Tucson Electric Power Receives Decision in General Rate Application

Rhea-AI Summary

Fortis Inc. announces the Arizona Corporation Commission has approved new rates for Tucson Electric Power's general rate application, effective January 1, 2021. The approved rate base is US$2.7 billion, with US$1.2 billion invested since the last rate order. The allowed return on equity is now 9.15%, down from 9.75%. TEP is focused on upgrading its systems to accommodate population growth and customer needs while transitioning to renewable energy resources.

Positive

• New rates approved by ACC support reliable service in Tucson.
• Investment of US$1.2 billion enhances infrastructure for growth.
• Transition to renewable energy aligns with sustainability goals.

Negative

• Return on equity reduced from 9.75% to 9.15%, impacting profitability.

ST. JOHN'S, Newfoundland and Labrador, Dec. 23, 2020 (GLOBE NEWSWIRE) -- Fortis Inc. ("Fortis" or the "Corporation") (TSX/NYSE: FTS) today announced that the Arizona Corporation Commission ("ACC") has approved new rates in Tucson Electric Power's ("TEP") general rate application effective January 1, 2021.

The ACC approved rate base of US$2.7 billion, including approximately US$1.2 billion invested since the last rate order. The ACC also approved an allowed return on equity of 9.15% and equity capital structure of 53% compared to an allowed return on equity and equity capital structure previously of 9.75% and 50%, respectively. The decision includes a 0.20% return on the fair value increment.

TEP has been upgrading its transmission and distribution systems to serve the Tucson area's expanding population, support economic growth and meet its customers' evolving energy needs. TEP investments provide safe and reliable service to customers while transitioning to a cleaner, more flexible and resilient energy portfolio.  

Yesterday's decision supports reliable, sustainable and affordable service to customers in Tucson, Arizona. As TEP embarks on a cleaner energy future and shifts to renewable generating resources, customers will benefit from this energy transition while realizing continued reliability and affordability.

About Fortis
Fortis is a well-diversified leader in the North American regulated electric and gas utility industry, with 2019 revenue of $8.8 billion and total assets of $56 billion as at September 30, 2020. The Corporation's 9,000 employees serve utility customers in five Canadian provinces, nine U.S. states and three Caribbean countries.

Fortis shares are listed on the TSX and NYSE and trade under the symbol FTS. Additional information can be accessed at www.fortisinc.com, www.sedar.com, or www.sec.gov.

For further information contact
Investor Enquiries:
Ms. Stephanie Amaimo
Vice President, Investor Relations
Fortis Inc.
248.946.3572
investorrelations@fortisinc.com

Media Enquiries:
Ms. Karen McCarthy
Vice President, Communications and Corporate Affairs
Fortis Inc.
709.737.5323
media@fortisinc.com

A pdf version of this press release is available at: http://ml.globenewswire.com/Resource/Download/6331a711-0e96-400a-ae4f-6a16dcd70767

 

FAQ

What are the new rates for Tucson Electric Power effective January 1, 2021?

The new rates approved by the Arizona Corporation Commission are part of a US$2.7 billion rate base.

What is the allowed return on equity for Tucson Electric Power?

The allowed return on equity has been set at 9.15%, down from 9.75%.

How much investment has been made by TEP since the last rate order?

TEP has invested approximately US$1.2 billion since the last rate order.

What benefits does the new rate decision provide to TEP customers?

The decision supports reliable, sustainable, and affordable service for customers in Tucson.

What is Fortis's stock symbol?

Fortis's stock symbol is FTS, listed on both TSX and NYSE.