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City-funded energy sourcing study proceeds as TEP franchise renewal approaches; public engagement planned
Summary
A city-funded energy-sourcing study examining municipal utility feasibility, community choice aggregation, solar procurement and microgrids is on schedule; consultants expect a draft in March and final report in May as the city prepares for TEP franchise discussions.
The City of Tucson’s contracted study of energy-sourcing options — including the feasibility of a municipal utility, a community choice aggregation (CCA) program, solar contractual models and microgrids — is on schedule, city-contracted consultants told the mayor and council.
GDS Associates, the consultant team, said it started substantive work in October, plans a draft report for March and aims for a final report in May. The firm described the four-part scope: municipalization (purchase of distribution assets and city-operated utility), the feasibility of a CCA program (power supply procurement while a distribution utility remains with the incumbent), solar agreements and virtual power purchase agreements, and microgrid siting and feasibility.
Amber Geschwind of GDS summarized supply-side context using Tucson Electric Power (TEP) publicly posted resource plans and said TEP responded to the city’s data request with customer and load data that will inform the analysis. GDS said an initial modeling premise is that a newly formed municipal utility might supply a greener mix in early years (for example, roughly 50% greenhouse-gas-free power in its first operating year) and ramp to local greenhouse-gas goals by mid-century; scenario analysis will consider costs, stranded-asset risks, and separation costs to isolate distribution assets.
GDS described CCA as a program not currently enabled under Arizona law; the study will therefore analyze best practices from other states and how a CCA could look if enabling state legislation changed. For microgrids, the consultants said they are assessing types of microgrids — islanded systems that do not feed back into the grid and grid-connected systems that do — and will note regulatory and permitting considerations.
City staff said the current franchise agreement with TEP expires in April 2026; a draft franchise proposal from TEP had been received and staff said any franchise or ballot questions would need to be scheduled and negotiated well ahead of the expiration. GDS and staff emphasized the need for robust public outreach; the consultants planned a virtual workshop and a public draft review in the coming months.
Multiple council members asked for timely public release of the draft and asked the consultants to review national examples and procurement-price data; consultants said they would provide comparisons and invited further engagement. Staff said they would return the draft report to the council in March and a final in May, in time to inform decisions about the franchise timeline and public engagement ahead of potential ballots or negotiations.
