UniSource Energy Corporation
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UniSource Energy Corporation 2007 Annual Shareholders’ Meeting
description
2007 Annual Shareholders’ Meeting. UniSource Energy Corporation. Business Agenda. James S. Pignatelli Chairman. Director since 1998 Boards TEP, Chairman UniSource Energy Services Millennium Energy Holdings. Lawrence J. Aldrich. Director since 2000 Boards TEP - PowerPoint PPT Presentation
Transcript of UniSource Energy Corporation
UniSource Energy
Corporation
2007 Annual Shareholders’
Meeting
2
Business Agenda
3
James S. Pignatelli Chairman
• Director since 1998
• Boards
– TEP, Chairman
– UniSource Energy Services
– Millennium Energy Holdings
4
Lawrence J. Aldrich
• Director since 2000
• Boards
– TEP
– UniSource Energy Services
– Millennium Energy Holdings
• UNS Committees
– Audit
– Compensation
– Environmental, Safety & Security
5
Barbara M. Baumann
• Director since 2005
• Boards
– TEP
– UniSource Energy Services
• UNS Committees
– Audit, Chairperson
– Compensation
– Corporate Governance & Nominating
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Larry W. Bickle
• Director since 1998• Boards
– TEP– UniSource Energy Services– Millennium Energy Holdings
• UNS Committees– Finance– Environmental, Safety &
Security, Chairperson
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Elizabeth T. Bilby
• Director since 1995
• Boards
– TEP
– UniSource Energy Services
– Millennium Energy Holdings
• UNS Committees
– Finance
– Environmental, Safety & Security
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Harold W. Burlingame
• Director since 1998
• Boards
– TEP
– UniSource Energy Services
• UNS Committees
– Compensation, Chairperson
– Corporate Governance &
– Nominating
– Finance
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John L. Carter
• Director since 1996
• Boards
– UniSource Energy, Lead Director
– TEP
– UniSource Energy Services
– Millennium Energy Holdings
• UNS Committees
– Audit
– Compensation
– Corporate Governance &
– Nominating
– Finance
– Environmental, Safety & Security
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Robert A. Elliott
• Director since 2003
• Boards
– TEP
– UniSource Energy Services
• UNS Committees
– Compensation
– Corporate Governance & Nominating, Chairperson
– Finance
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Daniel W.L. Fessler
• Director: 1998-2003; since 2005
• Boards
– TEP
– UniSource Energy Services
• UNS Committees
– Compensation
– Corporate Governance & Nominating
– Environmental, Safety & Security
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Kenneth Handy
• Director since 2001
• Boards
– TEP
– UniSource Energy Services
• UNS Committees
– Audit
– Finance
– Environmental, Safety & Security
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Warren Y. Jobe
• Director since 2001
• Boards
– TEP
– UniSource Energy Services
• UNS Committees
– Audit
– Corporate Governance & Nominating
– Finance, Chairperson
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Ramiro G. Peru
• Director since 2008
• Boards
– TEP
– UniSource Energy Services
• UNS Committees
– Compensation
– Finance
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Gregory A. Pivirotto
• Director since 2008
• Boards
– TEP
– UniSource Energy Services
• UNS Committees
– Audit
– Corporate Governance & Nominating
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Joaquin Ruiz
• Director since 2005
• Boards
– TEP
– UniSource Energy Services
• UNS Committees
– Audit
– Compensation
– Environmental, Safety & Security
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UniSource Energy Corporation and Tucson Electric Power Company
Officers• James S. Pignatelli
• Michael J. DeConcini
• Raymond S. Heyman
• Kevin P. Larson
• Philip J. Dion III
• Kentton C. Grant
• Thomas N. Hansen
• Arie Hoekstra
• David G. Hutchens
• Karen G. Kissinger
• Steven W. Lynn
• Thomas A. McKenna
• Catherine E. Ries
• Herlinda H. Kennedy
UniSource Energy
Corporation
2007 Annual Shareholders’
Meeting
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2007: Stepping Up to Meet Challenges
• Incurred higher fuel and purchased power costs to meet rising
customer demand
• Reliability challenged by severe summer storms, including
flood at Irvington campus
• Increased investment in system infrastructure
• TEP’s long-frozen rates limited ability to recover rising costs
• Rate cases underway for TEP and UNS Electric
• Rate increase approved in November 2007 for UNS Gas does
not cover costs of service; new case filed in February 2008
• Raised dividend for 8th consecutive year
UNS Net Income(millions)
$67 $67
$9
2006 2007
$58 $53
$9
UNS TEP UES
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Total Shareholder Return
Value of $100 Invested January 1, 2002
$212
$237
$176
$0
$50
$100
$150
$200
$250
2002 2003 2004 2005 2006 2007 YTDMay 1, 2008
UniSource Energy
EEI Index
S&P 500
2008 Year-to-Date Returns
UniSource Energy 1.8%
S&P 500 (3.5%)
EEI Index (4.5%)
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Dividend Growth
Annual Dividend Per Share
15% Annual Growth Rate
$0.32
$0.40
$0.50
$0.60$0.64
$0.76
$0.84
2000 2001 2002 2003 2004 2005 2006
* Estimated based on 1st quarter dividend of $0.24
2007
$0.90
2008*
$0.96*
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Rising Energy Demand from TEP Customers
Residential Use Per Customer Retail Peak Energy Use
(in kWh)
13% Total Increase
(in Megawatts)
26% Total Increase
1,899
2,060 2,088
2,225
2,365 2,386
2002 2003 2004 2005 2006 2007
9,842
10,249 10,231
10,48410,681
11,129
2002 2003 2004 2005 2006 2007
Customer Growth
2.0%
Residential Energy Use per Customer
2.5%
Retail Peak Energy Use
4.7%
Change in TEP’s Average Residential rate
(1%)
2002-2007 Average Annual Growth Rates
+ =
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Dynamic Growth at UniSource Energy Services
• Subsidiaries UNS Gas and UNS Electric have added a combined 27,000 customers over the last four years, increasing UES’ total customer base by 13%
• Annual customer growth has moderated and is expected to be 3% to 4% going forward
• Total capital investments of nearly $230 million since 2003
UES Retail Customers
180,000
190,000
200,000
210,000
220,000
230,000
240,000
250,000
2003 2004 2005 2006
13% Increase
2007
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Laying a Foundation for the Future
Distribution$532 million
Transmission $363 million
Generation$361 million
Environmental$102 million
TEP Capital Investments2008-2012$1.4 billion
Pinal West Substation
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Laying a Foundation for the Future
UNS Gas$120 million
UNS Electric$199 million
BMGS$15 million
UES Capital Investments2008-2012
$330 million
Black Mountain Generating Station
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Focused on Future Rates
TEP
• Seeking ACC approval of tentative settlement to pending rate case
UNS Gas
• Request for 7% rate increase on hold
• 4% rate increase approved Nov. 2007 does not cover current costs of service
UNS Electric
• Seeking a 5.5% rate increase
• Requesting fuel and purchased power clause to cover cost of replacing power supply contract
• Current rates have been frozen since August 2003
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TEP & ACC StaffTentative Settlement Agreement
• 6% base rate increase over TEP’s current average retail rate• Purchased power and fuel adjustor clause• Base rates frozen until January 1, 2013• Rates for generation based on cost-of-service methodology• Termination of 1999 Settlement Agreement
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Monthly Bill Comparison
$82.55
$108.22
$92.53
TEP Current
APS Current
SRP Current
$87.35
$116.98
TEP Proposed
APS Requested
Average Monthly Residential Bill
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Clean Renewable Energy Resources
• TEP’s 4.6 Springerville Solar System is the most productive PV array in the Western Hemisphere
• SunShare subsidies support installation of solar energy systems across Arizona
• GreenWatts program has sponsored solar installations at dozens of schools, parks and public places
• New Renewable Energy Standard calls for TEP and UES to secure 15% of power from renewable resources by 2025
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Award-Winning Volunteer Program
• During 2007, UniSource Energy employees joined friends and family members in contributing more than 40,000 volunteer hours to local charities
• UniSource Energy backed employees’ efforts with more than $850,000 of direct and indirect assistance
• TEP’s Community Action Team was recognized with the 2007 Governor’s Volunteer Service Award
UniSource Energy
Corporation
2007 Annual Shareholders’
Meeting
