Arizona Attorney General Kris Mayes is challenging the Arizona Corporation Commission’s speedy decision from December 10, 2025, to permit a clandestine energy contract between Tucson Electric Power (TEP) and two other companies, highlighting concerns about potential negative ramifications for the state’s electricity consumers. Mayes particularly pointed out the potential for substantial rate hikes due to an agreement allowing TEP and the data center, known as Project Blue, to set their own electricity rates sans regulatory oversight, which she deemed a “dangerous recipe” for Arizona residents, as reported in a recent release from the AG’s office. According to the announcement, the agreement does not specify whether such choices in pricing would be up for review by the Commission, which runs counter to the Arizona Constitution that vests the power of ratemaking squarely with the Commission, not private parties.
Emphasizing the importance of transparency in these high-stakes deals, the Attorney General argued that the Commission has not only overlooked its constitutional and statutory duty but also potentially left future ratepayers vulnerable to increased costs for electricity generation, especially as TEP expects to supply a whopping 286 megawatts to Project Blue by 2028, enough to cool tens of thousands of homes. “The Commission must ensure that its decisions are grounded in a complete record and made in the public interest,” Mayes said, advocating for a full evidentiary hearing and procedural rights for the State of Arizona and the City of Tucson, including the ability to fully investigate, present evidence, and subpoena witnesses.
In her filing, Attorney General Mayes requested the Arizona Corporation Commission to allow the State of Arizona and the City of Tucson to intervene with full rights, which would notably include the presentation of oral and written evidence, as well as cross-examination of witnesses under oath. Her office insists that such unprecedented agreements that could influence electricity rates and grid stability in Arizona demand a high level of scrutiny and public accountability…