.7 billion to upgrade the grid, improve resiliency, and expand our use of clean energy resources ... We’ve been absorbing those increases without raising rates, but that can’t go on forever.”

Facts:

TEP failed to disclose that for 10 years of that 25-year period, until 2008, the ACC banned TEP from increasing rates in part to “to protect Arizona ratepayers from the predatory practices.” A 50% increase over 15 years is 3.3%, much higher than TEP’s 2.1% claim. And those chronic increases compound, increasing ratepayer charges.

TEP residential rates increased by about 24.5% from 2010-20. From 2020-23 rates rose by approximately 24.9%, a surge comparable to the 1998-2020 period. Post-2023, TEP has received another 10% increase. June 2025, TEP requested another rate increase, which is expected to be reviewed by the ACC and could take effect in September 2026.

A comparison of TEP and SRP residential basic plan rates documents that lower rates are possible while maintaining reliability. SRP is a publicly owned Arizona utility. Its residential prices are 31% lower than TEP’s in the winter and 17% lower than TEP’s in summer. SRP continues to construct lower-cost solar-BESS to satisfy increased demand for electricity, data centers, population growth, and reduce costs, improve reliability, and minimize precious water use/loss.

Interesting that TEP did not mention water use/Project Blue issues: “In our dangerous desert heat.” Nor that TEP purchases of natural gas create methane emissions that trap 80% more heat than CO2, exacerbating that extreme heat and other costs to ratepayers and taxpayers.

TEP’s cited “investment” has done nothing to reduce ratepayer costs.

There’s a big difference in “investing” captive ratepayer revenues to reduce ratepayer costs/rates versus increasing TEP “return” on capital expenditures and maintaining shareholder dividends.

Especially when much lower fixed-cost AZ solar-BESS resources were/are available.

Today, 13 years after the first 1MW solar system was installed in Southern AZ by Pima County, per the TEP SEC 2024 filing, TEP generates only 14% of the electricity it sells with Arizona solar.

Regarding transparency, TEP stopped publishing executive compensation in its SEC filings, it doesn’t publish Resource Planning Advisory Council (RPAC) discussions/results. It controls who can serve, restricts advisors from publishing their comments, and excludes public comments from the RPAC meetings. TEP will use the biased RPAC process to claim that its chosen resource mix is optimal.

Regarding TEP criticism of City of Tucson Municipal Electric Utility initiative: To be productive and responsible, I suggest (request) that TEP listen to and satisfy ratepayer concerns and desired results. Act to develop a collaborative relationship.

As demonstrated by SRP, it is possible to do so by increasing TEP Arizona Solar-BESS generation to 50%.

TEP and our Arizona Corporation Commission need to act responsibly to optimize benefit to Arizona, captive ratepayers, not just huff, puff and generate more hot air.