TUCSON, Ariz., Sep 08, 2005 -- BUSINESS WIRE

 

A Tucson Electric Power (TEP) generating unit that had been out of service for nearly four weeks returned to service Sept. 7.

Unit 2 at TEP's Springerville Generating Station (SGS) was taken out of service Aug. 11 due to a control system malfunction and subsequent mechanical problem with the turbine. TEP has since replaced one row of turbine blades that were damaged and made other minor repairs to the 380-megawatt coal-fired unit.

The plant outage did not affect TEP customers because the utility was able to purchase replacement power to meet its load requirements. The cost of that additional energy will not be passed on to customers.

TEP estimates that its utility gross margin (the sum of retail and wholesale electric revenues less fuel and purchased power expense) will be reduced by approximately $14 million due to replacement power expenses and lost wholesale sales opportunities. The repair costs are expected to be less than $1 million.

As a result of the SGS Unit 2 outage, UniSource Energy Corp. (NYSE: UNS) is modifying its estimate of 2005 full-year earnings to be between $1.30 and $1.60 per basic share of common stock.

Numerous factors can affect UniSource Energy's ability to reach the 2005 estimate. The factors include, but are not limited to: uncertainties prevailing in the wholesale power market; regulatory decisions; performance of TEP's generating plants; the weather; the pace and strength of the economic recovery in the region; fuel and purchased power expense; changes to long-term contracts; changes in asset depreciable lives; changes in accounting standards; and the amount of operating losses incurred by Millennium and losses from the disposition of Millennium assets.

UniSource Energy's primary subsidiaries include TEP, which serves more than 379,000 customers in southern Arizona; UniSource Energy Services, provider of natural gas and electric service for more than 223,000 customers in northern and southern Arizona; and Millennium Energy Holdings, parent company of UniSource Energy's unregulated energy businesses. For more information about UniSource Energy and its subsidiaries, visit unisourceenergy.com. For more information about TEP, visit tep.com.

This news release contains forward-looking information that involves risks and uncertainties that include, but are not limited to, the outcome of regulatory proceedings; the ongoing restructuring of the electric industry; regional economic and market conditions which could affect customer growth and the cost of fuel and power supplies; changes to long-term contracts; performance of TEP's generating plants; the weather; changes in asset depreciable lives; changes related to the recognition of unbilled revenue; the cost of debt and equity capital; changes in accounting standards; and other factors listed in UniSource Energy's Form 10-K and 10-Q filings with the Securities and Exchange Commission. The preceding factors may cause future results to differ materially from outcomes currently expected by UniSource Energy.

SOURCE: Tucson Electric Power

News Provided By