Tucson Electric Power Co., Citizens Communications receive regulatory approval for major transmission line

TUCSON, Ariz., Jan. 4, 2002 – The Arizona Corporation Commission (ACC) yesterday unanimously approved issuance of a Certificate of Environmental Compatibility that will enable construction of a major new 345,000-volt electric transmission line link in southern Arizona.

Tucson Electric Power Co. (TEP), a subsidiary of UniSource Energy Corp. (NYSE:UNS) and Citizens Communications Co. (Citizens) had jointly proposed building the 62-mile-long line that would link a TEP substation at Sahuarita, Ariz. with the electric system operated by Citizens in Santa Cruz County. The line would serve Citizens’ customers in and around Nogales, Ariz. near the border with Mexico.

Steve Glaser, TEP senior vice president and chief operating officer, said the Commission’s decision was an important one for the energy future of Arizona.

“By approving this transmission line, the ACC has provided additional reliability for electric distribution systems throughout southern Arizona,” Glaser said. “TEP will continue to work with the Mexican utility to establish the international link which makes power exchanges between our two countries possible.”

The ACC granted unanimous approval for the line, citing the fact that Arizona’s population grew by 175,000 last year alone. The Commission also acknowledged that delaying the development of this line now would only make it more difficult to construct in the future.

Glaser said construction on the $70 million, 345,000-volt line could begin as early as the first quarter of 2003. Extensive engineering and environmental studies first must be conducted to determine the best alignment for the line within the approved route.

The study corridor approved by the ACC in sparsely settled desert regions west of Interstate 19 is two miles in width; however, the eventual right-of-way needed will be only 125 feet. TEP must also secure permission from the U.S. Forest Service to construct the portion of the line that will pass through the Coronado National Forest.

The ACC had previously ordered that Citizens complete a new transmission line feed to its service territory no later than Dec. 31, 2003.

In conjunction with the transmission project to the Nogales area, TEP has applied to the U.S. Department of Energy for a Presidential Permit that would allow building an extension of the 345kV line across the international border to connect with the Mexican utility system in the state of Sonora.

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