Under terms of Fortis’ August 2014 acquisition of UNS Energy Corporation, customers of TEP and sister company UniSource Energy Services (UES) will receive bill credits totaling $30 million over five years. Savings totaling $10 million will be applied in year one, and $5 million will be applied annually over the next four years.

TEP will apply these credits to the monthly Customer Charge on bills issued from October through March. The resulting savings will range from $1.07 per month for residential customers to more than $200 per month for the largest commercial and industrial customers. Additional credits will be applied through temporary reductions in usage-based charges from October 2014 through March 2015; their impact will vary with consumption.

Monthly Acquisition Bill Credits for Residential Customers
Credit applied
to monthly
Customer Charge
Average credit applied
to monthly Purchase
Power and Fuel
Adjustment Charge
Total monthly
bill credits
October 2014 — March 2015 $1.07 $0.56 $1.63
October 2015 — March 2016 $1.07 n/a $1.07
October 2016 — March 2017 $1.07 n/a $1.07
October 2017 — March 2018 $1.07 n/a $1.07
October 2018 — March 2019 $1.07 n/a $1.07
* This amount is based on average monthly usage of 700 kilowatt hours from October 1, 2014 to March 31, 2015.

These bill credits represent the only direct impact on rates that will result from the acquisition. TEP will not seek to recover any transaction-related costs in future rates. The Arizona Corporation Commission will continue to set the company rates based on the costs incurred to provide safe, reliable service.