ACC takes testimony tonight on proposed sale of UniSource

KINGMAN – The Arizona Corporation Commission will take testimony in Kingman this evening about the proposed acquisition of UniSource Energy.

The hearing will begin at 6 in the Mohave County Board of Supervisors meeting room at 901 E.

Beale St.

The proposed buyer is Saguaro Utility Group, a private equity partnership.

UniSource Energy is the parent company of UniSource Energy Systems, which supplies electricity and natural gas to Kingman, Lake Havasu City and most of Mohave County.

UniSource also is the parent of Tucson Electric Power.

The two subsidiaries provide electricity and gas service to approximately 550,000 customers in Arizona.

UniSource purchased the gas and electric assets of Citizens Communication in a deal that closed in August 2003.

The sale to Saguaro Utility Group would not change rates for customers, the commission has said.

Tucson Electric Power rates are frozen until 2008.

UniSource Energy Services rates for gas and electricity are frozen through Aug.

1, 2007.

UniSource filed an application on Dec.

29, 2003, to be acquired by Saguaro Utility Group.

Sage Mountain LLC, an Arizona company managed and owned by Fredrick Rentschler, is a general partner with Saguaro.

The limited partners are Kohlberg Kravis Roberts and Co., J.P.

Morgan Partners and Wachovia Capital Partners.

The corporation commission staff has recommended against reorganization of the company.

Steve Lynn, corporate communications director for UniSource, said representatives of both companies should be able to answer questions during the hearing.

A second hearing was held in Lake Havasu City today.

The next step in the approval process will be a hearing before an administrative judge, who will take testimony and make a recommendation to the commission.

The commission will then vote in an open meeting later this year.

Testimony and staff reports can be reviewed on the commission's Web site at www.cc.state.az.us/utility/electric/uecr.htm.