TUCSON, Ariz. (January 22, 2026) — The Arizona Corporation Commission said in a written statement today that its TEP / Data Center December 2025 approval of Tucson Electric Power’s Energy Supply Agreement tied to Beale Infrastructure’s proposed data center remains in place after rehearing requests were not granted within the statutory deadline.
Under Arizona law, an application for rehearing is deemed denied if the Commission does not grant it within 20 days of filing. The ACC previously approved the special contract on December 3, 2025, citing customer protections, including minimum billing requirements, termination-related financial security, and staff findings that the agreement would not harm system reliability or shift costs to other customers.
The Commission’s latest position follows a series of challenges to the agreement, including a rehearing request announced by Arizona Attorney General Kris Mayes, who argued the contract raised oversight and rate-setting concerns tied to the large-load customer arrangement.
Separate track: Pima County lawsuit over rezoning process
The ACC action is unfolding alongside litigation in Pima County Superior Court targeting the county’s land-use approvals connected to the same project. A statutory special action complaint filed January 13, 2026, names Pima County and the Pima County Planning and Zoning Commission as defendants. The plaintiffs are No Desert Data Center, John “Rye” Whalen, and Meri Sias, represented by Hofmeyr Law, PLLC, and the Arizona Center for Law in the Public Interest.
The complaint specifically points to the Planning and Zoning Commission’s April 30, 2025, meeting and rezoning vote as a focal point of the alleged Open Meeting Law and notice violations.
In the filing, plaintiffs argue county staff and the commission failed to provide “accurate or meaningful notice” before that vote, alleging the agenda and materials did not clearly disclose the planned data center use and related sale negotiations at the time. The lawsuit seeks to have the rezoning declared invalid.
While the lawsuit does not directly overturn the ACC’s utility decision, it could affect the project’s timeline if a court voids the rezoning tied to the development site.
The lawsuit, according to the Arizona Luminaria, “is framed as a procedural challenge under Arizona’s Open Meeting Law—focusing on whether the meeting notice was sufficient—the requested outcome is substantial. The plaintiffs ask the court to void the Planning & Zoning Commission’s April 30, 2025, action that advanced the comprehensive plan amendment and rezoning tied to the project.”
Source: Real Estate Daily News summary of the complaint filed Jan. 13, 2026, No Desert Data Center et al. v. Pima County et al.