Local opinion: Main event: TEP ratepayers vs. TEP shareholders

What if your voting ballot on a franchise agreement between TEP and the City of Tucson read something like this: "Vote Yes, and TEP will pay a 2.25% franchise fee to the City of Tucson for 25 years.” You're thinking: "TEP paying something to the City out of their pockets and not ours sounds like a good idea." So you vote Yes. It passes. Now, your TEP bill arrives monthly, but deciphering the list of acronyms and fees is another story. I mean, who really looks at all the line items?

Now the 25 years are up, and TEP wants basically the same deal. So, you spend a bit of time decoding your escalating monthly utility bill only to discover that the 2.25% fee you thought TEP was paying to the City out of its own pocket has actually been charged back to you on your TEP bill every single month for 25 years as the “City Franchise Fee.”

Over all those years, TEP and its shareholders paid out exactly $0. You and the rest of TEP’s captive customers paid out — adjusted for inflation — a total of $340,000,000.

What you voted for 25 years ago absolutely did not happen the way it was advertised. TEP shareholders never paid the City anything. You did. Sure, the City levies a so-called utility tax (now 5%) and the City subtracted that 2.25% from it. You're still paying the 5%. So what does it matter how much the Franchise Fee is if you are paying it all no matter what (up to 5%.)? I mean It could be 2%, it could be 4%, it could be 5%. TEP will just charge that fee to you every single month on your bill and then transmit it to the City.

According to that ballot measure 25 years ago, TEP was supposed to pay that Fee to the City of Tucson from their own pockets without you reimbursing them. You voted Yes, you thought that was going to happen. You were misled. The plain language of that ballot measure was disregarded.

Now, in 2026, we have the Franchise Agreement renewal. TEP wants another 25 years of the same old, same old, with the franchise fee language pretty much unchanged. But as you can now see, the way that Franchise Fee runs through the TEP washer, you're the one hung out to dry.

It is so wrong. We cannot let that happen again. We gifted TEP shareholders $340,000,000, which increased their dividends over those 25 years. Are we going to do that again? That Franchise Agreement must be revised to have the TEP shareholders pay that Franchise Fee out of their own pockets and contractually not allow that fee to be added to TEP's rate base and reimbursed by the Ratepayers.

TEP is hell-bent on getting this Franchise Agreement onto a November ballot. That requires the Mayor and Council to vote on the agreement very soon to meet statutory timelines, so they will be voting on it in April. Let them know how you feel about this franchise fee fiasco. Call your Ward Council member or email the City Clerk and have that office distribute your comments to the Mayor and Council.

We certainly pay our fair share. It's high time TEP shareholders paid theirs.