The Price of Power

Posted on Jul 18 in Blog, Buyers/Sellersby CarlPrint

Click on photo for enlargement. House shown, on 80 acres adjoining state land, is for sale here.

The Good News Is That It’s Going To Be Dropping

Our office loves off-grid listings and we prefer the sweet taste of free juice when possible, but traditional wired power dominates and availability is one of the first concerns a buyer has when shopping for a parcel of land.

For the past few years, getting a power line extended to a parcel has been costly. This affects land transactions in that some parcels have needed a large additional investment to bring electrical service the last few hundred feet, so buyers may be held back once they talk to their local utility about those costs. The other side is that sellers are sometimes stuck with land that won’t sell because of those costs.

The good news is that it wasn’t always that way, and that it’s going back to being cheaper or even free in some cases. Here’s more from Nicole LaSlavic, the Government Affairs Director of the Arizona Association of Realtors:

This week the Arizona Corporation Commission voted in a 4-1 decision to reinstate free power-line extension to new customers within 500 feet of Tucson’s Electric Power Companies distribution system. This decision comes after much uproar from Arizona residents after the long standing “line extension” policy was eliminated for Tucson Electric Power (TEP) and UniSource Electric (UNS Electric) in 2008. To note, in 2007 the Arizona Corporation Commission eliminated a policy of more than 50 years that required Arizona Public Source (APS) to extend power lines at no cost to any development within 1,000 feet and up to $25,000. The reversal of all three of these policies left many landowners with unforeseen costs that reduced the value of their properties.

The Arizona Association of REALTORS® witnessed firsthand the negative impact the reversal of these policies had on our members and homeowners throughout the state. As a result, AAR has worked diligently with members of the public, stakeholders and Commissioners to revert to the pre-2007 line extension policies, for TEP, UNS Electric and APS. As many will recall, we were successful in our endeavors this past January when the Corporation Commission voted 3-2 to reinstate the line extension policy for UniSource Electric, which serves customers in Western Arizona. In regards to APS, we continue to inch closer to a resolution as it pertains to reinstating a line extension policy under a rate case filed last month.

The reversal of Tucson’s Electric Power Co. 500 feet free line extension policy should take full effect in 30 days and will allow those with uncompleted contracts to come back in and benefit from the new rules.

Note that the reversal is taking place already in some areas, but not for APS customers just yet. Please check back to this article or call the office and we’ll be very happy to let you know when it does go through. APS assures us that they are in the game on this one. We think it will be good for all parties involved, as power utilities will have access to customers who were previously priced out of the market.

Also, this means that several of our listed parcels will now be easier to power up. If you’ve been holding back because of those costs, now is the time to dust off those ideas and give us a call. Buying or selling, this dramatic change will benefit you.