File No. 69-427
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File No. 69-293
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM U-3A-2
Statement by Holding Company Claiming Exemption Under Rule
U-3A-2 from the Provisions of the Public Utility Holding
Company Act of 1935
To be Filed Annually Prior to March 1
--------------------------------------------------------------------------------
UNISOURCE ENERGY CORPORATION
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of the
Public Utility Holding Company Act of 1935, and
TUCSON ELECTRIC POWER COMPANY
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of
the Public Utility Holding Company Act of 1935, and submits the following
information:
1. Name, State of organization, location and nature of business of claimant[s]
and every subsidiary thereof, other than any exempt wholesale generator (EWG) or
foreign utility company in which claimant[s] directly or indirectly holds an
interest.
UniSource Energy Corporation ("UniSource Energy") was incorporated under
the laws of the State of Arizona and is a holding company organized to acquire
and hold the securities of other corporations.
UniSource Energy controls, directly or indirectly, 10% or more of the
"voting securities" of the following subsidiaries:
I. Tucson Electric Power Company ("TEP") was incorporated under the laws
of the State of Arizona and is the principal subsidiary of UniSource Energy.
UniSource Energy owns 99.9% of the voting shares of TEP. TEP was organized as
an operating public utility engaged in the generation, purchase, transmission,
distribution and sale of electricity to retail customers in the City of Tucson,
Arizona, and the surrounding area and to wholesale customers. TEP holds the
stock of Escavada Company ("Escavada"), San Carlos Resources Inc.
("San Carlos"), Sierrita Resources Inc. ("SRI"), Tucson Resources Inc. ("TRI")
and Tucsonel Inc. ("Tucsonel"), and holds a portion of the stock of Inncom, Inc.
("Inncom") and TruePricing, Inc. ("TruePricing").
A. Escavada was incorporated under the laws of the State of Arizona
and is a wholly-owned subsidiary of TEP. Escavada was formed to engage in the
business of maintaining miscellaneous assets and property.
B. San Carlos was incorporated under the laws of the State of
Arizona and is a wholly-owned subsidiary of TEP. San Carlos holds the title to
Unit No. 2 of the Springerville Generating Station, a generating facility in
commercial operation located in Apache County, Arizona, and is the lessee,
jointly and severally with TEP, of an undivided one-half interest in all
facilities and personal property used in common between Unit No. 1 and Unit No.
2 of the Springerville Generating Station. San Carlos is not the operator of
Unit No. 2 or any of such common facilities.
C. SRI was incorporated under the laws of the State of Delaware and
is a wholly-owned subsidiary of TEP. SRI was formed primarily to invest in
financial assets.
1. Santa Cruz Resources Inc. ("Santa Cruz") was incorporated
under the laws of the State of Delaware and is a wholly-owned subsidiary of SRI.
Santa Cruz held an investment in a financial service company.
D. TRI was incorporated under the laws of the State of Delaware and
is a wholly-owned subsidiary of TEP. TRI was formed primarily to invest in
financial assets.
1. Sabino Investing Inc. was incorporated under the laws of the
State of Delaware and is a wholly-owned subsidiary of TRI. Sabino Investing
Inc. holds certain real estate assets.
E. Tucsonel was incorporated under the laws of the State of Arizona
and is a wholly-owned subsidiary of TEP. Tucsonel holds an undivided ownership
interest in the Springerville Coal Handling Facilities.
F. Inncom was incorporated under the laws of the State of Delaware
and is 17% owned by TEP. Inncom was formed to provide demand-side and energy
efficiency services.
G. TruePricing, Inc. ("TruePricing") was incorporated under the laws
of the State of Delaware. TEP owns approximately 26.6% of the voting shares of
TruePricing. Millennium Energy Holdings, Inc. ("Millennium") owns 20.5% of the
voting shares of TruePricing (see Section 1(II)(L) below). TruePricing was
formed to develop technology services that provide pricing and other related
information to consumers for a wide variety of products, including utility
services.
1. TrueSolar Solutions LLC ("TrueSolar") was organized under
the laws of the State of California and is a wholly-owned subsidiary of
TruePricing. TrueSolar was formed to develop, finance, own and operate
electrical generation and related systems and, in connections therewith, to
engage in traditional energy development and integration activities,
including owning, operating and siting solar and other renewable plants and
gas-fired generation assets.
II. Millennium was incorporated under the laws of the State of Arizona and
is a wholly-owned subsidiary of UniSource Energy. Millennium holds all of the
stock of Advanced Energy Technologies, Inc. ("AET"), MEH Equities Management
Company ("MEH Equities"), Millennium Environmental Group, Inc. ("MEG"), Nations
Energy Corporation ("Nations Energy"), Southwest Energy Solutions, Inc. ("SES"),
SWPP Investment Company ("SWPP Investment") and a portion of the voting stock of
MicroSat Systems, Inc. ("MicroSat"), ITN Energy Systems, Inc. ("ITN"),
MetroGen Enterprises, L.L.C. ("MetroGen"), TruePricing, Carboelectrica Sabinas,
S. de R.L. de C.V. ("Sabinas"), POWERTRUSION International, Inc.
("Powertrusion") and Valley Ventures III, LP ("Valley Ventures").
A. AET was incorporated under the laws of the State of Arizona and
is a wholly-owned subsidiary of Millennium. AET was formed to develop certain
distributed energy projects and renewable energy sources.
1. Ascent Power Systems, Inc. ("Ascent") was incorporated under
the laws of the State of Arizona and is 64% owned by AET. Ascent was formed to
engage in the research, development and commercialization of solid oxide fuel
cells.
2. Global Solar Holdings, L.L.C. ("Global Solar Holdings") was
organized under the laws of the State of Arizona and is 66.7% owned by AET.
Global Solar Holdings was formed to engage in the manufacture and sale of
thin-film photovoltaic modules for distributed energy applications. Global
Solar Holdings is in the process of being formally dissolved.
3. Global Solar Energy, Inc. ("Global Solar") was incorporated
under the laws of the State of Arizona and is 87% owned by AET. Global Solar
was formed to engage in the research, development and commercialization of
thin-film photovoltaic material and products, and to perform system integration
of large photovoltaic arrays.
a. Global Solar Energy International Holdings ("GS
International") was organized under the laws of the Cayman Islands and is a
wholly-owned subsidiary of Global Solar. GS International was formed to serve
as an investment holding company.
i. Global Solar Energy Technologies ("GS
Technologies") was organized under the laws of Mauritius and is a wholly-owned
subsidiary of GS International. GS Technologies was formed to serve as an
investment holding company.
4. Infinite Power Solutions, Inc. ("IPS") was incorporated
under the laws of the State of Arizona and is 77.5% owned by AET. IPS was
formed to engage in the research, development and commercialization of thin-film
lithium batteries.
5. GES Shared Services, Inc. ("GES Shared") was incorporated
under the laws of the State of Arizona and is a wholly-owned subsidiary of AET.
GES Shared was formed to provide administrative support (e.g., accounting,
finance, legal and human resources) to other Millennium subsidiaries.
B. Sabinas was organized under the laws of Mexico and is 50% owned
by Millennium. Sabinas was formed to develop up to 800 megawatts of coal-fired
generation in the Sabinas region of Coahuila, Mexico.
1. Minerales Monclova S.A. de C.V. ("Mimosa") was organized
under the laws of Mexico and is 19.5% owned by Sabinas. Mimosa was formed for
the purpose of owning and exploiting coal and gas reserves.
C. MEH Equities was incorporated under the laws of the State of
Arizona and is a wholly-owned subsidiary of Millennium. MEH Equities was formed
to hold Millennium's interest in Haddington Energy Partners II LP
("Haddington").
1. Haddington was organized under the laws of the State of
Delaware and is 31.1% owned by MEH Equities. Haddington was formed to primarily
fund energy-related investments.
D. MEG was incorporated under the laws of the State of Arizona and
is a wholly-owned subsidiary of Millennium. MEG was formed to engage in the
domestic and international purchase, sale and trading of emission allowances and
associated commodities.
E. MicroSat was incorporated under the laws of the State of Colorado
and is 49% owned by Millennium. MicroSat was formed to research, develop and
commercialize microsatellite systems.
F. Nations Energy was incorporated under the laws of the State of
Arizona and is a wholly-owned subsidiary of Millennium. Nations Energy was
formed to develop and invest in independent power projects in global energy
markets, including qualifying facilities, EWGs and foreign utility companies,
located in the United States and abroad.
1. Nations Curacao Ltd. ("Nations Curacao") was incorporated
under the laws of the Cayman Islands and is a wholly-owned subsidiary of Nations
Energy. Nations Curacao was formed to invest in an independent power project
located in Curacao. On December 6, 2002, a notice was filed with The Registrar
of Companies in the Cayman Islands for a voluntary liquidation. On or about
March 6, 2003, Nations Curacao will be formally dissolved.
2. Nations Curacao Operating Ltd. ("Nations Curacao Operating")
was incorporated under the laws of the Cayman Islands and is a wholly-owned
subsidiary of Nations Energy. Nations Curacao Operating was formed to operate
or contract with others to operate the independent power project being developed
and owned by Nations Energy or subsidiaries thereof. On December 6, 2002, a
notice was filed with The Registrar of Companies in the Cayman Islands for a
voluntary liquidation. On or about March 6, 2003, Nations Curacao Operating
will be formally dissolved.
3. Nations International Ltd. ("Nations International") was
incorporated under the laws of the Cayman Islands and is a wholly-owned
subsidiary of Nations Energy. Nations International was formed to invest in
international independent power projects. Nations International owns a 40%
interest in Corporacion Panamena de Energia S.A. ("COPESA"), a Panama company,
which owns a power project located in Panama.
G. ITN was incorporated under the laws of the State of
Colorado and is 49% owned by Millennium. ITN was formed to research,
develop and commercialize emerging space, energy and environment-related
technologies for government and commercial markets.
1. Ascent Power Systems, Inc. ("Ascent") was incorporated under
the laws of the State of Arizoin and is 36% owned by ITN. Ascent was formed to
engage in the research, development and commercialization of solid oxide fuel
cells.
H. SES was incorporated under the laws of the State of Arizona and is
a wholly-owned subsidiary of Millennium. SES was formed to provide electrical
contracting services statewide to commercial, industrial and governmental
customers in both high voltage and inside wiring capacities.
I. SWPP Investment was incorporated under the laws of the State of
Arizona and is a wholly-owned subsidiary of Millennium. SWPP Investment was
formed to manufacture and sell concrete utility poles.
1. Sentinel Concrete Utility Poles, L.L.C. ("Sentinel") was
organized under the laws of the State of Arizona and is 50% owned by SWPP
Investment. Sentinel was formed to market and distribute concrete utility poles
and products.
2. SWPP International Ltd. ("SWPP International") was
incorporated under the laws of the Cayman Islands and is a wholly-owned
subsidiary of SWPP Investment. SWPP International was formed to invest in a
Mexican joint venture(s) related to the manufacturing and selling of concrete
utility poles.
a. Productos de Concreto Internacionales, S. de R.L. de
C.V. ("Productos") was organized under the laws of Mexico and is 50% owned by
SWPP International. Productos was formed to manufacture concrete utility poles
and products in Mexico.
J. Powertrusion was incorporated under the laws of the State of
Nevada and is 50.5% owned by Millennium. Powertrusion was formed to develop,
manufacture and sell lightweight utility poles and products.
K. MetroGen was organized under the laws of the State of Delaware
and is 20% owned by Millennium. MetroGen was formed to develop load curtailment
methodologies through a remote dispatch system for idle generation assets
throughout New York City.
L. TruePricing was incorporated under the laws of the State of
Delaware. Millennium owns 20.5% of the voting shares of TruePricing. TEP owns
26.6% of the voting shares (see Section 1(I)(G) above). TruePricing was formed
to develop technology services that provide pricing and other related
information to consumers for a wide variety of products, including utility
services.
1. TrueSolar was organized under the laws of the State of
California and is a wholly-owned subsidiary of TruePricing. TrueSolar was
formed to develop, finance, own and operate electrical generation and related
systems and, in connection therewith, to engage in traditional energy
development and integration activities, including owning, operating and siting
solar and other renewable plants and gas-fired generation assets.
M. Valley Ventures was formed as a venture capital fund focusing on
information technology, optics and bitechnology. Millennium owns 14.8% of Valley
Ventures. Millennium originally invested in Tucson Community Ventures ("TV"),
which was organized under the laws of the State of Delaware. Millennium's
investment represented 45.9% of the total fund at the time the fund was merged
into Valley Ventures on September 16, 2002.
III. UniSource Energy Development Company ("UED") was incorporated under
the laws of the State of Arizona and is a wholly-owned subsidiary of UniSource
Energy. UED was formed to develop energy projects primarily in the Arizona and
southwest region.
A. Springerville Power, L.L.C. ("Springerville Power") was
organized under the laws of the State of Arizona and is a wholly-owned
subsidiary of UED. Springerville Power was formed to develop, finance and own
or lease an approximately 400 MW coal-fired power generation project to be
located near Springerville, Arizona.
UniSource Energy controls, directly or indirectly, less than 10% of the
"voting securities" of the following companies: None.
2. A brief description of the properties of claimant[s] and each of its
subsidiary public utility companies used for the generation, transmission and
distribution of electric energy for sale, or for the production, transmission
and distribution of natural or manufactured gas, indicating the location of
principal generating plants, transmission lines, producing fields, gas
manufacturing plants, and electric and gas distribution facilities, including
all such properties which are outside the State in which claimant[s] and its
subsidiaries are organized and all transmission or pipelines which deliver or
receive electric energy or gas at the borders of such State.
UniSource Energy does not directly own any property used for the
generation, transmission and distribution of electric energy for sale, or for
the production, transmission and distribution of natural or manufactured gas.
As of December 31, 2002, TEP owned or participated in an overhead electric
transmission and distribution system consisting of 511 circuit-miles of 500
kiloVolts ("kV") lines, 1,122 circuit-miles of 345 kV lines, 371 circuit-miles
of 138 kV lines, 434 circuit-miles of 46 kV lines and 12,095 circuit-miles of
lower voltage primary lines. TEP's underground electric distribution system is
comprised of 7,353 cable miles. Approximately 77% of the poles upon which the
lower voltage lines are located are owned by TEP. Electric substation capacity
associated with the above-described electric system consisted of 192 substations
with a total installed transformer capacity of 5,602,522 kiloVolt Amperes
("kVA"). The above facilities are all located in Arizona except for certain
transmission lines consisting of 560 circuit-miles of 345 kV in which TEP has a
fractional undivided interest, that are located in the State of New Mexico and
used to deliver electric energy produced at the Four Corners and San Juan
Stations to TEP at the Arizona-New Mexico border.
Except as otherwise noted, at December 31, 2002 TEP owned or had a
leasehold interest in the following generating stations:
Net
Generating Capability Operating TEP's Share
Source Location MW Agent % MW
---------- -------- ---------- --------- ----- -----
Springerville
Station #1 Springerville, AZ 380 TEP 100.0 380
Springerville
Station #2(1) Springerville, AZ 380 TEP 100.0 380
San Juan Station #1 Farmington, NM 327 PNM 50.0 164
San Juan Station #2 Farmington, NM 316 PNM 50.0 158
Navajo Station #1 Page, AZ 750 SRP 7.5 56
Navajo Station #2 Page, AZ 750 SRP 7.5 56
Navajo Station #3 Page, AZ 750 SRP 7.5 56
Four Corners
Station #4 Farmington, NM 784 APS 7.0 55
Four Corners
Station #5 Farmington, NM 784 APS 7.0 55
Irvington
Station #1 Tucson, AZ 81 TEP 100.0 81
Irvington
Station #2 Tucson, AZ 81 TEP 100.0 81
Irvington
Station #3 Tucson, AZ 104 TEP 100.0 104
Irvington
Station #4 Tucson, AZ 156 TEP 100.0 156
Internal Combustion
Turbines Tucson, AZ 217 TEP 100.0 217
Solar Electric Springerville/
Generation Tucson, AZ 3 TEP 100.0 3
-----
TOTAL 2,002
=====
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(1) Title to Springerville #2 is held by San Carlos.
The electric generating stations, operating headquarters, the warehouse,
service center and the electric distribution and electric transmission
facilities owned by TEP are located in Arizona, except as otherwise noted. TEP,
individually and in conjunction with Public Service Company of New Mexico in
connection with the San Juan Station, has acquired easements and leases for
transmission lines and a water diversion facility located on the Navajo Indian
Reservation. TEP has also acquired easements for transmission facilities,
related to the San Juan and Navajo Generating Stations, across the Zuni, Navajo
and Tohono O'Odham Indian Reservations.
Various undivided interests in the common facilities at the Irvington
Generating Station which serve Unit 4 were sold and are leased back by TEP.
The 50% undivided interest of San Carlos in the common facilities at the
Springerville Generating Station were sold by San Carlos and leased back by TEP
and San Carlos, jointly and severally. The coal-handling facilities at the
Springerville Generating Station were sold and are leased back by TEP. TEP
leases Springerville Unit 1, the fuel handling facilities for Springerville, and
an undivided 50% interest in the facilities common to Unit 1 and Unit 2 through
sale/leaseback arrangements. San Carlos holds title to Unit 2 of the
Springerville Generating Station.
3. The following information for the last calendar year with respect to
claimant[s] and each of its subsidiary public utility companies:
a. Number of kWh of electric energy sold (at retail or wholesale), and
Mcf of natural or manufactured gas distributed at retail.
Electricity Gas
----------- ---
UniSource Energy None None
TEP 12,543,211 None
San Carlos None None
b. Number of kWh of electric energy and Mcf of natural or manufactured
gas distributed at retail outside the State in which each company is organized.
None.
c. Number of kWh of electric energy and Mcf of natural or manufactured
gas sold at wholesale outside the State in which each such company is organized,
or at the State line.
Electricity Electricity Gas Sold
Sold Outside Sold at the Outside the Gas Sold at
the State State Line State the State Line
------------ ----------- ----------- --------------
UniSource Energy None None None None
TEP 356,788 None None None
San Carlos None None None None
d. Number of kWh of electric energy and Mcf of natural or manufactured
gas purchased outside the State in which each such company is organized or at
the State line.
Electricity Electricity Gas Sold
Sold Outside Sold at the Outside the Gas Sold at
the State State Line State the State Line
------------ ----------- ----------- --------------
UniSource Energy None None None None
TEP 562,228 None None None
San Carlos None None None None
4. The following information for the reporting period with respect to
claimant[s] and each interest it holds directly or indirectly in an EWG or a
foreign utility company, stating monetary amounts in United States dollars:
a. Name, location, business address and description of the facilities
used by the EWG or foreign utility company for the generation, transmission and
distribution of electric energy for sale or for the distribution at retail of
natural or manufactured gas.
Nations Energy, an Arizona corporation, acting on behalf of COPESA
hereby notifies the Commission, pursuant to Section 33(a) of the Act and Rule 57
thereunder, that during the reporting period, COPESA was a foreign utility
company within the meaning of Section 33(a) of the Act.
The name and business address for COPESA is as follows:
COPESA
Avenida Federico Boyd
E.D.F. Scotia Plaza
PISO VI Panama City, Panama
Listed below is a description of the COPESA facility:
COPESA owns an approximately 42 MW diesel-fired combustion turbine
facility located in Panama City, Panama. The project sells electricity to
distribution companies and large industrial users in Panama.
b. Name of each system company that holds an interest in such EWG or
foreign utility company; and description of the interest held.
The ownership of COPESA is as follows:
A. Nations International Ltd., a wholly-owned subsidiary of Nations
Energy, holds a 40% equity interest in COPESA.
B. Electric Machinery Enterprises, a Florida company, holds a 21.67%
equity interest in COPESA.
C. Proquim, a Panama company, owns a 22.67% equity interest in
COPESA.
D. Martino, S.A., a Panama corporation, holds an 11.66% equity
interest in COPESA.
E. Ingenieria R-M, S.A., a Panama corporation, holds a 3% equity
interest in COPESA.
F. The remaining 1.0% equity interest in COPESA is held by certain
Panamanian individuals.
c. Type and amount of capital invested, directly or indirectly, by the
holding company claiming exemption; any direct or indirect guarantee of the
security of the EWG or foreign utility company by the holding company claiming
exemption; and any debt or other financial obligation for which there is
recourse, directly or indirectly, to the holding company claiming exemption or
another system company, other than the EWG or foreign utility company.
During 2002, no additional amounts were invested by Nations
International Ltd. as additional equity in COPESA. Project debt in COPESA is
non-recourse.
d. Capitalization and earnings of the EWG or foreign utility company
during the reporting period.
The financial information for COPESA for the year ended December 31,
2002 has not been made available to UniSource Energy at the time of this filing.
UniSource Energy has been advised by adminstrative personnel of COPESA that the
2002 financial statements have not yet been completed by COPESA's auditors
because the auditors were delayed in beginning their reveiw of 2002 financial
information as the Panama internal revenue service was conducting a tax audit of
COPESA for prior years, and that audit was only recently completed. Based on
information furnished by COPESA personnel, UniSource Energy expects that the
financial information for 2002 will be available shortly. Upon receipt of that
information, this filing will be supplemented to include the 2002 financial data
for COPESA.
e. Identify any service, sales or construction contract(s) between the
EWG or foreign utility company and a system company, and describe the services
to be rendered or goods sold and fees or revenues under such agreement(s).
Inapplicable.
EXHIBIT A
---------
Consolidating statements of income of the claimants and their subsidiary
companies for the last calendar year, together with the consolidating balance
sheets of claimants and their subsidiary companies as of the close of such
calendar year.
This statement is being filed by TEP to claim exemption in the event that
San Carlos Resources Inc. is an "electric utility company" under the Act.
However, the filing of this statement is not an acknowledgment by TEP that San
Carlos Resources Inc. is an "electric utility company."
The above-named claimants have caused this statement to be duly executed on
their behalf by its authorized officer on this 28th day of February, 2003.
UNISOURCE ENERGY CORPORATION
By: /s/ Karen G. Kissinger
--------------------------------
Karen G. Kissinger
Vice President, Controller and
Chief Compliance Officer
(Corporate Seal)
TUCSON ELECTRIC POWER COMPANY
By: /s/ Karen G. Kissinger
--------------------------------
Karen G. Kissinger
Vice President, Controller and
Chief Compliance Officer
(Corporate Seal)
Attest:
/s/ Linda Kennedy
------------------
Name, title and address of officer to whom notices and correspondence concerning
this statement should be addressed: Vincent Nitido, Vice President and General
Counsel, UniSource Energy Corporation, One South Church Avenue, Suite 1820,
Tucson, Arizona 85701.
UNISOURCE ENERGY CORPORATION EXHIBIT A
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2002
(in thousands)
UNISOURCE TUCSON MILLENNIUM
ENERGY ELECTRIC ENERGY CONSOL. 2002
CORP. POWER CO.* HOLDINGS** UED*** ADJUST. CONSOL.
----------- ----------- ----------- ----------- ----------- -----------
ASSETS
Utility Plant
Plant in Service $ - $ 2,598,884 $ - $ - $ - $ 2,598,884
Utility Plant Under Capital Leases - 747,556 - - - 747,556
Construction Work in Progress - 59,926 - - - 59,926
----------- ----------- ----------- ----------- ----------- -----------
Total Utility Plant - 3,406,366 - - - 3,406,366
Less Accumulated Depreciation and
Amortization - (1,346,101) - - - (1,346,101)
Less Accumulated Depreciation of
Capital Lease Assets - (391,915) - - - (391,915)
----------- ----------- ----------- ----------- ----------- -----------
Total Utility Plant - Net - 1,668,350 - - - 1,668,350
----------- ----------- ----------- ----------- ----------- -----------
Investments and Other Property
Investments in Lease Debt and Equity - 191,867 - - - 191,867
Other 529,659 21,358 79,145 22,735 (529,659) 123,238
----------- ----------- ----------- ----------- ----------- -----------
Total Investments and Other Property 529,659 213,225 79,145 22,735 (529,659) 315,105
----------- ----------- ----------- ----------- ----------- -----------
Note Receivable from UniSource Energy - 79,462 - - (79,462) -
----------- ----------- ----------- ----------- ----------- -----------
Current Assets
Cash and Cash Equivalents 22 55,778 33,304 1,824 - 90,928
Accounts Receivable - Net 44,684 82,575 15,980 11,640 (78,244) 76,635
Materials and Fuel Inventory - 44,500 2,157 - - 46,657
Current Regulatory Assets - 11,778 - - - 11,778
Deferred Income Taxes - Current - 15,917 - - - 15,917
Interest Receivable - Current - 12,178 - - - 12,178
Other - 8,407 20,865 1,640 - 30,912
----------- ----------- ----------- ----------- ----------- -----------
Total Current Assets 44,706 231,133 72,306 15,104 (78,244) 285,005
----------- ----------- ----------- ----------- ----------- -----------
Regulatory and Other Assets
Transition Recovery Asset - 307,120 - - - 307,120
Income Taxes Recoverable Through
Future Revenues - 57,044 - - - 57,044
Other Regulatory Assets - 10,504 - - - 10,504
Other Assets 837 46,752 17 - - 47,606
----------- ----------- ----------- ----------- ----------- -----------
Total Regulatory and Other Assets 837 421,420 17 - - 422,274
----------- ----------- ----------- ----------- ----------- -----------
Total Assets $ 575,202 $ 2,613,590 $ 151,468 $ 37,839 $ (687,365) $ 2,690,734
=========== =========== =========== =========== =========== ===========
* This column reflects TEP on a consolidated basis. See 1.I. for information regarding TEP and its subsidiaries.
** This column reflects Millennium Energy Holdings on a consolidated basis. See 1.II. for information regarding
Millennium and its subsidiaries.
*** This column reflects UED on a consolidated basis. See 1.III. for information regarding UED and its subsidiary.
UniSource Energy and TEP use the following methods to report investments in their subsidiaries or other companies:
- Consolidation: When we own a majority of the voting stock of a subsidiary and we have control over the subsidiary,
we combine the accounts of the subsidiary with our accounts. We eliminate intercompany balances and transactions
when we combine these accounts.
- The Equity Method: We use the equity method to report corporate joint ventures, partnerships, and affiliated
companies when we hold a 20% to 50% voting interest or we have the ability to exercise significant influence
over the operating and financial policies of the investee company. Under the equity method, we report:
- Our interest in the equity of an entity as an investment on our balance sheet; and
- Our percentage share of the net income (loss) from the entity as "other income" in our income statements.
For investments where we are committed to providing all of the financing, we recognize 100% of the losses.
- The Cost Method: When we do not own enough shares to exercise significant influence over an investee company, we
use the cost method to report these investments. Typically the cost method is used for investments of less than
20% of the voting interest in an investee company. Under the cost method we report:
- Our interest in the equity of an entity as an investment on our balance sheet; and
- Income based on dividend distributions from the investee company; and
- Loss when impairment of the value of the investment becomes evident.
UNISOURCE ENERGY CORPORATION EXHIBIT A
CONSOLIDATING BALANCE SHEET (CONTINUED)
DECEMBER 31, 2002
(in thousands)
UNISOURCE TUCSON MILLENNIUM
ENERGY ELECTRIC ENERGY CONSOL. 2002
CORP. POWER CO. HOLDINGS UED ADJUST. CONSOL.
----------- ----------- ----------- ----------- ----------- -----------
CAPITALIZATION AND OTHER LIABILITIES
Capitalization
Common Stock $ 661,185 $ 647,172 $ - $ - $ (647,172) $ 661,185
Additional Paid-In Capital - - 163,900 32,256 (196,156) -
Accumulated Deficit (218,932) (305,685) (34,921) 1,676 338,930 (218,932)
Accumulated Other Comprehensive Income -
Minimum Pension Liability (Net of Tax) - (4,024) - - - (4,024)
----------- ----------- ----------- ----------- ----------- -----------
Common Stock Equity 442,253 337,463 128,979 33,932 (504,398) 438,229
Capital Lease Obligations - 801,508 103 - - 801,611
Long-Term Debt 104,723 1,128,410 553 - (104,723) 1,128,963
----------- ----------- ----------- ----------- ----------- -----------
Total Capitalization 546,976 2,267,381 129,635 33,932 (609,121) 2,368,803
----------- ----------- ----------- ----------- ----------- -----------
Current Liabilities
Current Obligations Under Capital Leases - 42,872 88 - - 42,960
Current Maturities of Long-Term Debt - 1,725 115 - - 1,840
Accounts Payable 31,718 54,182 37,850 3,428 (78,244) 48,934
Interest Accrued - 60,238 - - - 60,238
Taxes Accrued (2,782) 35,772 766 94 - 33,850
Accrued Employee Expenses - 13,370 274 - - 13,644
Other - 7,543 10,371 - - 17,914
----------- ----------- ----------- ----------- ----------- -----------
Total Current Liabilities 28,936 215,702 49,464 3,522 (78,244) 219,380
----------- ----------- ----------- ----------- ----------- -----------
Deferred Credits and Other Liabilities
Deferred Income Taxes - Noncurrent (1,017) 67,490 (32,306) 385 - 34,552
Other 307 63,017 4,675 - - 67,999
----------- ----------- ----------- ----------- ----------- -----------
Total Deferred Credits and Other Liabilities (710) 130,507 (27,631) 385 - 102,551
----------- ----------- ----------- ----------- ----------- -----------
Total Capitalization and Other Liabilities $ 575,202 $ 2,613,590 $ 151,468 $ 37,839 $ (687,365) $ 2,690,734
=========== =========== =========== =========== =========== ===========
UNISOURCE ENERGY CORPORATION EXHIBIT A
CONSOLIDATING STATEMENT OF INCOME (LOSS)
TWELVE MONTHS ENDED DECEMBER 31, 2002
(in thousands except for per share amounts)
UNISOURCE TUCSON MILLENNIUM
ENERGY ELECTRIC ENERGY CONSOL. 2002
CORP. POWER CO. HOLDINGS UED ADJUST. CONSOL.
----------- ----------- ----------- ----------- ----------- -----------
Operating Revenues
Electric Retail Sales $ - $ 666,049 $ - $ - $ - $ 666,049
Electric Wholesale Sales - 177,908 - - - 177,908
Net Gain on TEP Forward Contracts
And MEG Trading Activities - 533 111 - - 644
Other Revenues - 6,603 19,910 2,520 (17,412) 11,621
----------- ----------- ----------- ----------- ----------- -----------
Total Operating Revenues - 851,093 20,021 2,520 (17,412) 856,222
----------- ----------- ----------- ----------- ----------- -----------
Operating Expenses
Fuel - 209,712 - - - 209,712
Purchased Power - 64,504 - - - 64,504
Coal Contract Termination Fee - 11,250 - - - 11,250
Other Operations and Maintenance 257 163,616 41,587 862 (17,412) 188,910
Depreciation and Amortization - 124,054 3,570 299 - 127,923
Amortization of Transition Recovery Asset - 24,554 - - - 24,554
Taxes Other Than Income Taxes 6 44,228 1,274 - - 45,508
----------- ----------- ----------- ----------- ----------- -----------
Total Operating Expenses 263 641,918 46,431 1,161 (17,412) 672,361
----------- ----------- ----------- ----------- ----------- -----------
Operating Income (263) 209,175 (26,410) 1,359 - 183,861
----------- ----------- ----------- ----------- ----------- -----------
Other Income (Deductions)
Interest Income - 20,094 558 2 - 20,654
Interest Income - Note Receivable
From UniSource Energy - 9,329 - - (9,329) -
Other Income (Deductions) 39,082 4,338 (4,148) - (39,083) 189
----------- ----------- ----------- ----------- ----------- -----------
Total Other Income (Deductions) 39,082 33,761 (3,590) 2 (48,412) 20,843
----------- ----------- ----------- ----------- ----------- -----------
Interest Expense
Long-Term Debt 9,329 65,620 - - (9,329) 65,620
Interest on Capital Leases - 87,783 18 - - 87,801
Interest Imputed on Losses Recorded
at Present Value - 1,166 - - - 1,166
Other Interest Expense - (720) 684 - - (36)
----------- ----------- ----------- ----------- ----------- -----------
Total Interest Expense 9,329 153,849 702 - (9,329) 154,551
----------- ----------- ----------- ----------- ----------- -----------
Income (Loss) Before Income Taxes 29,490 89,087 (30,702) 1,361 (39,083) 50,153
Income Taxes (3,785) 35,350 (15,222) 535 - 16,878
----------- ----------- ----------- ----------- ----------- -----------
Net Income (Loss) $ 33,275 $ 53,737 $ (15,480) $ 826 $ (39,083) $ 33,275
=========== =========== =========== =========== =========== ===========
Average Shares of Common Stock Outstanding (000) 33,665
Basic Earnings per Share $0.99
Average Shares of Common Stock Outstanding, Including Effect for Dilutive Securities (000) 34,222
Diluted Earnings per Share $0.97
Dividends Paid per Share $0.50
TUCSON ELECTRIC POWER COMPANY EXHIBIT A
CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2002
(in thousands)
TUCSON
ELECTRIC INVESTMENT CONSOL. 2002
POWER CO. SUBS * ADJUST. CONSOL.
----------- ----------- ----------- -----------
ASSETS
Utility Plant
Plant in Service $ 2,598,884 $ - $ - $ 2,598,884
Utility Plant Under Capital Leases 747,556 - - 747,556
Construction Work in Progress 59,926 - - 59,926
----------- ----------- ----------- -----------
Total Utility Plant 3,406,366 - - 3,406,366
Less Accumulated Depreciation and
Amortization (1,346,101) - - (1,346,101)
Less Accumulated Depreciation of
Capital Lease Assets (391,915) - - (391,915)
----------- ----------- ----------- -----------
Total Utility Plant - Net 1,668,350 - - 1,668,350
----------- ----------- ----------- ----------
Investments and Other Property
Investments in Lease Debt and Equity 191,867 - - 191,867
Other 18,643 5,032 (2,317) 21,358
----------- ----------- ----------- -----------
Total Investments and Other Property 210,510 5,032 (2,317) 213,225
----------- ----------- ----------- -----------
Note Receivable from UniSource Energy 79,462 - - 79,462
----------- ----------- ----------- -----------
Current Assets
Cash and Cash Equivalents 54,327 1,451 - 55,778
Accounts Receivable - Net 82,752 4,376 (4,553) 82,575
Materials and Fuel Inventory 44,500 - - 44,500
Current Regulatory Assets 11,778 - - 11,778
Deferred Income Taxes - Current 15,917 - - 15,917
Interest Receivable - Current 12,178 - - 12,178
Other 8,407 - - 8,407
----------- ----------- ----------- -----------
Total Current Assets 229,859 5,827 (4,553) 231,133
----------- ----------- ----------- -----------
Regulatory and Other Assets
Transition Recovery Asset 307,120 - - 307,120
Income Taxes Recoverable Through
Future Revenues 57,044 - - 57,044
Other Regulatory Assets 10,504 - - 10,504
Other Assets 46,752 - - 46,752
----------- ----------- ----------- -----------
Total Regulatory and Other Assets 421,420 - - 421,420
----------- ----------- ----------- -----------
Total Assets $ 2,609,601 $ 10,859 $ (6,870) $ 2,613,590
=========== =========== =========== ===========
* This column includes all the consolidated amounts, as applicable, of the directly owned
subsidiaries of TEP. See 1.I. for information regarding the subsidiaries owned by TEP.
TUCSON ELECTRIC POWER COMPANY EXHIBIT A
CONSOLIDATING BALANCE SHEET (CONTINUED)
DECEMBER 31, 2002
(in thousands)
TUCSON
ELECTRIC INVESTMENT CONSOL. 2002
POWER CO. SUBS ADJUST. CONSOL.
----------- ----------- ----------- -----------
CAPITALIZATION AND OTHER LIABILITIES
Capitalization
Common Stock $ 653,529 $ 2 $ (2) $ 653,529
Premium on Capital Stock - 263,378 (263,378) -
Capital Stock Expense (6,357) - - (6,357)
Accumulated Deficit (313,236) (261,063) 268,614 (305,685)
Accumulated Other Comprehensive Income -
Minimum Pension Liability (Net of Tax) (4,024) - - (4,024)
----------- ----------- ----------- -----------
Common Stock Equity 329,912 2,317 5,234 337,463
Capital Lease Obligations 801,508 - - 801,508
Long-Term Debt 1,128,410 - - 1,128,410
----------- ----------- ----------- -----------
Total Capitalization 2,259,830 2,317 5,234 2,267,381
----------- ----------- ----------- -----------
Current Liabilities
Current Obligations Under Capital Leases 42,872 - - 42,872
Current Maturities of Long-Term Debt 1,725 - - 1,725
Accounts Payable 58,237 498 (4,553) 54,182
Interest Accrued 60,238 - - 60,238
Taxes Accrued 35,742 30 - 35,772
Accrued Employee Expenses 13,370 - - 13,370
Other 7,543 - - 7,543
----------- ----------- ----------- -----------
Total Current Liabilities 219,727 528 (4,553) 215,702
----------- ----------- ----------- -----------
Deferred Credits and Other Liabilities
Deferred Income Taxes - Noncurrent 67,027 (123) 586 67,490
Other 63,017 8,137 (8,137) 63,017
----------- ----------- ----------- -----------
Total Deferred Credits and Other Liabilities 130,044 8,014 (7,551) 130,507
----------- ----------- ----------- -----------
Total Capitalization and Other Liabilities $ 2,609,601 $ 10,859 $ (6,870) $ 2,613,590
=========== =========== =========== ===========
TUCSON ELECTRIC POWER COMPANY EXHIBIT A
CONSOLIDATING STATEMENT OF INCOME (LOSS)
TWELVE MONTHS ENDED DECEMBER 31, 2002
(in thousands)
TUCSON
ELECTRIC INVESTMENT CONSOL. 2002
POWER CO. SUBS ADJUST. CONSOL.
----------- ----------- ----------- -----------
Operating Revenues
Electric Retail Sales $ 666,049 $ - $ - $ 666,049
Electric Wholesale Sales 177,908 - - 177,908
Net Unrealized Gain on Forward
Electric Sales and Purchases 533 - - 533
Other Revenues 6,604 - (1) 6,603
----------- ----------- ----------- -----------
Total Operating Revenues 851,094 - (1) 851,093
----------- ----------- ----------- -----------
Operating Expenses
Fuel 209,712 - - 209,712
Purchased Power 64,504 - - 64,504
Coal Contract Termination Fee 11,250 - - 11,250
Other Operations and Maintenance 163,616 - - 163,616
Depreciation and Amortization 124,054 - - 124,054
Amortization of Transition Recovery Asset 24,554 - - 24,554
Taxes Other Than Income Taxes 44,228 - - 44,228
----------- ----------- ----------- -----------
Total Operating Expenses 641,918 - - 641,918
----------- ----------- ----------- -----------
Operating Income 209,176 - (1) 209,175
----------- ----------- ----------- -----------
Other Income (Deductions)
Interest Income 20,065 29 - 20,094
Interest Income - Note Receivable from
UniSource Energy 9,329 - - 9,329
Other Income 4,289 (72) 121 4,338
----------- ----------- ----------- -----------
Total Other Income (Deductions) 33,683 (43) 121 33,761
----------- ----------- ----------- -----------
Interest Expense
Long-Term Debt 65,620 - - 65,620
Interest on Capital Leases 87,783 - - 87,783
Interest Imputed on Losses Recorded
at Present Value 1,166 - - 1,166
Other Interest Expense (720) 2 (2) (720)
----------- ----------- ----------- -----------
Total Interest Expense 153,849 2 (2) 153,849
----------- ----------- ----------- -----------
Income Before Income Taxes 89,010 (45) 122 89,087
Income Taxes 35,273 77 - 35,350
----------- ----------- ----------- -----------
Net Income (Loss) $ 53,737 $ (122) $ 122 $ 53,737
=========== =========== =========== ===========
EXHIBIT B
---------
An organizational chart showing the relationship of each EWG or foreign
utility company to associate companies in the holding company system.
See attached organizational charts for COPESA.
COPESA PROJECT OWNERSHIP STRUCTURE
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Nations
Energy
Corporation
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-
-
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Nations Equity
International Partners
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- -
- -
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-
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COPESA
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