UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 18, 1999
Commission Registrant; State of
File Incorporation; IRS Employer
Number Address; and Telephone Number Identification Number
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1-13739 UNISOURCE ENERGY CORPORATION 86-0786732
(An Arizona Corporation)
220 West Sixth Street
Tucson, AZ 85701
(520) 571-4000
1-5924 TUCSON ELECTRIC POWER COMPANY 86-0062700
(An Arizona Corporation)
220 West Sixth Street
Tucson, AZ 85701
(520) 571-4000
Item 5. Other Events
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NEW ENERGY VENTURES, INC. SALE
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On June 18, 1999, UniSource Energy Corporation ("UniSource
Energy") announced that its wholly-owned subsidiary, MEH
Corporation ("MEH"), and New Energy Holdings, L.L.C. ("NEH")
entered into an agreement to sell New Energy Ventures, Inc.
("NEV") to AES Corporation ("AES"). MEH and NEH each currently
own 50% of NEV. NEH is owned by the senior management of NEV.
Under the terms of the sale, which is expected to close in the
third quarter of 1999, MEH will receive $50 million as follows
(all values are approximate):
-- $27.2 million in AES common stock at closing. The number and
total value of shares received at closing is subject to
adjustment depending on the price of AES stock on the New York
Stock Exchange. AES has agreed to register the stock shortly
after closing.
-- Promissory notes issued by NEV totaling $22.8 million. The
notes will be secured, bear interest at 9.5%, and $11.4 million
of principal is due 12 months after closing and the remaining
$11.4 million is due 24 months after closing.
As part of the agreement, AES will repay a $10 million loan
NEV obtained from an unrelated party that was guaranteed by
UniSource Energy. Also, UniSource Energy has been the guarantor
of performance bonds and other guarantees that secure amounts NEV
owes to utility distribution companies and energy suppliers in
connection with NEV's sales to retail electric customers. These
credit commitments are secured and will remain in place for at
least 120 days from June 18, 1999. The UniSource Energy credit
commitments will be terminated as the guarantees expire or earlier
as substitute guarantors are provided by NEV or AES. See Loans and
Guarantees, Investing And Financing Activities in Management's
Discussion and Analysis of Financial Condition and Results of
Operations in the Quarterly Report on Form 10-Q for the period
ended March 31, 1999 for additional information.
Prior to the closing, AES has agreed to extend up to $25
million in credit for the benefit of NEV. Amounts extended under
that facility will be guaranteed by MEH and NEH until the
closing, at which time the guarantees will terminate. AES will
also provide, prior to closing, additional guarantees as needed
to support NEV's business activities. If the transaction has not
closed by December 31, 1999, NEV and/or UniSource Energy, or a
third party will assume or replace these additional guarantees.
The sale is subject to approval by the Federal Energy
Regulatory Commission (FERC), clearance under the Hart-Scott-
Rodino Anti-trust Act, and various standard terms and conditions.
UniSource Energy expects to recognize a pre-tax gain of
approximately $30 million on the transaction over the next two
years. The timing of the recognition of the gain will be
determined at closing.
NEV, formed in 1995 and headquartered in Los Angeles, provides
electricity and energy products and services to customers in
deregulating energy markets. AES, based in Arlington, Virginia,
is a global power company that owns, or has an interest in, power
facilities in the United States and overseas.
ACC COMMISSIONER APPOINTED
--------------------------
On June 21, 1999 the Governor appointed Mr. William A. Mundell
to serve as a Commissioner on the Arizona Corporation Commission
(ACC). Mr. Mundell replaces Tony West who was removed as a
Commissioner by the Arizona Supreme Court on June 9, 1999. Mr.
Mundell will serve until the general election in 2000.
ACC PROCEDURAL ORDER ON SETTLEMENT AGREEMENT
--------------------------------------------
On June 23, 1999 the ACC issued a Procedural Order that
schedules the formal hearings and public meetings necessary for
the ACC to approve Tucson Electric Power Company's (TEP)
Settlement Agreement (Settlement). The ACC will consider, and
ultimately decide, on approval of TEP's stranded cost recovery
plan and unbundled tariffs, and competition for electric services
in Arizona. The Settlement was previously filed as an exhibit to
UniSource Energy's and TEP's Form 8-K filed June 21, 1999.
A hearing for these items is scheduled for August 11, 1999 in
Tucson, Arizona. The Order lists the following key dates:
-- June 30, 1999 - filings of testimony and related documentation
in support of TEP's proposed Settlement are due from TEP,
Residential Utility Consumers Office (RUCO), Arizona Community
Action Association (ACAA), and Arizonans for Electric Choice and
Competition (AECC).
-- July 7, 1999 - all motions to intervene are due.
-- July 28, 1999 - discovery requests may be served to TEP, RUCO,
AECC and ACAA regarding TEP's proposed Settlement. In addition,
all Intevenors and Staff will file specific disagreements,
testimony, and comments regarding TEP's proposed Settlement and a
list of witnesses and subject areas to be covered at the August
11 hearing.
-- August 6, 1999 - rebuttal testimony and list of witnesses and
subject areas to be covered at the hearing are due from TEP,
RUCO, AECC and ACAA.
-- August 9, 1999 - Pre-hearing conference to be held on this
date at 1:30 PM at the ACC's office in Phoenix, Arizona.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
UNISOURCE ENERGY CORPORATION
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(Registrant)
Date: June 25, 1999 /s/Ira R. Adler
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Ira R. Adler
Executive Vice President and
Principal Financial Officer
TUCSON ELECTRIC POWER COMPANY
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(Registrant)
Date: June 25, 1999 /s/Ira R. Adler
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Ira R. Adler
Executive Vice President and
Principal Financial Officer