The Arizona Corporation Commission (ACC) today issued its final written
approval of the acquisition of UNS Energy Corporation (NYSE:UNS) by
Fortis Inc. (TSX:FTS), 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 subsidiaries
Tucson Electric Power (TEP) and UniSource Energy Services (UES) 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.
“TEP and UES will gain new financial strength through this transaction
while preserving local control over utility operations that will
continue to provide our customers with safe, reliable and affordable
service,” said David Hutchens, President and CEO of UNS Energy, TEP and
UES.
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.
“The Commission’s approval affirms the benefits of the merger for
customers of TEP and UES,” said Fortis President Barry Perry, who will
succeed H. Stanley Marshall as the company’s CEO effective December 31,
2014. “We look forward to working with UNS Energy to ensure the
continued operation of sound utilities and the delivery of quality
service to customers.”
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.
About UNS Energy:
UNS Energy is a Tucson, Arizona-based company with consolidated assets
of approximately $4.5 billion. UNS Energy subsidiary Tucson Electric
Power serves approximately 414,000 customers in southern Arizona. UNS
Energy subsidiary UniSource Energy Services provides natural gas and
electric service for approximately 243,000 customers in northern and
southern Arizona. UNS Energy shares are listed on the New York Stock
Exchange and trade under the symbol UNS. To learn more, visit uns.com.
About Fortis:
Fortis is the largest investor-owned electric and gas distribution
utility in Canada, with total assets, prior to the closing of the
acquisition of UNS Energy, of approximately C$18.6 billion and fiscal
2013 revenue exceeding C$4 billion. Its regulated utilities account for
approximately 90% of total assets and serve approximately 2.5 million
customers across Canada and in New York State and the Caribbean. Fortis
owns non-regulated hydroelectric generation assets in Canada, Belize and
Upstate New York. The Corporation's non-utility investment is comprised
of hotels and commercial real estate in Canada. For more information,
visit fortisinc.com or sedar.com.
Forward-Looking Statements
Statements included in this news release and any documents
incorporated by reference which are not historical in nature are
intended to be, and are hereby identified as, “forward-looking
statements” for purposes of the safe harbor provided by Section 21E of
the Exchange Act. Forward-looking statements may be identified by words
including “anticipates,” “intends,” “estimates,” “believes,” “projects,”
“expects,” “plans,” “assumes,” “seeks,” and similar expressions.
Forward-looking statements including, without limitation, those relating
to UNS Energy’s and its subsidiaries’ future business prospects,
revenues, proceeds, working capital, investment valuations, liquidity,
income, and margins, as well as the timing and consequences of the
Fortis acquisition, are subject to certain risks and uncertainties that
could cause actual results to differ materially from those indicated in
the forward-looking statements, due to several important factors,
including those identified from time-to-time in the forward-looking
statements. Those factors include, but are not limited to: the
possibility that various conditions precedent to the consummation of the
Fortis transaction will not be satisfied or waived; the ability to
obtain regulatory approvals of the Fortis transaction on the timing and
terms thereof; state and federal regulatory and legislative decisions
and actions; regional economic and market conditions which could affect
customer growth and energy usage; weather variations affecting energy
usage; the cost of debt and equity capital and access to capital
markets; the performance of the stock market and changing interest rate
environment, which affect the value of our pension and other retiree
benefit plan assets and the related contribution requirements and
expense; unexpected increases in O&M expense; resolution of pending
litigation matters; changes in accounting standards; changes in critical
accounting estimates; the ongoing restructuring of the electric
industry; changes to long-term contracts; the cost of fuel and power
supplies; cyber attacks or challenges to our information security; and
the performance of TEP's generating plants; and certain presently
unknown or unforeseen factors, including, but not limited to, acts of
terrorism. UNS Energy and its subsidiaries undertake no obligation to
update publicly any forward-looking statements, whether as a result of
new information, future events, or otherwise. Given these uncertainties,
undue reliance should not be placed on the forward-looking statements.
Copyright Business Wire 2014