Vice Chair Myers Confirms TEP Customers Protected from Data Center Cost-Shift

Phoenix, Ariz.- At the Arizona Corporation Commission's December 3, 2025, regular open meeting, Vice Chairman Nick Myers joined the Commission in a 4-1 vote to approve Tucson Electric Power Company's (TEP) special agreement for electric service with the planned data center (Project Blue) developed by Beal Infrastructure Group and its affiliate Humphrey's Peak Power, LLC (E-01933A-25-0187).

"Data centers are vital engines of our nation's technological and economic growth," stated Vice Chair Myers. "However, as these large new loads come online, it's essential that growth pays for growth so existing customers aren't burdened with the cost of additional generation and infrastructure."

In TEP's response to a letter from Vice Chair Myers, the company explained that it does not plan to add generation to serve the customer beyond the resources already planned to be developed in its 2023 Integrated Resource Plan (IRP). TEP further stated that if the data center should need additional power beyond the initial 286 MW, the data center would pay fully for the new generation resource.

The data center will be taking service under a Commission-approved tariff while also agreeing to contractual commitments to ensure TEP's customers are neither subsidizing the power nor assuming any risk if the project does not need its current anticipated load.

"I was pleased to hear TEP confirm that the data center will fully cover the construction costs for the necessary line extensions and new switchyard, ensuring that no expenses are shifted onto other customers," stated Vice Chair Nick Myers. "I believe the Energy Supply Agreement includes strong customer protections-such as termination fees, minimum billing payments, and safeguards if the data center does not operate as planned. In fact, adding the data center will reduce transmission costs for all other customers. This arrangement demonstrates that we can support economic development while protecting, and even benefiting, existing customers."

For more information, please contact Vice Chair Myers at [email protected].