Arizona Corporation Commission Approves TEP Energy Deal for New Pima County Data Center, Ensuring Consumer Protections

TUCSON, AZ (December 8, 2025) — The Arizona Corporation Commission has approved Tucson Electric Power’s special energy supply agreement (ESA) with Humphrey’s Peak Power LLC, an affiliate of Beale Infrastructure, paving the way for TEP to serve a Pima County Data Center being planned. The measure passed on a 4–1 vote, with Commissioner Rachel Walden dissenting.

“TEP has an obligation to serve all customers within its territory,” said Commissioner Lea Márquez Peterson. “While the County Board of Supervisors has voted to rezone and sell the land for this development, the Commission’s vote this week to ensure that residential ratepayers are protected from cost shifts is vitally important to the region… as a Commissioner and a Tucson resident, I believe it is in the best interest of the ratepayers to approve the Special Contract and the protections it provides.”

“Regrettably, I had to vote against this contract”, said Commissioner Rachel Walden. “I am fully supportive of the buildout of this industry in our state, and the potential it holds for Arizona. But TEP’s contract with the developer did not go far enough in providing ratepayer protections for existing customers. I want to see longer-term contracts that contain upfront requirements to offset infrastructure needs, and early exit consequences that will make TEP whole; not leave existing customers holding the bag.”

The 10-year agreement includes minimum monthly billing requirements, a gradual increase in load over 18 months to ensure safe and reliable service for all TEP customers, and provisions confirming that Humphrey’s Peak Power LLC will be financially responsible for all costs related to building new infrastructure serving only the proposed data center campus.  More than 100 comments were submitted to the docket, and more than three dozen members of the public spoke before the Commission during the Open Meeting.  The Commission asserts that its jurisdiction in this case is limited to the generation tie lines and transmission infrastructure, the rates charged to customers, and whether those rates are just and reasonable for all customers; the Commission’s vote is not affected by the type of project associated with the ESA.

The vote followed extensive public comment reflecting high community interest. Commissioner Rene Lopez addressed concerns by clarifying the Commission’s jurisdiction and reiterating that the ESA is structured to prevent cost shifts and protect TEP from undue financial risk. With Arizona preparing for significant load growth driven by data centers and other large users, Lopez underscored the importance of special contracts like this one in supporting grid reliability, safety, and affordability.