UniSource Energy Corporation (NYSE: UNS) today reported first quarter 2012 net income of $6.5 million, or $0.17 per share of common stock on a fully diluted basis, compared with $13.5 million, or $0.35 per diluted share in the same period last year.
“We anticipated weaker financial results this year as we enter the final year of TEP’s current base rate freeze. We remain disciplined in controlling operating expenses, however costs related to utility system investments, the impact of energy efficiency programs, and slow economic recovery will continue to put pressure on our financial performance,” said Paul Bonavia, UniSource Energy’s Chairman and Chief Executive Officer. “A key area of focus over the next 15 months is TEP’s upcoming rate filing with the Arizona Corporation Commission.”
The current rates paid by TEP customers are based on 2006 expense levels and were established as part of a settlement agreement that was approved by the Arizona Corporation Commission (ACC) in November 2008. That agreement keeps TEP’s non-fuel base rates frozen through at least December 31, 2012. In April, TEP filed a notice with the ACC indicating that it intends to file a rate case application on or about July 2, 2012.
“Since 2006, we have invested between $400 and $500 million across TEP’s utility system to enhance service reliability and safety, expand our solar generating portfolio, and comply with environmental mandates. We are filing this rate case so that TEP can recover its full cost of service, including an appropriate return on invested capital,” Bonavia said.Tucson Electric Power Retail kWh Sales and Revenues TEP’s retail kWh sales decreased by 1.9 percent in the first quarter, due in part to lower demand from industrial customers and a 13.7 percent decrease in heating degree days compared with the first quarter of 2011. The decline in retail sales volumes led to a $3.3 million, or 3.0 percent, decrease in TEP’s retail margin revenues compared with the first three months of 2011.