Latest news with #TucsonElectricPower
Yahoo
04-08-2025
- Business
- Yahoo
Fortis Inc (FTS) Q2 2025 Earnings Call Highlights: Strong Financial Performance and Strategic ...
Capital Expenditures: Almost $3 billion during the first half of the year. Earnings Per Share (EPS): $0.76 for the second quarter, a $0.09 increase over the same period last year. Net Earnings: $384 million for the quarter. Year-to-Date EPS: $1.76, reflecting a $0.16 increase over the same period last year. Rate Base Growth: Expected to increase by approximately $14 billion to $53 billion by 2029, supporting an average annual rate-based growth of 6.5%. Debt Raised: Over $1 billion through June to repay borrowings and fund capital programs. Dividend Growth Guidance: Committed to annual dividend growth of 4 to 6% through 2029. Credit Rating: Fitch assigned a first-time TriBB plus credit rating. Regulatory Developments: TEP filed a general rate application with the ACC, and Central Hudson reached a multi-year rate settlement agreement. Warning! GuruFocus has detected 12 Warning Signs with FTS. Release Date: August 01, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Fortis Inc (NYSE:FTS) reported a strong financial performance with a second-quarter earnings per share of $0.76, a $0.09 increase over the same period last year. The company made significant progress on the regulatory front, including Tucson Electric Power's general rate application and Central Hudson's multi-year rate settlement agreement. Fortis Inc (NYSE:FTS) achieved a 34% reduction in scope one greenhouse gas emissions compared to 2019 levels, demonstrating progress in its sustainability efforts. The first phase of the Roadrunner reserve battery storage project was completed, enhancing renewable energy integration with a 200 megawatt energy storage system. The company is on track with its capital plans, expecting rate base growth to increase by approximately $14 billion to $53 billion by 2029, supporting an average annual rate-based growth of 6.5%. Negative Points Regulatory lag offset transmission revenue increases at UNS Energy, impacting earnings growth. Fortis Alberta faced tempered growth due to the expiration of a PVR efficiency mechanism and a lower allowed ROE of 8.97% effective January 1, 2025. Higher finance costs and the timing of income tax recoveries negatively impacted the corporate and other segment. The company faces potential challenges in meeting its 2030 and 2035 interim greenhouse gas targets due to changes in resource planning. The conversion of coal-fired generation to natural gas at the Springerville generating station may not have a material impact on the five-year plan, but it requires careful management of costs and resources. Q & A Highlights Q: Regarding the Arizona data center opportunity, how quickly could you develop generation to support these assets, and is this a key gating factor at this point? A: David Hutchens, President and CEO, explained that the first 300 megawatts will use existing and planned capacity, aiming for a 2027 timeline. Susan Gray, CEO of UNS Energy, added that the second 300 megawatts will go through an all-source RFP process, with the goal to be in service by 2030-2031. Q: When considering your entire system relative to the existing capital plan, are Arizona and ITC the areas with the greatest upside potential? A: David Hutchens confirmed that Arizona and ITC are significant areas of potential growth, but noted that there are opportunities across the entire footprint, including BC related to LNG. Q: Regarding the Springerville conversion, is it fair to assume that the cost of conversion roughly matches some form of renewables storage in your current IRP? A: David Hutchens stated that there are various factors at play, and the conversion is a great affordability story for customers, utilizing existing infrastructure and supporting local jobs. Q: Is there potential for Four Corners to also be converted to gas like Springerville? A: David Hutchens mentioned that while they haven't specifically looked at Four Corners, the repowering of existing coal plants is a consideration, especially with partners like Salt River Project involved. Q: What is the outlook for gas infrastructure in BC, given the push for energy infrastructure in Canada? A: Roger DallAntonia, CEO of FortisBC, noted that BC is embracing LNG opportunities, with ongoing regulatory processes for LNG storage. The Clean BC policy review later this year will be a key indicator for domestic gas infrastructure. Q: Has the pace of discussions with data center companies changed, and how do you view future announcements? A: Susan Gray explained that the data center project has been consistent, with details now being broken into separate sites. David Hutchens added that there is a long queue of projects, and negotiations depend on available capacity. Q: Can you comment on the impact of the recent legislation on Fortis, particularly regarding renewables and ITC? A: David Hutchens stated that there is limited short-term impact from the legislation, with no change in corporate tax. Long-term, the phase-out of renewable energy credits may affect economic outcomes for projects. Q: Is UNS involved in discussions for new interstate pipeline capacity into Arizona, and is there a growing need for this? A: David Hutchens confirmed discussions for the Springerville repowering project, highlighting the partnership with Salt River Project. He noted that future infrastructure needs will be assessed in the next integrated resource plan. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Globe and Mail
04-08-2025
- Business
- Globe and Mail
Fortis Inc. Reports Strong Q2 2025 Financial Results
Fortis ( (FTS)) has released its Q2 earnings. Here is a breakdown of the information Fortis presented to its investors. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Fortis Inc. is a leading North American regulated electric and gas utility company, known for its diversified operations across five Canadian provinces, ten U.S. states, and three Caribbean countries, serving 3.5 million utility customers. In its second quarter of 2025, Fortis reported strong financial results with net earnings of $384 million, or $0.76 per common share, marking an increase from the previous year's $331 million, or $0.67 per share. The company continues to execute its capital plan effectively, with $2.9 billion invested in the first half of the year, keeping it on track to meet its annual capital expenditure target of $5.2 billion. Key financial highlights include a significant rise in net earnings attributed to rate base growth and favorable exchange rates. Fortis also advanced its strategic initiatives, such as the agreement to supply 300 MW to a data center by Tucson Electric Power and the filing of rate applications in Arizona and New York. Additionally, Fortis received a stable BBB+ rating from Fitch Ratings, reflecting its solid financial position. Looking ahead, Fortis remains focused on enhancing shareholder value through its $26 billion five-year capital plan, which aims to increase the rate base significantly by 2029. The company anticipates continued earnings and dividend growth, driven by strategic investments and regulatory proceedings. Overall, Fortis is well-positioned to achieve its long-term objectives, leveraging its diversified portfolio and ongoing growth opportunities to maintain its leadership in the utility sector.
Yahoo
01-08-2025
- Business
- Yahoo
Fortis Inc. Releases Second Quarter 2025 Results
ST. JOHN'S, Newfoundland and Labrador, Aug. 01, 2025 (GLOBE NEWSWIRE) -- Fortis Inc. ("Fortis" or the "Corporation") (TSX/NYSE: FTS), a well-diversified leader in the North American regulated electric and gas utility industry, released its second quarter results.1 Highlights Second quarter net earnings of $384 million or $0.76 per common share, up from $331 million or $0.67 per common share in 2024 Capital expenditures2 of $2.9 billion in the first half of 2025; $5.2 billion annual capital plan on track Load growth opportunities at Tucson Electric Power ("TEP") advanced with an agreement to provide ~300 MW to a data center TEP filed a general rate application seeking new rates in 2026 and an annual rate adjustment mechanism Joint proposal filed with the New York State Public Service Commission for Central Hudson's general rate application Fitch Ratings, Inc. assigned first-time issuer and senior unsecured debt ratings of BBB+ to Fortis with a stable outlook "Our strong results for the first half of 2025 reflect the disciplined execution of our capital plan and regulated growth strategy," said David Hutchens, President and Chief Executive Officer, Fortis. "Coupled with progress on key regulatory proceedings in Arizona and New York, we are well positioned to achieve our key objectives for the year." Net Earnings The Corporation reported net earnings attributable to common equity shareholders ("Net Earnings") of $384 million for the second quarter of 2025, or $0.76 per common share, an increase of $53 million, or $0.09 per common share compared to the second quarter of 2024. The increase was driven by rate base growth across our utilities, including earnings associated with FortisBC Energy's investment in the Eagle Mountain Pipeline project, as well as higher earnings at Central Hudson due to the reset of revenue requirement effective July 1, 2024, and the timing of operating expenses in 2025. The higher U.S. dollar-to-Canadian dollar exchange rate also favourably impacted results. The increase was partially offset by the timing of operating costs, the expiration of a regulatory incentive and a lower allowed rate of return on common equity ("ROE") at FortisAlberta, as well as higher holding company finance costs. On a year-to-date basis, Net Earnings were $883 million, or $1.76 per common share, an increase of $93 million, or $0.16 per common share compared to the same period in 2024. The increase was due to the same factors discussed for the quarter, partially offset by lower earnings at UNS Energy due to lower margin on wholesale sales and higher costs associated with rate base growth not yet reflected in customer rates. The change in earnings per share for both the second quarter and year-to-date periods also reflected an increase in the weighted average number of common shares outstanding, largely associated with the Corporation's dividend reinvestment plan. Capital and Other Growth UpdatesOur $5.2 billion annual capital plan is on track with $2.9 billion invested during the first half of 2025. In July 2025, the Roadrunner Reserve 1 battery storage project was placed in service at TEP. The 200 megawatt ("MW") battery energy storage system will facilitate the integration of renewable energy into the electric grid with the capability to store 800 MW hours of energy, enough to serve approximately 42,000 homes for four hours when deployed at full capacity. TEP has announced that it is planning to convert 793 MW of coal-fired generation at its Springerville Generating Station to natural gas with similar capacity by 2030. The conversion supports customer affordability, local communities, and reliability, and will impact planned investments previously included in TEP's 2023 Integrated Resource Plan and the Corporation's five-year capital plan, including new natural gas generation. This update is not expected to have a material impact on the current five-year capital plan, and Fortis will provide the associated project details with the release of the 2026-2030 capital plan later this year. ____________________ 1 Financial information is presented in Canadian dollars unless otherwise specified. 2 Capital expenditures is a financial measure used by Fortis that does not have a standardized meaning under generally accepted accounting principles in the United States of America ("U.S. GAAP") and may not be comparable with a similar measure presented by other entities. Fortis presents this non-U.S. GAAP measure because management and external stakeholders use it in evaluating the Corporation's financial performance. Refer to the Non-U.S. GAAP Reconciliation provided herein. Subsequent to the end of the second quarter of 2025, TEP entered into an agreement to serve a data center expected to be located in TEP's service territory. The agreement, requiring potential power demand of approximately 300 MW, is subject to approval by the Arizona Corporation Commission ("ACC") and other contractual contingencies. The initial phase of the data center is expected to be operational as early as 2027, with a ramp schedule through 2029. TEP currently expects to serve this customer from its existing and planned capacity, including solar and battery storage projects currently in development. Further negotiations are ongoing for additional capacity to support a full build at the initial site for a total of 600 MW. The developer has also indicated that additional capacity may be required for 500 MW to 700 MW at a second site. Should discussions progress and an agreement be negotiated, additional generation and transmission investments would be required for these subsequent phases. Credit RatingsIn May 2025, Fitch Ratings, Inc. assigned first-time issuer and senior unsecured debt ratings of BBB+ to the Corporation with a stable outlook. Regulatory UpdatesIn June 2025, TEP filed a general rate application with the ACC requesting new rates effective September 1, 2026 using a December 31, 2024 test year, with post-test year adjustments through June 30, 2025. The application includes a US$172 million net increase in retail revenue including savings associated with fuel costs. It also proposes to phase-out or eliminate certain adjustor mechanisms, and requests an annual formulaic rate adjustment mechanism consistent with the ACC's approval of a formula rate policy statement in 2024. In May 2025, Central Hudson filed a joint proposal with the New York State Public Service Commission in relation to its general rate application. The joint proposal provides for a three-year rate plan with retroactive application to July 1, 2025 and continuation of a 9.5% allowed ROE and 48% common equity component of capital structure. An order is expected in the second half of 2025. Sustainability Fortis released its 2025 Sustainability Update Report today, which includes key sustainability performance indicators. The Corporation has made consistent progress to decarbonize its energy mix and deliver cleaner energy to customers, achieving a 34% reduction in scope 1 greenhouse gas ("GHG") emissions through 2024 compared to 2019 levels. The Corporation's ability to achieve its interim GHG emissions reduction targets of 50% by 2030 and 75% by 2035 is expected to be impacted by factors including significant load growth, customer affordability, the pace of development of clean energy technology as well as federal, state and provincial energy policies. While Fortis remains committed to having a coal-free generation mix by 2032 and to the 2050 net-zero goal, the Corporation expects it will take longer to achieve the interim GHG reduction targets. As energy resource planning advances across the utilities, Fortis will reassess the interim targets and will share the results once complete. The 2025 Sustainability Update Report can be accessed at OutlookFortis continues to enhance shareholder value through the execution of its capital plan, the balance and strength of its diversified portfolio of regulated utility businesses, and growth opportunities within and proximate to its service territories. The Corporation's $26.0 billion five-year capital plan is expected to increase midyear rate base from $39.0 billion in 2024 to $53.0 billion by 2029, translating into a five-year compound annual growth rate of 6.5%.3 Fortis expects its long-term growth in rate base will drive earnings that support dividend growth guidance of 4-6% annually through 2029. Planned capital expenditures are based on forecasted energy demand, labour and material costs, and various macro economic factors. The Corporation continues to monitor government policy on foreign trade, including the imposition of tariffs and the potential impacts on the supply chain, commodity prices, the cost of energy and general economic conditions. While it is not possible to predict the impact on the supply chain, business operations or the five-year capital plan, the Corporation does not currently expect a material financial impact in 2025. Beyond the five-year capital plan, opportunities to expand and extend growth include: further expansion of the electric transmission grid in the U.S. to support load growth and facilitate the interconnection of cleaner energy; transmission investments associated with tranches 1, 2.1 and 2.2 of the MISO LRTP as well as regional transmission in New York; grid resiliency and climate adaptation investments; renewable gas and liquefied natural gas infrastructure in British Columbia; and the acceleration of load growth and cleaner energy infrastructure investments across our jurisdictions.____________________ 3 The five-year capital plan reflects an assumed U.S. dollar-to-Canadian dollar exchange rate of 1.30. Fortis estimates that a five-cent increase or decrease in the U.S. dollar relative to the Canadian dollar would increase or decrease capital expenditures by approximately $600 million over the five-year planning period. The five-year compound annual growth rate is calculated using a constant U.S. dollar-to-Canadian dollar exchange GAAP Reconciliation Periods ended June 30 Quarter Year-to-Date ($ millions) 2025 2024 Variance 2025 2024 Variance Capital Expenditures Additions to property, plant and equipment 1,479 1,064 415 2,962 2,135 827 Additions to intangible assets 65 48 17 125 90 35 Adjusting items: Eagle Mountain Pipeline Project4 (109) — (109) (232) — (232) Wataynikaneyap Transmission Power Project5 — 14 (14) — 29 (29) Capital Expenditures 1,435 1,126 309 2,855 2,254 601 About FortisFortis is a well-diversified leader in the North American regulated electric and gas utility industry with 2024 revenue of $12 billion and total assets of $73 billion as at June 30, 2025. The Corporation's 9,800 employees serve utility customers in five Canadian provinces, ten U.S. states and three Caribbean countries. Forward-Looking InformationFortis includes forward-looking information in this media release within the meaning of applicable Canadian securities laws and forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively referred to as "forward-looking information"). Forward-looking information reflects expectations of Fortis management regarding future growth, results of operations, performance and business prospects and opportunities. Wherever possible, words such as anticipates, believes, budgets, could, estimates, expects, forecasts, intends, may, might, plans, projects, schedule, should, target, will, would, and the negative of these terms, and other similar terminology or expressions, have been used to identify the forward-looking information, which includes, without limitation: forecast Capital Expenditures for 2025 and through 2029; the expected benefits of the Roadrunner Reserve I battery storage project; the nature, timing, benefits and impact of the planned conversion of coal-fired generating units at Springerville Generating Station to natural gas-fired generation; the expected timing, outcome and impact of regulatory proceedings; the nature, timing, benefits and impacts of retail load growth opportunities at TEP; the 2030 and 2035 interim GHG emissions reduction targets; the expectation that factors including significant load growth, customer affordability, the pace of development of clean energy technology as well as federal, state and provincial energy policies will impact the Corporation's ability to achieve its interim GHG emission reduction targets; the expectation of having a coal-free generation mix by 2032; the 2050 net-zero direct GHG emissions target; the expectation that the Corporation will take longer to achieve its interim GHG reduction targets; the planned reassessment of the Corporation's interim GHG reduction targets and the timing of associated disclosure; forecast rate base and rate base growth through 2029; the expectation that long-term growth in rate base will drive earnings that support dividend growth guidance of 4-6% annually through 2029; the expectation that government policy on foreign trade, including the imposition of tariffs and the potential impacts on the supply chain, commodity prices, the cost of energy and general economic conditions, will not have a material financial impact in 2025 on the Corporation's business operations or the five-year capital plan; and the expected nature and benefits of opportunities to expand and extend the capital plan. Forward-looking information involves significant risks, uncertainties and assumptions. Certain material factors or assumptions have been applied in drawing the conclusions contained in the forward-looking information, including, without limitation: the successful execution of the capital plan; the continued ability to maintain the performance of the electricity and gas systems; no material capital project and financing cost overrun; sufficient human resources to deliver service and execute the capital plan; the continued availability of natural gas, fuel, coal and electricity supply; reasonable outcomes for regulatory proceedings and the expectation of regulatory stability; no significant variability in interest rates; no material changes in the assumed U.S. dollar-to-Canadian dollar exchange rate; the Board of Directors of the Corporation exercising its discretion to declare dividends, taking into account the business performance and financial condition of the Corporation; no significant operational disruptions or environmental liability or upset; no severe and prolonged economic downturn; no significant changes in government energy plans, environmental laws and regulations that could have a material negative impact; and the realization of additional opportunities beyond the capital plan. Fortis cautions readers that a number of factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking information. For additional information with respect to certain risk factors, reference should be made to the continuous disclosure materials filed from time to time by the Corporation with Canadian securities regulatory authorities and the Securities and Exchange Commission. All forward-looking information herein is given as of the date of this media release. Fortis disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. ____________________ 4 Represents contributions in aid of construction received for the Eagle Mountain Pipeline project. 5 Represents Fortis' 39% share of capital spending during the construction of the Wataynikaneyap Transmission Power project. Construction was completed in the second quarter of 2024. Teleconference and Webcast to Discuss Second Quarter 2025 ResultsA teleconference and webcast will be held on August 1, 2025 at 8:30 a.m. (Eastern) during which David Hutchens, President and Chief Executive Officer and Jocelyn Perry, Executive Vice President and Chief Financial Officer will discuss the Corporation's second quarter financial results. Shareholders, analysts, members of the media and other interested parties are invited to listen to the teleconference via the live webcast on the Corporation's website, Those members of the financial community in Canada and the United States wishing to ask questions during the call are invited to participate toll free by calling 1.833.821.0229. Individuals in other international locations can participate by calling 1.647.846.2371. Please dial in 10 minutes prior to the start of the call. No access code is required. An archived audio webcast of the teleconference will be available on the Corporation's website two hours after the conclusion of the call until September 1, 2025. Please call 1.855.669.9658 or 1.412.317.0088 and enter access code 7967787#. Additional InformationThis news release should be read in conjunction with the Corporation's June 30, 2025 Interim Management Discussion and Analysis and Condensed Consolidated Financial Statements. This and additional information can be accessed at or A .pdf version of this press release is available at: For more information, please contact: Investor Enquiries Media Enquiries Ms. Stephanie Amaimo Ms. Karen McCarthy Vice President, Investor Relations Vice President, Communications & Government Relations Fortis Inc. Fortis Inc. 248.946.3572 709.737.5323 investorrelations@ media@ in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Associated Press
18-06-2025
- Business
- Associated Press
TEP Requests Rate Review to Support Safe, Resilient, Reliable Service
TUCSON, Ariz.--(BUSINESS WIRE)--Jun 17, 2025-- Tucson Electric Power (TEP) has requested regulatory review of new, higher rates that would take effect in September 2026. TEP's proposal would increase typical residential bills by about 14 percent. That would add about $16 per month, on average, for households with median usage of 638 kilowatt-hours (kWh) per month. The month by month impact would be higher in the summer and lower in the winter, and customers who use more energy would see higher impacts. The proposed rates would recover increased costs and necessary investments since 2021, the last year reflected in current rates. TEP has invested about $1.7 billion since then to maintain reliability, improve resiliency and serve customers' expanding energy needs. Key investments: Inflation Impact Consumer prices have increased 15 percent since 2021, impacting all aspects of our business, including labor, services, materials and equipment. TEP has sought to mitigate that impact by leveraging strong relationships with suppliers and working more efficiently whenever possible. 'Keeping our commitment to safe, reliable service has required us to continue reinforcing and modernizing our infrastructure to meet our customers' needs, even as we have been confronted by escalating prices, rising interest rates, strained supply chains and other economic challenges,' Gray said. More Support for Our Most Vulnerable Customers We've proposed updating TEP's Lifeline program, which provides a flat discount to qualifying residential customers, with a tiered structure that offers much larger discounts to the most vulnerable customers. Customers with incomes between 101 percent and 200 percent of the federal poverty level would receive a discount of about 20 percent, or about $25 per month on average. Customers with lower household incomes would receive a 50 percent discount, or about $63 on average. More Gradual Changes TEP's proposed rates include an Annual Rate Adjustment Mechanism that would allow more gradual rate changes in the future. This formula rate mechanism would allow for the elimination of certain other surcharges on TEP's bills. All costs would remain subject to ACC oversight to ensure that only necessary, cost-effective investments and prudently incurred expenses are recovered. Next Steps Today's filing begins an extensive public review process. The Arizona Corporation Commission will set hearing dates and provide other opportunities for public input prior to a decision. More detailed information on our review request, including a video, answers to frequently asked questions, and an infographic of our investments, is available on our website at TEP provides safe, reliable electric service to about 452,000 customers in Southern Arizona. For more information, visit TEP and its parent company, UNS Energy, are subsidiaries of Fortis Inc., a leader in the North American regulated electric and gas utility industry. For more information visit View source version on CONTACT: News Media Contact: Joseph Barrios (520) 884-3725 [email protected] KEYWORD: UNITED STATES NORTH AMERICA ARIZONA INDUSTRY KEYWORD: COAL ALTERNATIVE ENERGY ENERGY OTHER ENERGY UTILITIES SOURCE: Tucson Electric Power Copyright Business Wire 2025. PUB: 06/17/2025 07:30 PM/DISC: 06/17/2025 07:28 PM
Yahoo
17-06-2025
- Business
- Yahoo
TEP Requests Rate Review to Support Safe, Resilient, Reliable Service
At a Glance: Tucson Electric Power has proposed new rates that we project would increase residential customer bills by about 14 percent when they take effect. That would be less than the level of inflation since 2021, the year used to set our current rates. The proposed rates are needed to recover investments in grid upgrades and new energy resources. They also reflect the impact of inflation on the cost of maintaining TEP's top-tier reliability in the face of more extreme weather. TEP can help customers reduce the impact of the proposed rates through energy efficiency programs, rebates and advice available on An expanded low-income assistance program would provide more support to residents who need more help. A Word from President and CEO Susan Gray: "We know our customers count on us every day for the energy that powers their lives. They also need us to keep our bills as low as possible, which is why we work so hard to control costs and why our proposal is focused on increasing support for our most vulnerable customers. Our proposed rates reflect those efforts as well as cost-effective investments in a modern, resilient grid and a secure energy supply to ensure reliable, affordable service around the clock, all year long." TUCSON, Ariz., June 17, 2025--(BUSINESS WIRE)--Tucson Electric Power (TEP) has requested regulatory review of new, higher rates that would take effect in September 2026. TEP's proposal would increase typical residential bills by about 14 percent. That would add about $16 per month, on average, for households with median usage of 638 kilowatt-hours (kWh) per month. The month by month impact would be higher in the summer and lower in the winter, and customers who use more energy would see higher impacts. The proposed rates would recover increased costs and necessary investments since 2021, the last year reflected in current rates. TEP has invested about $1.7 billion since then to maintain reliability, improve resiliency and serve customers' expanding energy needs. Key investments: Energy grid upgrades and technology improvements: TEP operates a large, complex system that serves more than 452,000 customers and spans 1,155 square miles. Maintaining reliability requires ongoing maintenance and upgrades to approximately 5,100 miles of transmission and distribution lines, more than 4,300 miles of underground distribution lines, more than 107,000 poles and transmission structures, and more than 120 substations. Our proposed rates reflect more than $900 million invested since 2021 in critical infrastructure, communications equipment and other technologies that have helped TEP achieve top-tier reliability metrics for 12 years straight. Reliability reserve: TEP's new Roadrunner Reserve battery energy storage system will begin commercial operations this month, helping us provide reliable, affordable energy during peak usage periods. This 200-megawatt, 800 megawatt-hour system in southeast Tucson will allow expanded use of clean, affordable solar energy while helping to protect customers from fuel price volatility, keeping rates more stable over time. The proposed rates would recover about $350 million invested in this critical new energy resource. A more secure system. The proposed rates reflect recent investments in new IT systems and upgrades that support smart grid operations and TEP's expanded participation in regional energy markets. They also support safer, more secure facilities to protect against increasing physical- and cyber-security threats. Inflation Impact Consumer prices have increased 15 percent since 2021, impacting all aspects of our business, including labor, services, materials and equipment. TEP has sought to mitigate that impact by leveraging strong relationships with suppliers and working more efficiently whenever possible. "Keeping our commitment to safe, reliable service has required us to continue reinforcing and modernizing our infrastructure to meet our customers' needs, even as we have been confronted by escalating prices, rising interest rates, strained supply chains and other economic challenges," Gray said. More Support for Our Most Vulnerable Customers We've proposed updating TEP's Lifeline program, which provides a flat discount to qualifying residential customers, with a tiered structure that offers much larger discounts to the most vulnerable customers. Customers with incomes between 101 percent and 200 percent of the federal poverty level would receive a discount of about 20 percent, or about $25 per month on average. Customers with lower household incomes would receive a 50 percent discount, or about $63 on average. More Gradual Changes TEP's proposed rates include an Annual Rate Adjustment Mechanism that would allow more gradual rate changes in the future. This formula rate mechanism would allow for the elimination of certain other surcharges on TEP's bills. All costs would remain subject to ACC oversight to ensure that only necessary, cost-effective investments and prudently incurred expenses are recovered. Next Steps Today's filing begins an extensive public review process. The Arizona Corporation Commission will set hearing dates and provide other opportunities for public input prior to a decision. More detailed information on our review request, including a video, answers to frequently asked questions, and an infographic of our investments, is available on our website at TEP provides safe, reliable electric service to about 452,000 customers in Southern Arizona. For more information, visit TEP and its parent company, UNS Energy, are subsidiaries of Fortis Inc., a leader in the North American regulated electric and gas utility industry. For more information visit View source version on Contacts News Media Contact:Joseph Barrios(520) 884-3725jbarrios@
