On Jan. 21, 2026, the Arizona Corporation Commission’s Decision No. 81587 — which approves an Energy Supply Agreement (ESA) between Tucson Electric Power (TEP) and Beale Infrastructure Group / Project Blue data center developer — was left intact because rehearing requests were automatically deemed denied when the Commission took no action within the statutory 20‑day window.

ACC staff concluded the ESA poses no reliability risk, will not shift costs to other customers, and likely lowers fixed costs for residential ratepayers. They also highlighted customer protections embedded in the contract, including minimum billing requirements, termination penalties, and financial security assurances that guard against risk if the high‑load customer exits or underperforms.

This effectively formalizes a pathway in Arizona for negotiated, utility‑backed high‑load contracts — where some traditional transmission and credit risk is addressed contractually rather than solely through interconnection queue remedies. For data‑center sponsors or buyers evaluating Arizona sites, this signals a standard to watch: utility contract templates and ESA‑style term comparators will matter in underwriting and risk modeling.

The decision has drawn legal pushback from the Arizona Attorney General, who argues the process lacked full evidentiary hearings and transparency, but the regulatory posture and staff findings now stand for the moment.

➤ TAKEAWAY

If you’re stress‑testing site evaluations or drafting risk mitigants for high‑load utility service in Arizona, monitor how ESA term sheets evolve and compare them with standard tariff commitments and credit protections before underwriting projections.