Profile: UNS Energy Corp (UNS)

UNS on New York Consolidated

60.17USD
15 Apr 2014
Price Change (% chg)

$0.11 (+0.18%)
Prev Close
$60.06
Open
$60.09
Day's High
$60.17
Day's Low
$59.98
Volume
528,683
Avg. Vol
350,550
52-wk High
$60.57
52-wk Low
$42.51

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UniSource Energy Corporation (UniSource Energy), incorporated in 1995, is a holding company. The Company owns the outstanding common stock of Tucson Electric Power Company (TEP), UniSource Energy Services, Inc. (UES), UniSource Energy Development Company (UED), and Millennium Energy Holdings, Inc. (Millennium). It operates in three segments: TEP, UNS Gas, Inc. (UNS Gas) and UNS Electric, Inc. (UNS Electric). TEP is an electric utility serving the community of Tucson, Arizona. UNS Gas is a gas distribution company serving approximately 148,000 retail customers in Mohave, Yavapai, Coconino, and Navajo counties in northern Arizona, as well as Santa Cruz County in southeastern Arizona. UNS Electric is a vertically integrated electric utility company serving approximately 91,000 retail customers in Mohave and Santa Cruz counties. UES provides gas and electric service to more than 30 communities in northern and southern Arizona through its two operating subsidiaries, UNS Gas and UNS Electric. In July 2011, UNS Electric purchased the Black Mountain Generating Station (BMGS) from UED.

TEP

During the year ended December 31, 2011, TEP’s electric utility operations contributed 77% of UniSource Energy’s operating revenues and consisted of 82% of its assets. TEP is a vertically integrated utility that provides regulated electric service to approximately 404,000 retail customers in southeastern Arizona. TEP’s service territory covers 1,155 square miles and includes a population of approximately one million people in the greater Tucson metropolitan area in Pima County, as well as parts of Cochise County. TEP also sells electricity to other utilities and power marketing entities in the western United States. TEP provides electric utility service to a diverse group of residential, commercial, industrial, and public sector customers. Industries served include copper mining, cement manufacturing, defense, health care, education, military bases and other governmental entities.

TEP’s electric utility operations include the wholesale marketing of electricity to other utilities and power marketers. Wholesale sales transactions are made on both a firm and interruptible basis. Wholesale sales consist primarily of long-term wholesale sales and short-term sales. Springerville Unit 1 is leased by TEP and Unit 2 is owned by San Carlos Resources Inc. (San Carlos), a wholly owned subsidiary of TEP. TEP’s other interests in the Springerville Generating Station (Springerville) include the Springerville Coal Handling Facilities and the Springerville Common Facilities. The Sundt Generating Station and the internal combustion turbines located in Tucson are designated as must-run generation facilities. As of December 31, 2011, TEP’s owned photovoltaic (PV) solar generating capacity totaled 13 megawatt. The Springerville Generating Station solar system, which is located near TEP’s Springerville coal-fired facility in eastern Arizona, includes 43,380 PV modules, with a total capacity of six megawatt. TEP’s remaining seven megawatt of PV solar generating capacity is located in the city of Tucson.

Springerville Units 3 and 4 are each approximately 400 megawatt coal-fired generating facilities that are operated, but not owned by TEP. These facilities are located at the same site as TEP’s Springerville Units 1 and 2. TEP’s principal fuel for electric generation is low-sulfur, bituminous or sub-bituminous coal from mines in Arizona, New Mexico and Colorado. TEP is the operator, and sole owner (or lessee), of the Springerville Units 1 and 2 and Sundt Unit 4. The coal supplies for Springerville Units 1 and 2 are transported approximately 200 miles by railroad from northwestern New Mexico. The coal supplies for Sundt are transported approximately 1,300 miles by railroad from Colorado. TEP also participates in jointly-owned, coal-fired generating facilities at the Four Corners Generating Station (Four Corners), the Navajo Generating Station (Navajo) and the San Juan Generating Station (San Juan). Four Corners, which is operated by Arizona Public Service (APS), and San Juan, which is operated by Public Service Company of New Mexico (PNM), are mine-mouth generating stations located adjacent to the coal reserves. Navajo, which is operated by Salt River Project Agricultural Improvement and Power District (SRP), obtains its coal supply from a nearby coal mine and a dedicated rail delivery system.

TEP purchases gas from Southwest Gas Corporation under a retail tariff for North Loop’s 95 megawatts of internal combustion turbines and receives distribution service under a transportation agreement for DeMoss Petrie, a 75 megawatt internal combustion turbine. TEP purchases capacity from El Paso Natural Gas Company (EPNG) for transportation from the San Juan and Permian Basins to its Sundt plant under a contract that expires in April 2013. TEP also buys gas from third-party suppliers for H. Wilson Sundt Generating Station (Sundt) and DeMoss Petrie. TEP purchases gas transportation for Luna Energy Facility (Luna) from EPNG from the Permian Basin to the plant site under an agreement effective through January 2017. TEP purchases gas for its share of Luna from various suppliers in the Permian Basin region. TEP has transmission access and power transaction arrangements with over 120 electric systems or suppliers. TEP is participating in the continuation of the 500 kilovolt transmission line from the Pinal West substation to the Pinal Central substation.

TEP’s transmission facilities, located in Arizona and New Mexico, transmit the output from TEP’s remote electric generating stations at Four Corners, Navajo, San Juan, Springerville and Luna to the Tucson area for use by TEP’s retail customers. The transmission system is interconnected at various points in Arizona and New Mexico with other regional utilities. TEP has arrangements with approximately 140 companies to interchange generation capacity and transmission of energy. As of December 31, 2011, TEP owned or participated in an overhead electric transmission and distribution system consisting of: 512 circuit-miles of 500- kilovolt lines, 1,088 circuit-miles of 345- kilovolt lines, 405 circuit-miles of 138- kilovolt lines, 479 circuit-miles of 46- kilovolt lines and 2,615 circuit-miles of lower voltage primary lines. TEP’s underground electric distribution system includes 4,389 cable-miles. TEP owns approximately 76% of the poles on which its lower voltage lines are located. Electric substation capacity consists of 103 substations with a total installed transformer capacity of 13,266,850 kilovolt amperes.

UNS Gas, Inc.

The Mohave, Yavapai, Coconino, and Navajo counties in northern Arizona, and Santa Cruz County in southeastern Arizona consist of approximately 50% of the territory in the state of Arizona, with a population of approximately 700,000. UNS Gas’ customer base is primarily residential. Sales to residential customers provided approximately 60% of total revenues, during 2011, while sales to other retail customer classes accounted for about 36% of total revenues. UNS Gas directly manages its gas supply and transportation contracts. UNS Gas buys most of the gas it distributes from the San Juan Basin in the Four Corners region. The gas is delivered on the EPNG and Transwestern Pipeline Company (Transwestern) interstate pipeline systems under firm transportation agreements.

With EPNG, the average daily capacity right of UNS Gas is approximately 655,000 therms per day, with an average of 1,095,000 therms per day in the winter season (November through March) to serve its northern and southern Arizona service territories. UNS Gas has capacity rights of 250,000 therms per day on the San Juan Lateral and Mainline of the Transwestern pipeline. The Transwestern pipeline principally delivers gas to the portion of UNS Gas’ distribution system serving customers in Flagstaff and Kingman and also the Griffith Power Plant in Mohave County. UNS Gas signed a separate agreement with Transwestern for transportation capacity rights on the Phoenix Lateral Extension Line. UNS Gas’ average daily capacity right is 126,100 therms per day, with an average of 221,900 therms per day in the winter season (November through March). As of December 31, 2011, UNS Gas’ transmission and distribution system consisted of approximately 31 miles of steel transmission mains, 4,220 miles of steel and plastic distribution piping, and 137,160 customer service lines.

UNS Electric, Inc.

The Mohave and Santa Cruz counties have a combined population of approximately 240,000. UNS Electric’s customer base is primarily residential, with some small commercial and both light and heavy industrial customers. UNS Electric owns and operates BMGS, a 90 megawatt gas-fired facility located near Kingman, Arizona. In July 2011, UNS Electric purchased BMGS from UED. UNS Gas purchases and transports natural gas to BMGS for UNS Electric under long-term natural gas transportation and sales agreements. UNS Electric also owns and operates the Valencia Power Plant (Valencia), located in Nogales, Arizona. Valencia consists of four gas and diesel-fueled combustion turbine units and provides approximately 62 megawatt of peaking resources. The facility is directly interconnected with the distribution system serving the city of Nogales and the surrounding areas.

UNS Electric imports the power generated at BMGS into its Mohave County and Santa Cruz County service territories over Western Area Power Administration’s (WAPA) transmission lines. UNS Electric has a network transmission service agreement for its primary transmission capacity with WAPA for the Parker-Davis system that expires in August 2016. UNS Electric also has a long-term electric point-to-point transmission capacity agreement with WAPA for the Southwest Intertie system that expires in June 2016. As of December 31, 2011, UNS Electric’s transmission and distribution system consisted of approximately 56 circuit-miles of 115- kilovolt transmission lines, 274 circuit-miles of 69- kilovolt transmission lines, and 3,616 circuit-miles of underground and overhead distribution lines. UNS Electric also owns the 65 megawatt Valencia plant, the 90 megawatt Black Mountain Generating Station (BMGS), as well as 39 substations having a total installed capacity of 1,494,000 kilovolt amperes.

Company Address

UNS Energy Corp

88 EAST BROADWAY
TUCSON   AZ   85701
P: +1520.5714000
F: +1520.7702089

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