The Arizona Attorney General’s Office has filed an appeal in Maricopa County Superior Court challenging the Arizona Corporation Commission’s approval of a special energy agreement between Tucson Electric Power (TEP) and and Beale Infrastructure for the Project Blue data center.
At issue is a provision in the agreement allowing TEP and the Beale to set electricity rate schedules between themselves.
The Attorney General argues this violates the Arizona Constitution, which gives the Commission exclusive authority to set just and reasonable utility rates.
In December 2025, the Arizona Corporation Commission voted 4-1 , with Commissioner Rachel Walden casting the dissenting vote, to approve an Energy Supply Agreement (ESA) between Tucson Electric Power Company (TEP) and Humphrey’s Peak Power LLC for a planned data center campus proposed to be built in Pima County.
The Commission’s role in this case was to review the ESA to ensure it meets regulatory requirements and provides protections for all TEP customers.
The 10-year agreement includes minimum monthly billing requirements, the gradual increase in load over 18 months for all TEP customers, and provisions that confirm Humphrey’s Peak Power LLC will be financially responsible for all costs related to building new infrastructure that serves only the proposed data center campus.
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