To: Editors, News Directors

Date: June 18, 2004

For: Immediate Release

UniSource Reorganization Hearing Begins June 21
Live Streaming Audio Link Available at ACC Website

PHOENIX - The court-like administrative law hearing in the UniSource reorganization case begins on Monday at the Arizona Corporation Commission's Tucson office. The Commissioners are likely to attend significant portions of the hearing to ask questions of the witnesses. The Commissioners will not reach a decision or vote on this matter.

Due to the interest in these proceedings from the large UniSource service territory, the Commission has arranged to have a live streaming audio uplink available through our website. The link will be active for the duration of the hearing only. The link will re-direct you to the service provider's website. Beginning Monday, look for the special "Live Streaming Audio UniSource Reorganization Hearing" link at http://www.cc.state.az.us/. The audio stream will start and end when the audio system in the hearing room is activated.

Anyone wishing to obtain a complete transcript of the hearing should make arrangements in advance with Arizona Reporting Service, the firm that provides court reporters for this case. Arizona Reporting Service can be reached at 602-274-9944.

The preliminary schedule for next week's hearing is:

Monday, June 21 starting at 10:00 AM

• Opening statements by parties, intervenors and Commissioners

• Testimony by Jim Pignatelli, UniSource President and CEO

• Cross examination of Pignatelli

• Testimony and cross-examination of Walter Meek, president of the Arizona Utility Investors Association

Tuesday, June 22 starting at 9:00 AM

• Testimony and cross-examination of a panel of witnesses representing the investors intending to acquire an interest in UniSource:

• Scott Stuart, KKR

• Marc Lipschultz, KKR

• Chris Behrens, JP Morgan Partners

• Wellford Tabor, Wachovia

• If time allows:

• Testimony and cross-examination of Mary Lee Diaz-Cortez of the Residential Utility Consumer Office (RUCO), an intervenor

• Testimony and cross-examination of Joel Reiker of ACC staff

Wednesday, June 23 starting at 9:00 AM

• Completion of any witnesses from Tuesday

• Testimony and cross-examination of John Antonuk on behalf of ACC staff

• Testimony and cross-examination of remaining witnesses

• Conclusion of hearing or reconvening at 9:00 AM Thursday

The hearing will continue on Thursday and Friday if testimony takes significantly longer than anticipated.

Written testimony by ACC staff is available on our website at http://www.cc.state.az.us/utility/electric/uecr.htm. RUCO's pre-filed testimony is also posted on its website at www.azruco.com.

Here is a speculative timeline: At the conclusion of the hearing, the administrative law judge is likely to ask the parties and intervenors to submit summary briefs outlining their positions after having heard all the evidence and cross-examination. After the briefs and transcripts are in, the judge will take the matter under advisement and begin drafting a recommendation for the Commissioners. The Commissioners can accept, modify or deny the judge's recommendation. UniSource has requested a decision by the Commissioners by the end of August 2004.