Last attempt at rehearing Project Blue's energy service agreement rests on Maricopa County judge

A Maricopa County Superior Court judge heard another round of arguments on Sept. 24 for and against granting a rehearing of a 10-year energy service agreement between Tucson Electric Power and the large-scale Project Blue data center.

Attorney General Kris Mayes sued to force the rehearing a month after the contract was approved by the Arizona Corporation Commission last December. In the rehearing request, Mayes argues the city of Tucson and others were denied due process and that cost-shifting risks to existing rate payers were ignored by the commission.

The request also alleges the contract includes a provision that allows TEP and Project Blue to unilaterally approve rate changes without approval from the Corporation Commission.

Attorneys with the Corporation Commission say the section on future rate-setting includes a statement that the two entities must adhere to state law, which they argue is evidence ACC approval will be required.

Thursday’s hearing focused on whether or not the city of Tucson had met a Corporation Commission deadline to request an intervention in the decision.

The Corporation Commission says this motion must be filed within 20 days of the decision.

But attorneys for the Corporation Commission and the city disagreed on whether or not the official date of the decision was the day of the vote at the open meeting or the day the decision appeared in formal writing, seven days later.

Whether or not the city had met the deadline, Attorney Thomas Van Flein with the Corporation Commission says commissioners would be within their authority to deny the request.

“Intervention is not necessarily mandatory in this case,” Van Flein said.

There was also discussion on claims about the constitutionality of how TEP and Project Blue plan to address future rate increases.

Mayes has requested a rehearing and cross-examination of TEP and Project Blue. Attorneys with Mayes’ office say it is not clear what intent Project Blue developers had with requesting a “choose your own rate” structure with TEP.

Judge Randall H. Warner says intent of the two parties does not matter if the contract is clear on state law that says Corporation Commission approval is required for any rate change.

Warner discussed adding a new stipulation to the contract that makes that requirement more clear, but did not issue a verdict on a rehearing.