Tucson voters rejected a 25-year franchise agreement with Tucson Electric Power (TEP) in Tuesday’s election, with unofficial results showing 55% opposed to Proposition 421. The rejection means the existing franchise agreement and its 2.25% fee expire in April, forcing TEP to seek individual permits for street access and voiding a proposed $64 million energy collaboration agreement.
TEP spokesman JD Wallace said the utility will need to navigate an uncertain regulatory landscape once the current agreement expires. “We’ll be in uncharted territory if voters reject Prop. 421,” Wallace told AZPM. TEP spokesperson Joe Barrios said it is difficult to predict the impact on service repair times, noting the utility has operated under a franchise agreement for so long, according to KJZZ.
The rejected measure included an Energy Collaboration Agreement that would have provided $2 million annually for energy affordability projects, including bill assistance for low-income households and electric vehicle charging infrastructure, with payments increasing by 2% every two years for a total of about $64 million over 25 years, according to AZPM.
TEP said those investments would come from corporate resources, not ratepayer funds. The agreement was contingent on voter approval of Proposition 421.
Opponents from Public Power Tucson, a group advocating for a city-owned utility, campaigned against the franchise agreement. June Williams of Public Power Tucson called the Energy Collaboration Agreement an attempt at “greenwashing,” telling KJZZ “there’s no effective way to track that because what’s in shareholders’ pockets is money from Tucsonans.” Lee Ziesche, who helped lead the Public Power campaign, said the group spent less than the $1,600 threshold that would require campaign-finance filings, according to the Arizona Daily Star. “We’re incredibly excited… TEP couldn’t buy the election,” Ziesche told the Arizona Daily Star. Williams said the rejection is “a clear voice saying we would like a takeover of TEP, we want cheaper bills. We actually want green energy,” according to KJZZ.
Proposition 421 received public support from Mayor Regina Romero, Vice Mayor Lane Santa Cruz, and council members Kevin Dahl and Selina Barajas, as well as Pima County Supervisors Jen Allen and Andres Cano, according to AZPM. TEP contributed $4.3 million to TEP for Tucson, a political action committee that produced advertisements and campaign materials supporting the measure, according to the Arizona Daily Star. Romero touted the Energy Collaboration Agreement as a way to direct TEP shareholder money toward clean and resilient infrastructure, KJZZ reported.
This marks the second time in three years Tucson voters have rejected a new franchise agreement, following a similar rejection in 2023, according to AZPM and KJZZ. In 2023, TEP implemented a 10% rate increase and proposed 100-foot utility poles near the University of Arizona, which drew resident frustration, KJZZ reported. TEP has served as Tucson’s electricity provider for more than a century, according to AZPM. In 2025, TEP’s parent company, Fortis Inc., reported a profit of $1.2 billion.
The franchise election occurred amid an ongoing rate case before the Arizona Corporation Commission that began in mid-2025. TEP initially requested a 14% increase before later seeking 9.8% following an administrative law judge ruling, according to the Arizona Daily Star.
Public Power Tucson is pushing the City Council to act on a study commissioned after the 2023 rejection that examined the cost of establishing a city-owned energy utility, according to KJZZ. Williams noted that residents outside Tucson city limits do not have a franchise agreement with TEP and questioned whether the utility responds to their service needs more slowly, KJZZ reported.
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