Surprise! Opponent of Electric Choice, Which Decried "Out-of-State" Competitive Providers, Seeks OK to Be Bought by Foreign Conglomerate

A utility opposed to electric choice by stressing service by "local companies" in contrast to "out-of-state" competitive providers wants to be taken over by a foreign energy conglomerate.

Specifically, the Board of Directors of UNS Energy Corporation has unanimously approved a definitive merger agreement with Fortis, Inc., Canada's largest investor-owned gas and electric distribution utility, that calls for Fortis to acquire all of the outstanding common stock of UNS Energy for $60.25 per share in cash.

The acquisition would include Arizona utilities Tucson Electric Power and UniSource Energy Services.

During Arizona's recently terminated retail electric choice investigation, Tucson Electric Power railed against "out-of-state providers" seeking to nakedly profit from Arizona customers, in contrast to the "civic-minded local companies" currently serving customers.

Now, however, it must be questioned whether the companies' opposition to electric choice was due solely to their stated rationale in their public comments, or because the introduction of electric choice, by ending monopoly service for generation supply, would have devalued the acquisition by Fortis.

The acquisition requires approval from the Arizona Corporation Commission

In a news release, UNS Energy said that the utilities, "will remain headquartered in Tucson under local control with current management and staffing levels and no planned changes to existing operations or rates."

In any event, the ACC proceeding to review the merger should provide an opportunity to advance competitive interests in Arizona, as such proceedings usually cover a gamut of policies and concessions in order to win approval for the transaction.

While introduction of a wholesale buy-through program at TEP (similar to APS Rate AG-1) had already been contemplated as meriting consideration under the ACC's pseudo-choice alternatives it said it would pursue in closing the full retail choice investigation, it does not appear serious progress on such a program has been made to date. The merger proceeding would be the prime opportunity to press the issue, and to expand the program from what minimal levels were to be originally contemplated.