SAN FRANCISCO (Standard&Poor's) May 9, 2007--Standard&Poor's Ratings Services said today that the May 8 vote by the Arizona Corporation Commission (ACC) that allows Tucson Electric Power (TEP; BB/Stable/B-2) to hold retail electric rates at their current levels until its ongoing rate proceeding is modestly favorable for the company's credit. Existing rates, which average about 9 cents/kilowatt-hour (kWh), include a competition transition charge (CTC) that was due to sunset approximately May 2008. As a result, the decision will allow the company to collect an estimated $60 million in CTC cash flows from May 2008 through December 2008. TEP has been in discussions with stakeholders for the past two years about how to price electric service for its
