Judges opposes Unisource sale to private companies

Plans for local power company UniSource Energy Corp. to be sold received a second negative ruling this week by advisers to the Arizona Corporation Commission.

Monday's ruling by ACC Administrative Judge Jane Rodda said ratepayers aren't properly protected under the agreement to sell to Kohlberg Kravis Roberts & Co., a private holding company.

The move would in essence take it from a public company with shareholders to a private one without shareholders.

Earlier, the corporation commission staff also recommended against the sale.

Kohlberg Kravis Roberts & Co. has offered about $3 billion for UniSource Energy Corp., parent company of TEP.

The ultimate decision rests with the five-member corporation commission.

UniSource operates electric and gas utilities serving 550,000 customers in Arizona, including in Pima and Santa Cruz counties.

The commission staff's recommendation in May said it didn't think there was adequate protection to customers.

The commission will consider Judge Rodda's ruling. An ACC press release noted that "the commissioners are not bound by Rodda's ruling. They can proposes changes to the recommendation, deny it or accept it as written."

A UniSource press release said it was "shocked and disappointed" by the ruling.

UniSource / TEP is also involved in an effort to build a backup power line to Nogales. The company would also like a 345,000-volt line to deliver power to Mexico.

So far no route has been selected for that large a line. Local opponents are pressing for a smaller line.

jlamb@gvnews.com | 625-5511 x 27