UNITED STATES
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): June 25, 1998
Commission Registrant; State of Incorporation; IRS Employer
File Number Address; and Telephone Number Identification Number
- ----------- ----------------------------- ---------------------
1-13739 UNISOURCE ENERGY CORPORATION 86-0786732
(An Arizona Corporation)
220 West Sixth Street
Tucson, AZ 85701
(520) 571-4000
1-5924 TUCSON ELECTRIC POWER COMPANY 86-0062700
(An Arizona Corporation)
220 West Sixth Street
Tucson, AZ 85701
(520) 571-4000
<PAGE>
Item 5. Other Events
On June 25, 1998, the Arizona Corporation Commission (ACC)
Staff issued a First Draft of Proposed Revisions of the Retail
Electric Competition Rules. As previously disclosed, the Retail
Electric Competition Rules, adopted in December 1996, phase-in
the state's electric industry to generation competition beginning
January 1, 1999. The Affected Utilities (such as TEP, Arizona
Public Service, Citizens Utilities Company, and several electric
cooperatives) and other interested parties, were asked to provide
comments on the Proposed Revisions by July 6, 1998. The ACC
Staff issued a Second Draft for review on July 10, 1998 and is
expected to issue its final revisions to the Retail Electric
Competition Rules by July 24, 1998.
The Proposed Revisions (as outlined in the draft of July 10,
1998) include the following:
- -- Each Affected Utility shall make available at least 20% of
its 1995 system retail peak demand for competitive generation
supply as follows: (1) All Affected Utility customers with non-
coincident peak demand load of 1 MW or greater will be eligible
for competitive electric services no later than January 1, 1999.
(2) Groups of Affected Utility customers with individual non-
coincident peak load demands of 40 kW or greater aggregated into
a combined load of 1 MW or greater will also be eligible for
competitive service no later than January 1, 1999. Each Affected
Utility shall also offer a residential phase-in program with a
minimum of 1/2 of 1% of residential customers having access to
competitive electric services on January 1, 1999, with the number
of customers eligible in this program to increase by 1/2 of 1%
every quarter until January 1, 2001. All retail customers shall
be entitled to obtain competitive electric services no later than
January 1, 2001.
- -- Each Affected Utility shall file a report detailing possible
mechanisms to provide benefits, such as rate reductions of 3% -
5%, to all customers determined not to be eligible for
competitive electric services directly or through aggregation.
- -- Each Affected Utility shall make available to all customers
in its service area Standard Offer bundled services at regulated
rates. After January 1, 2001, Standard Offer service shall be
provided by Utility Distribution Companies (UDCs), who shall also
act as providers of last resort.
- -- The Affected Utilities shall provide non-discriminatory open
access to transmission and distribution facilities to serve all
customers. The ACC supports the development of an Independent
system Operator (ISO) or, absent an ISO, an Independent
Scheduling Administrator (ISA).
- -- An Affected Utility shall divest itself of all competitive
generation assets and services prior to January 1, 2001. Such
divestiture shall either be to an unaffiliated party or to a
separate corporate affiliate or affiliates. If an Affected
Utility chooses to divest its competitive generation assets to a
competitive electric affiliate, such transfer shall be at a value
determined by the ACC to be fair and reasonable.
We expect that the Revised Rules will be submitted to the
ACC for consideration at an Open Meeting in the third quarter of
1998. The Company and TEP cannot predict whether the ACC Staff
will make further revisions to the Draft or whether the ACC will
approve or modify the Proposed Revisions of the Retail Electric
Competition Rules.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, each registrant has duly caused this
report to be signed on its behalf by the undersigned
thereunto duly authorized. The signature for each
undersigned company shall be deemed to relate only to
matters having reference to such company or its subsidiary.
UNISOURCE ENERGY CORPORATION
----------------------------
(Registrant)
Date: July 16, 1998
Ira R. Adler
----------------------------
Ira R. Adler
Executive Vice President and
Principal Financial Officer
TUCSON ELECTRIC POWER COMPANY
-----------------------------
(Registrant)
Date: July 16, 1998
Ira R. Adler
-----------------------------
Ira R. Adler
Executive Vice President and
Principal Financial Officer
