Brattle Releases Preliminary Feasibility Study: Formation of a Public Utility in Tucson, Arizona
The City of Tucson, Arizona, has explored the potential of acquiring the electric distribution assets owned and operated by Tucson Electric Power (“TEP”) and forming a municipal electric utility to serve customers within its city limits. A Brattle team has conducted a preliminary independent analysis assessing the financial feasibility of a municipalization by the city and has also highlighted multiple additional factors that stakeholders should consider before proceeding.
Brattle’s analysis finds municipalization of the electric distribution assets within the city limits is not currently considered to be financially feasible. This conclusion is consistent with numerous other municipalization efforts across the United States in the past quarter-century. In Tucson, establishing a municipal utility would cost more than $4 billion to acquire TEP’s electric distribution assets within the city and to establish a new municipal utility starting in 2032.
In this circumstance, it is estimated that forming a new municipal utility would cost Tucson electric customers, on average, an additional $290 million per year over the next 20 years as compared to the same electric service continuing to be provided by TEP. This contrasts with the findings of a preliminary feasibility study conducted on behalf of the city in April 2025 that found forming a municipal utility within Tucson would be financially feasible. Brattle discusses the primary drivers for why this preliminary feasibility study provided to the city reached a different conclusion in terms of financial feasibility.
In addition to the fact that municipalization would not be financially feasible for Tucson, Brattle has highlighted numerous additional factors that the city should consider before deciding whether to proceed with forming a municipal utility that could also affect the timing, cost, and ability of the city to own and operate a municipal electric utility. Read the full report, Preliminary Feasibility Study, Formation of a Public Utility in Tucson, Arizona, below.
