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Tucson Electric Bills to Rise if Surcharge is Reset
Tucson Electric Bills to Rise if Surcharge is Reset

April 06, 2014 12:00 am  •  By David Wichner Arizona Daily Star -- Tucson Electric Power Co. customers will likely see their monthly bills rise a few dollars, as state regulators reset a financial mechanism linked to fuel and purchased-power costs.

TEP has asked for a new adjustment rate starting April 10 that will add about $3 to the average monthly residential bill.

The Arizona Corporation Commission this week will consider resetting the existing TEP bill adjustment — formally known as the Purchased Power and Fuel Adjustment Clause — which is designed to pass through to customers the fluctuating market costs of fuel and power purchased by the utility.

As part of TEP’s last rate case approved by the commission in June — which initially added about $4 per month to the average home bill — the company was required to file proposed new rates for the fuel and purchased-power adjustment.

The adjustment mechanism generally appears as a surcharge on customers’ bills, though it may be set as a negative rate to credit customers when collections have run ahead of actual costs.

The requested increase is needed mainly due “to higher-than-anticipated natural gas prices and lower-than-expected retail sales,” TEP said in a filing with the commission in February.

Natural gas prices paid by electric-power producers across the U.S. fell to a decade-low average of $2.81 per thousand cubic feet in April 2012, but rose to $4.86 by January 2013 and had jumped to $7.46 in January of this year, according to the U.S. Energy Information Administration.

“There’s no markup on the cost of fuel, it’s a straight pass-through,” TEP spokesman Joe Barrios said of the fuel and purchased-power adjustment. “There’s no profit (for TEP) tied to the surcharge.”

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Four Corners Plant Looks to Expand Nearby Coal-Mining
Four Corners Power Plant Looks to Expand Nearby Coal-Mining

By Colton Gavin Cronkite News Service, www.azstarnet.com, April 1, 2014 -- Conservation groups are worried that a proposed expansion of coal mining at the Four Corners Power Plant could reverse recent environmental gains at the plant, which last year was on a list of the dirtiest in the country.

But officials with Arizona Public Service, which is a majority owner in the plant, said the proposal is a step forward for the plant both economically as well as environmentally.

“We have reduced our coal burning by a third,” APS spokesman Damon Gross said of the coal-burning plant near Farmington, N.M. “Getting more (coal) from another location won’t affect how much our plant burns.”

The proposal seeks to expand surface coal mining operations on 2,744 acres of the proposed Pinabete Permit area, with an eye toward providing 5.8 million tons of low-sulfur coal a year to the plant for 25 years, beginning in 2016. The plan was posted in Friday’s Federal Register in a draft environmental impact statement by the Office of Surface Mining Reclamation and Enforcement.

Gross said the plan is the result of a lengthy research process on how to best improve on the prospects of the plant after the lease on the coal-rich lands owned by the Navajo Nation was extended to 2041. The plan will be the subject of a series of public hearings from late April to early May in Arizona, New Mexico and Colorado.

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APS: Energy From Renewable Sources Will Double in Next 15 Years
APS: Energy From Renewable Sources Will Double in Next 15 Years

Hayley Ringle, Phoenix Business Journal, April 1, 2014 -- Arizona Public Service Co. is forecasting energy from renewable sources will double during the next 15 years, and natural gas will be the new energy source of choice. In addition, advanced technology will change the electricity grid as customers have even more choices for their energy use.

APS released its official 15-year planning forecast, the “2014 Integrated Resource Plan,” to the Arizona Corporation Commission at 5 p.m. today. The report is put together every two years. See an executive summary of the report here.

The goal is to find ways to continue to provide reliable electricity to customers while upgrading the grid to handle the new technology advances.

The state’s energy needs are projected to grow by 52 percent in the next 15 years. However, the report found savings from energy efficiency measures, which are intended to reduce customer demand, are expected to triple by 2029.

APS envisions flexible generation and a more modern grid to ensure a steady and reliable energy supply, with a need for more generating plants to quickly respond to customer demand changes from renewable energy, said Jim Wilde, APS’ director of resource planning.

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UNS Energy Shareholders Approve Acquisition by Fortis
  UNS Energy Shareholders Approve Acquisition by Fortis

TUCSON, Ariz.--(BUSINESS WIRE) March 26, 2014 -- Shareholders of UNS Energy Corporation (NYSE:UNS) voted overwhelmingly today to approve the proposed acquisition of the company by a subsidiary of Fortis Inc. (TSX:FTS).

The votes were tabulated at today’s special meeting for shareholders at UNS Energy’s Corporate Headquarters in Tucson. Approximately 97 percent of the ballots cast supported the company’s acquisition by Fortis, the largest investor-owned gas and electric distribution utility company in Canada.

“Today’s vote is a positive step toward a new partnership that will provide benefits for shareholders, customers, employees and the communities we serve. Joining Fortis will provide additional financial strength to help us maintain safe, reliable service throughout Arizona,” said Board Chair and CEO Paul J. Bonavia.

The merger agreement provides that Fortis will acquire all of the outstanding common stock of UNS Energy for $60.25 per share in cash. The $4.3 billion transaction, which includes the assumption of approximately $1.8 billion in debt, would provide additional capital and new resources for UNS Energy’s subsidiaries, including Tucson Electric Power (TEP) and UniSource Energy Services (UES). Both companies will remain headquartered in Tucson under local control with current management and staffing levels and no planned changes to existing operations or rates.

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