Testimony of Devi Glick on Behalf of Sierra Club in the Tucson Electric Power Rate Case
Synapse provided expert witness support to Sierra Club in the Tucson Electric Power (TEP) 2023 rate case. Our testimony and analysis focused on TEP’s two coal-fired power plants at Springerville and Four Corners, as well as the associated operations and maintenance (O&M) and capital expenses that TEP was requesting to include in test year rates and rate cases. We evaluated TEP’s current data and future cost projections, as well as public market data for renewables and battery storage projects in the region, to evaluate the reasonableness of TEP's plan to continue relying on the coal plants relative to alternatives.
We found that the costs to operate and maintain Springerville and Four Corners substantially exceed the cost of alternative, clean energy resources. Additionally, we found that TEP could avoid a substantial portion of its projected future costs at its coal units, specifically unnecessary capital expenditures and O&M costs, by retiring the plants early and replacing them with zero and low marginal cost alternatives.
We recommend that the Commission disallow test year spending at Four Corners on the basis that the plan incurred costs about market prices in recent years and is uneconomic relative to alternatives. We also recommended that the Commission limit spending without pre-approval at Springerville. Finally, we recommended that the Commission require TEP submit current analysis —i.e., analysis performed within one year of a rate request--to justify the continued operation of the Springerville plant, as part of its future rate case application, and update that analysis when major market and regulatory changes occur that it knows will render its current analysis obsolete.