SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of Earliest Event Reported): March 27, 1996
TUCSON ELECTRIC POWER COMPANY
(Exact name of registrant as specified in its charter)
Arizona 1-5924 86-0062700
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
220 West Sixth Street, Tucson, Arizona 85701
(Address of principal executive office) (Zip Code)
(520) 571-4000
(Registrant's telephone number, including area code)
Item 5. Other Events
As previously disclosed in the Company's Annual Report on
Form 10-K filed with the Securities and Exchange Commission
on March 5, 1996, the Company filed an application with the
Arizona Corporation Commission ("ACC") on June 13, 1995
requesting an overall increase in retail rates of 4.9%
(approximately $28.4 million in annual revenues). On
November 30, 1995, the Company reached an agreement with the
Staff of the ACC on a proposal to settle the Company's rate
application. However, such agreement was not approved by
the ACC.
On March 8, 1996, the Company filed with the ACC a
revised settlement agreement (the "Revised Settlement"). On
March 27, 1996, the ACC voted 2-1 to approve the Revised
Settlement with certain modifications and incorporated it
into its Order dated March 29, 1996 (the "ACC Order"). The
ACC Order, among other things, provides the Company with a
one-time rate increase of 1.1 percent (approximately $6.4
million annually) and recognizes all of Unit 2 of the
Springerville Generating Station as "used and useful" for
rate making purposes, such that the Company will be able to
recover all operating and capital costs associated with such
generating unit. The ACC Order is based on a rate of return
of 6.59 percent on a fair value rate base of approximately
$1.36 billion, or 7.72 percent on an original cost rate base
of approximately $1.16 billion. The capital structure
adopted by the ACC for rate making purposes includes 62.5
percent debt and 37.5 percent equity. The approved rate
increase was implemented by the Company on March 31, 1996
for electrical usage on or after such date.
The Revised Settlement and ACC Order also establish a
rate moratorium period for the Company. The Company has
committed not to file for a change in base rates prior to
January 1, 2000, except for conditions or circumstances
which constitute an emergency, or for sharing of benefits
with customers of cost containment efforts where
appropriate, or in the event the Company is acquired or
merged with another company. The Revised Settlement and ACC
Order also contain other provisions relating to the
implementation of time-of-use rates for residential
customers, increased pricing flexibility for commercial and
industrial customers, the consideration of incentive
regulation, and a review of jurisdictional cost allocation
procedures for wholesale sales.
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
TUCSON ELECTRIC POWER COMPANY
(Registrant)
Date: April 4, 1996 Ira R. Adler
-----------------------------------
Ira R. Adler
Senior Vice President and Principal
Financial Officer
