The Arizona Corporation Commission today issued its final written approval of the acquisition of UNS Energy Corp. by Fortis Inc., Canada’s largest investor-owned electric and gas distribution utility holding company.
By a unanimous vote, the ACC concluded the acquisition will serve the public interest by generating benefits for UNS Energy unit Tucson Electric Power (TEP) and UniSource Energy Services and their customers. Both companies will have stronger balance sheets and improved access to capital, while customers will receive bill credits totaling $30 million over five years under terms of a settlement approved by the ACC.
The ACC’s vote came just seven months after TEP and Fortis filed a request for review and approval of the $4.3 billion acquisition, which includes the assumption of $1.8 billion in debt. Now that all necessary regulatory approvals have been secured, the transaction is expected to be completed before the end of August.
Under terms of the settlement approved by the ACC, TEP and UES will remain headquartered in Tucson under local control with current management and staffing levels. The settlement includes provisions intended to protect each regulated utility and its customers, including a requirement that UNS Energy be overseen by an independent board of directors, a majority of whom are Arizona residents.
Once the transaction is completed, TEP and UES will proceed with plans to apply “acquisition credits” to customers’ bills from October through March for the next five years. The resulting savings will range from about $1 per month for residential customers to $200 per month for the largest commercial and industrial customers. Additional first-year savings will be realized through temporary reductions in usage-based charges from October 2014 through March 2015; those savings will vary with consumption.