News Release

December 2020 Special Open Meeting Highlights

For Immediate Release | 12-24-20

Media Contact | Nicole Capone

Direct | 602-542-0713

E-Mail | NCapone@azcc.gov

Special Open Meeting Highlights

Phoenix — The Arizona Corporation Commission held a Special Open Meeting on December 22, 2020, to discuss and vote on various utilities agenda items. Here is a brief recap of the meeting highlights:

Commissioners Approve Rate Increase for Tucson Electric Power Company Customers

Commissioners approved a rate increase for Tucson Electric Power Company (TEP) customers on Tuesday. The new rates will become effective January 1, 2021.

Residential customers can expect to see an increase of approximately $5.20 with typical usage on TEP's Basic pricing plan. The new rates will also expand the bill-payment assistance to the Company's low-income customers. Low-income customers can expect to see a $3 increase in savings.

The increase will assist the Company with the cost of flexible new generating resources, more resilient energy systems and other upgrades already serving customers. This increase allows the Company to transition to a cleaner energy portfolio.

All documents related to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket number E-01933A-19-0028.

Arizona Corporation Commission Approves EPCOR Water Arizona, Inc. Acquisition of Johnson Utilities

Commissioners approved a joint application by EPCOR Water Arizona, Inc. (EPCOR) and Johnson Utilities (Johnson) allowing the purchase of Johnson by EPCOR. On October 5, 2020, the companies filed a joint application requesting approval from the Corporation Commission to transfer the Certificates of Convenience and Necessity for Johnson, the water and wastewater system assets, determination of an acquisition premium, approval of a carryback note and approval for EPCOR to defer non-recurring acquisition and transition related costs for potential recovery in a future rate case.

EPCOR will acquire Johnson for $110,300,000. Part of the deal that the Commissioner's approved includes a $45 million deferred debit to be recovered after the first rate case EPCOR files as the owner. The deferred debit will be recovered through a monthly surcharge over a 15-year period. Another stipulation of the deal is that three pending dockets at the Corporation Commission related to Johnson be closed. Within 120 days of this order being finalized, both parties must provide the Corporation Commission with proof of acquisition, not until that is filed with the Commission will the Certificates of Convenience and Necessity be transferred to EPCOR.

Following dozens of complaints regarding water and wastewater service issues in the Johnson service territory of San Tan Valley, the Corporation Commission appointed EPCOR as interim manager of the embattled utility in July 2018. This sale will ensure that residents of San Tan Valley will have safe and reliable water and wastewater service moving forward and allow residential development to continue.

All documents related to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket numbers WS-0103A-20-0298 and WS-02987A-20-0298.

A complete broadcast of the Commissioner's December 22, 2020 Open Meeting is available on the Corporation Commission's website: http://azcc.gov/live.

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