TO: EDITORS, NEWS DIRECTORS

DATE: April 15, 1999

FOR: IMMEDIATE RELEASE

CONTACT: Perry Baker (602) 542-0844

COMMISSION ADOPTS NEW RULES FOR ELECTRIC COMPETITION

The Arizona Corporation Commission held one of its most productive open meetings yesterday, passing a sweeping set of rules that will help bring about true retail competition in the electric energy arena.

The Commission approved the commencement of a process by which utilities will make filings for stranded costs - those costs incurred under regulated system that can not be recovered in a competitive market. After a June 14th deadline for filing their recovery plans, there will be public hearings throughout the state to gain consumer input into the plans.

The Commissioners also adopted proposed amendments to the original rules that had been put on hold last January. This action will start a three to four month formal rule making process, including extensive public hearings, fulfilling the promise of due process and openness that was given to the public after complaints surfaced that the original rules did not contain enough citizen participation.

After setting in motion the plans to formalize the rule making process, the ACC approved the certification of the new competitive affiliates of Arizona Public Service and Tucson Electric Power, allowing them to begin operating in Salt River Project territory immediately. After the new rules have been approved, these firms will be able to compete anywhere in Arizona.

The three Commissioners also voted to commence a hearing process that will consider the adoption of a renewable energy portfolio to replace the old Solar Portfolio that has been removed from the rules. The Commissioners have asked the ACC Hearing Division to start a formal hearing process to take testimony on renewable and environmentally friendly energy sources. Supporters of these alternative energy sources will now be afforded the opportunity to present their case laying out the economies of new energy technologies.