SAN FRANCISCO (Standard&Poor's) April 25, 2007--Standard&Poor's Ratings Services said today that the April 24 draft decision by the Arizona Corporation Commission's (ACC) administrative law judge recommending that Tucson Electric Power's (TEP; BB/Stable/B-2) retail electric rates remain in effect is modestly favorable for credit if approved by the ACC. TEP has been in discussions with stakeholders for the last two years about how to price electric service for its 392,000 retail customers after the end of its rate freeze in 2009. As part of an ACC proceeding last month, the company offered to file three alternative rate proposals--a traditional cost-of-service case, a market-based option, which the company says its 1999 settlement allows, and a hybrid approach. The
