To: Editors, News Directors	Date: August 4, 2004
For: Immediate Release

ACC Approves New Renewable Energy Program for UniSource Customers

Also Approves Expansion of TEP’s Solar Programs

PHOENIX – In two separate decisions, the Arizona Corporation Commissioners acted to further encourage the adoption of solar and renewable technologies in both the Tucson Electric Power (TEP) and UniSource Electric service territories.

UniSource Electric has customers in Mohave and Santa Cruz counties.  In a July 2003 decision that approved the transfer of the service territory from Citizens Communications to UniSource, the parent company of TEP, the Commissioners required UniSource develop a program to encourage the use of renewable energy.  Yesterday’s decision approves three different programs:

• The GreenWatts Pricing Plan – This introduces voluntary “green pricing” for customers.  Green pricing allows customers to voluntarily pay a premium for their electricity to fund renewable energy.  Under the GreenWatts tariff, customers would be allowed to purchase blocks of electricity at a premium to underwrite the increased costs of renewable electricity.
• GreenWatts SunShare Hardware Buydown Program – This program encourages customers to install solar energy equipment by paying the customer up to $3,000 per kilowatt of solar electric generating capacity in 2004.  The buydown payment would be a maximum of $2,700 in 2005 and maximum of $2,400 in 2006.  The solar system must meet 19 specific qualifications and the ultimate buydown would be determined by adjusting for shading factors and the variance in orientation from due south.  The customer could use any available income tax credits to further reduce the initial cost of the system.

“Arizona utilities are required to meet a renewable energy requirement that we mandated and are looking to potentially expand,” Chairman Marc Spitzer said.  “As a result of our mandate, we have seen the utilities engage in creative thinking to come up with innovative programs that support the goal of expanding the renewable energy mix in Arizona.”

“The introduction of these programs demonstrates our continued commitment to expand the use of renewable resources to generate electricity,” Commissioner Bill Mundell said.  “Customers in the UniSource territory have not had the option to support renewable energy through programs like TEP’s that lower the cost to the consumer while benefiting the environment.”

Yesterday’s other major decision approved a revision to TEP’s existing GreenWatts SunShare Hardware Buydown Program.  The Commission had originally approved the program in February 2001.  Like the UniSource Electric program, the purpose of TEP’s GreenWatts SunShare program is to encourage customers to install solar energy equipment to help meet the Commission’s Environmental Portfolio Standard.

The Commission’s decision increases the maximum buydown amount for 2004 from $2,000 to $3,000 per kilowatt of solar electric generating capacity (as measured by the manufacturer’s direct current ratings).  The decision sets forth a detailed list of criteria that qualifying installations must meet before qualifying for the buydown.  TEP tests the equipment at installation and provides an annual maintenance inspection to ensure that the solar generation equipment is working properly.

“Studies show that Tucson is a great place for solar installations,” Commissioner Mike Gleason explained.  “A photovoltaic system will produce 30 percent more power in Tucson than the same system in most areas of California.”

“Tucson Electric Power was the first utility in Arizona to offer a hardware buydown program, Commissioner Jeff Hatch-Miller said.  “TEP’s aggressively moving forward.  Its service territory already provides more solar power per person than does California.  That is impressive!  But there’s more we can do to spur the adoption of renewable energy so in a February 2004 ruling, we asked our staff to study possible changes to the Environmental Portfolio Standard.  I am looking forward to reviewing their recommendations.”

“I applaud the work of TEP and UniSource to spur customer interest in solar and renewable energy.  Arizona has the potential to lead the West in the adoption, use and research and development of solar, biomass and other renewable technologies,” Commissioner Kristin Mayes said.  “Like my colleagues, I look forward to reviewing the staff and working group recommendations on possible changes to the Environmental Portfolio Standard.”

To learn more about the Arizona Corporation Commission’s Renewable Portfolio Standard, view the following links:

Environmental Portfolio Standard Working Group Reports, Rules and Decisions:  http://www.cc.state.az.us/utility/electric/environmental.htm

February 2004 News Release Announcing Boost to Renewable Standard:

http://www.cc.state.az.us/news/pr02-11-04.htm

February 2001 News Release Announcing Environmental Portfolio Standard:

http://www.cc.state.az.us/news/pr02-01-01.htm