Attorney General Mayes Appeals Arizona Corporation Commission's Approval of Tucson Electric Power Data Center Deal for Project Blue

PHOENIX — Attorney General Mayes today 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.

"The Arizona Corporation Commission cannot give away the constitutional authority Arizonans entrusted to it,” said Attorney General Mayes. “The Commission does not have the power to let a utility and a data center operator quietly agree to set their own rates, cut the public out of the process, and call it a day. If we allow that here, we are telling every large energy customer in Arizona that they can negotiate sweetheart rates outside of public oversight — and ordinary Arizonans will be left to pick up the tab."

The appeal follows the Commission's vote in December 2025 to approve the agreement and its subsequent denial of the Attorney General's request for rehearing. The State is asking the court to vacate the Commission's decision and send it back with instructions to remove the offending provision.