The selected consultant will complete a feasibility study on the formation of a public power utility. This study is crucial as we approach the expiration of TEP’s franchise agreement in 2025. The study should provide a comprehensive analysis of the economic, technical, and regulatory aspects of forming a public power utility.

Phase 1 of the study should, at a minimum, consider (collect data on):

1. Feasibility
   1. A comprehensive feasibility study is the first step. This study should assess the economic, technical, and regulatory feasibility of forming a public power utility. It should include an analysis of the current energy infrastructure, potential costs of acquiring or building new infrastructure, and the projected costs and benefits of operating a municipal utility.
2. Legal and Regulatory Considerations
   1. The City would need to understand the legal and regulatory landscape for municipal utilities in Southern Arizona. This should include analysis of the Arizona Corporation Commission (ACC) and other regulations around the acquisition of infrastructure, environmental regulations, and regulations around the sale and distribution of electricity.
3. Financial Considerations
   1. Municipalizing energy distribution will require significant upfront investment. The study needs to work with Business Services and the City Manager’s Office to assess its ability to finance the acquisition or construction of energy infrastructure. This could involve issuing bonds, securing loans, or other financing mechanisms. The City would also need to consider the ongoing costs of operating and maintaining the utility, these costs as well as potential savings should be outlined as well.
   2. TEP’s SEC Filing
      1. https://www.sec.gov/Archives/edgar/data/100122/000010012222000012/tep-20220331.htm#i47e182ccbbd246689e0ea7eca5516af2_106
4. Energy Sources
   1. The City would need to decide what types of energy sources it wants to use. Because the goal is to transition to 100% renewable energy, the City would need to consider the feasibility and cost of sourcing energy from renewable sources like wind and solar, and other carbon-free power. This assessment should consider the role of a variety of energy storage solutions to meet the goals outlined in TRT, specifically, achieving carbon neutrality by 2045 for the Tucson community. 
5. Governance and Operations:
   1. A high level analysis of a suitable governance structure for the municipal utility. This could include a utility board or commission, and would involve hiring staff to operate and manage the utility. The City would also need to establish processes for billing, customer service, and other operational tasks.
6. Risk Assessment:
   1. Finally, the consultant would need to conduct a thorough risk assessment on behalf of the City. This should include potential operational risks, financial risks, and regulatory risks. The report should also include strategies to mitigate these risks.

Phase 2 of the study, following the successful completion of Phase 1, should, at a minimum, include:

1. Community Outreach
   1. Public support is crucial for the success of a municipal utility. The consultant/City would need to engage with the community, educate residents about the benefits of a municipal utility, and address any concerns or objections.
2. Transition Plan
   1. Transitioning from a private utility to a municipal utility is a complex process that can take several years. The consultant would need to develop a detailed transition plan, including timelines for each stage of the process.

Concurrent with the Public Power Feasibility Study, the consultant will work with community advocates and staff to develop a strategy for co-forming a Community Choice Aggregation (CCA) Program. This program will aim to procure 100% renewable power for Tucson, contributing to our goal of achieving city-wide carbon neutrality by 2045. The analysis should include the following:

1. Existing Programs
   1. Review and analyze existing CCA programs, including their structure, successes, and challenges.
2. Cost Analysis
   1. Analyze the cost difference between traditional grid supply energy and CCA energy for the entirety of any existing program. Please note, this should include both commodity and transportation and delivery charges.
3. Regulatory Environment
   1. Understand the regulatory environment for CCA programs in the state and region, including any legal or regulatory barriers to forming a CCA program.
4. Community Interest, Engagement, and Support
   1. Assess the level of community support for a CCA program and develop strategies for engaging with the community and building support for the program.

Evaluate the feasibility and cost/benefit of the City utilizing SSA’s and VPPA’s as a means of reducing its carbon footprint.

1. Definition and Overview
   1. Offer a detailed explanation of  VPPAs, where the City agrees to purchase a fixed amount of electricity from a renewable energy project at a predetermined price. Evaluate the current SSA’s the City has in its portfolio and if this is a sufficient strategy with the inclusion of VPPA’s to meet the City’s renewable energy needs.
2. Economic Implications
   1. Provide a detailed cost-benefit analysis of entering into SSA’s and virtual PPAs. This should consider potential risks and rewards, including market volatility.
3. Duration and Flexibility
   1. Examine the average duration of virtual PPAs and the flexibility they offer in terms of adjusting contract terms or quantities of energy procured.
4. Environmental Impact
   1. Highlight the potential for carbon offset and the positive environmental implications of utilizing virtual PPAs.

Microgrids, a localized group of electricity sources and loads that can disconnect from the traditional grid and operate autonomously, can also play a pivotal role in supporting the clean energy transition. As part of the study, please provide information on the following:

1. Definition and Benefits
   1. Begin by defining microgrids and emphasizing their advantages in terms of energy reliability, resilience, and flexibility.
2. Economic Considerations
   1. Break down the costs of deploying microgrids, including equipment, installation, and maintenance. Additionally, analyze the potential economic benefits, such as energy savings, increased reliability, and potential revenue streams if excess energy is sold back to the main grid. 
3. Technical Analysis
   1. Evaluate the specific technologies involved in microgrid deployment, including distributed energy resources (solar, wind, energy storage), advanced control systems, and potential integration with existing infrastructure.
4. Regulatory Landscape
   1. Delve into the current regulations governing microgrid deployment in Arizona. This should encompass issues such as interconnection standards, utility franchise rights, and any incentives or subsidies available for microgrid development.
5. Case Studies
   1. Provide examples of successful microgrid projects, either within Arizona or in similar regions. These case studies can offer insights into best practices, challenges faced, and strategies to overcome them.
6. Implementation Strategy
   1. Offer a detailed roadmap for the City of Tucson to move forward with microgrid deployment, if deemed feasible. This strategy should consider timelines, potential partners, financing options, and milestones.