Heinz Urges Supervisors to Reassess Project Blue Deal Following TEP Rate Hike Request

In a rapid development following the Pima County Board of Supervisors’ approval of a land sale for the “Project Blue” data center, Supervisor Matt Heinz is pressing for a re-evaluation of the decision. This request comes in the wake of Tucson Electric Power (TEP) announcing a proposed rate hike, which could see customer bills increase by approximately 14% on average.

The board’s initial vote, which passed 3-2, included opposition from Supervisors Jen Allen and Andrés Cano. Heinz, who supported the agreement, later expressed his concerns in a memo, emphasizing the importance of reconsidering the zoning change necessary for Project Blue.

Heinz’s agenda item will be available for discussion at the next board meeting on July 1. His request raises significant implications: if the rezoning is reconsidered, it may potentially void the entire agreement regarding the data center.

“The timing of that press release created some pretty bad optics for TEP and the county,” Heinz remarked, referring to the coincidence of the rate announcement and the board’s decision. “I want to make sure that people know these things are not related.”

TEP, in response, asserted that their decision to increase rates was not connected to the board’s vote. Chief Administrative Officer Erik Bakken stated, “We understand how the proximity of these two events raised concerns, and we regret any confusion or concern that may have caused. The timing was purely coincidental.” Bakken had been present at the board meeting to discuss the energy demands of Project Blue.

TEP has indicated that Project Blue will contribute significantly to energy consumption, covering its share of infrastructure costs for the new data center on Tucson’s Southeast Side. The proposed rate changes are slated to take effect in September 2026 and are based on $1.7 billion in grid enhancements completed since 2021. Any increase, however, requires approval from the Arizona Corporation Commission, a board with Republican leadership.

Heinz, emphasizing transparency, reiterated the need to clarify the recent developments involving TEP and their implications for Project Blue. “In light of the new information we learned literally minutes after the conclusion of the June 17th board meeting, I believe the board must reconsider the assurances we were given and the overall project proposal at hand,” he stated in his memo.

The forthcoming meeting on July 1 will be crucial in determining the fate of Project Blue, as finalizing the land sale also requires annexation by the city of Tucson.