Derrick Espadas, MBA, is a candidate for the Arizona Corporation Commission.
Tucson Electric Power wants you to believe they are on the verge of financial distress. In their press release justifying a rate increase that would hit every household and business in Southern Arizona, they portray themselves as strapped for cash, saddled with costs, and forced into difficult decisions. However, this is not a company in crisis. Over the last three years alone, TEP has reported profits of $217 million, then $258 million, and then $288 million. Three consecutive years of hundreds of millions in profit after paying salaries, buying fuel, maintaining lines, paying taxes and managing their obligations.
That is a fraction away from a 38% increase in profits in three years. The Economic Business Research Center at Eller College announced the median pay increase for Arizonan workers accelerated to within the top 10 of states with wage gains at 10% — far short of TEP’s woeful blessing.
So, when TEP turns around and pleads poverty to justify a 14% rate hike — one of the steepest in recent memory — residential skepticism is justified. This is not a utility struggling to keep the lights on. This is a monopoly crying wolf.
Profits over people
Tucson Electric Power is not hurting. Yet they want to transfer even more costs onto Tucsonans: families already stretched by inflation, rising housing costs, and stagnant wages.
The most galling part of their announcement is the rationale. TEP says the rate hike is in part to continue subsidizing programs for low-income households. That sounds commendable at first but dig deeper and the logic turns horrific. Rather than reallocating a fraction of their existing profits, TEP insists the only way to support low-income customers is by squeezing everyone else. Their framing is designed to pit neighbors against neighbors: do you want your bill lowered, or do you want to abandon the poor? They pretend it’s a zero-sum choice. It isn’t.
A false choice
TEP’s maneuver is a classic example of corporate double-speak. They cast themselves as benevolent providers of safety nets, as if they reluctantly shoulder this burden out of civic virtue. The truth is, they can more than afford to fund these programs without jacking up rates on the rest of us. Subsidizing energy costs for struggling families should be part of their baseline business responsibility, not a pawn in their profit-maximization game.
Let’s do some simple math: last year alone, TEP’s profit exceeded $288 million. Divert just 1% of that figure, and you free up over $2 million to cover subsidies and assistance programs. Imagine what 5% could achieve. This is money they already made — not hypothetical, not projected, not diverted from operations, not diminishing C-suite salaries, not removing from capital expenditures (of which they recoup the costs from ratepayers), and not dependent on passing the hat to Tucson ratepayers.
Shifting the burden
What TEP is really saying with this rate proposal is that they refuse to shrink their profit margins, even slightly, to cover community costs. They want the rest of us, the very people who are captive customers with no alternative provider — to carry the weight. That’s the luxury of a regulated monopoly: you can privatize the gains, socialize the costs, and call it good business.
TEP is not owned by the people of Tucson or Pima County. It is owned by foreign investors who expect ever-rising returns. This 14% hike isn’t just about meeting operational costs — it’s about smoothing the path for another round of handsome quarterly reports while families in Tucson wonder how they’ll cover the next electricity bill.
An opportunity for regulators
Public utilities exist in a delicate balance. We grant them monopoly control because it makes sense not to have six competing companies stringing wires across the desert. But in exchange, they are supposed to serve the public good. Arizona’s Corporation Commission exists precisely to hold utilities like TEP accountable, to prevent ratepayers from being exploited simply because there’s nowhere else to turn.
This proposed 14% hike should be a wake-up call for regulators. Are we going to rubber-stamp corporate narratives about financial necessity, or are we going to demand transparency, restraint, and fair dealing with the public? Regulators should require TEP to demonstrate that every penny of this increase is truly essential.
A call to action
Electricity is not a luxury in Tucson. It’s a necessity. When temperatures soar above 110, when families need refrigeration for food and medicine, when small businesses struggle under operating costs, rate hikes are not just an inconvenience — they’re a direct hit to quality of life.
TEP wants to tell us we can’t have both affordable electricity and programs to help the most vulnerable among us. That is a lie. They can fund assistance, maintain infrastructure, and continue building a renewable energy future without pulling an extra 14% out of Tucson pockets. They just don’t want to.
Regulators, policymakers, and the public must push back. A company that banked over $217 million just two years ago cannot plausibly cry poverty today. It’s time we called this what it is: a transparent attempt to wring more from the public while keeping shareholders smiling.
If Tucson Electric Power truly wants to be a partner in this community, then it can start by proving that its commitment runs deeper than annual profit reports. Until then, every claim of hardship from their press releases rings hollow and offensive.
Derrick Espadas, MBA, is a candidate for the Arizona Corporation Commission.
