Dive Brief:
- A public takeover of Tucscon Electric Power would cost the city more than $4 billion and increase electric bills by $5.8 billion over 20 years, according to a Brattle study commissioned by the Arizona utility and published Tuesday.
- Brattle’s white paper responds to a city-commissioned study last year that concluded a takeover was feasible. A petition calling for the city of more than a half million residents to form a public utility has garnered about 4,000 signatures.
- The petition is championed by the Tucson Democratic Socialists of America, who say formation of a public utility could lower electricity rates and provide residents with local control of their energy. TEP is owned by Canadian-based Fortis.
Dive Insight:
TEP’s response to the city-led feasibility study concluded public utility ownership would be a “risky, expensive proposal [that] would threaten reliability, reduce available funding for clean energy investments, compromise economic development, and create significant new financial challenges for the city.”
According to Brattle’s analysis, the additional cost of service from a city-run utility would add $162/year to the bill of an average residential customer in its first year of operations, rising to an additional $900/year after two decades.
The 2025 city-backed study found consumers could see savings of $20/month in the early years of a city-run utility, and $90/month in later years. Those savings depend on the city purchasing TEP’s assets for around $1.4 billion — significantly lower than the utility values them…