UniSource customers benefitted from winter bill savings over five years as a result of the
acquisition of UniSource’s parent company by Fortis Inc., which owns utilities that serve more
than 3 million customers across Canada and in the United States and the Caribbean.

Under terms of Fortis’ August 2014 acquisition of UNS Energy Corporation, UniSource customers received bill credits totaling nearly $30 million. Savings of $10 million were applied in year one and savings of $5 million are applied annually over the following four years.

UniSource applied these credits to the monthly Customer Charge on electric bills and to the Basic Service and Meter Charge on gas bills issued during winter months. Additional credits were applied through temporary reductions in usage-based charges, which vary with consumption.

Gas Customers

Credits for gas customers applied to the Basic Service and Meter Charge continued through January 2019. These credits ranged from $1.19 per month for residential customers with average gas usage to $27.39 per month for commercial customers with high gas usage.

Monthly Acquisition Bill Credits for Residential Gas Customers
Credit applied
to monthly
Basic Service and Meter Charge
Average credit applied
to monthly Purchase
Gas Adjustor
(PGA)*
Total monthly
bill credits
October 2014 — March 2015 $1.19 $0.83 $2.02
October 2015 — March 2016 $1.19 n/a $1.19
October 2016 — March 2017 $1.19 n/a $1.19
October 2017 — March 2018 $1.19 n/a $1.19
October 2018 — January 2019 $1.19 n/a $1.19
* Based on average monthly usage of 64 therms from October 1, 2014 to March 31, 2015.

These bill credits represent the only direct impact on rates that resulted from the acquisition. UniSource will not seek to recover any transaction-related costs in future rates. The ACC will continue to set the company’s rates based on the costs incurred to provide safe, reliable service.

Electric Customers

For electric customers, bill credits applied to the Customer Charge continued through February 2019. These credits ranged from $1.15 per month for residential customers to $143.78 per month for the largest commercial and industrial customers.

Monthly Acquisition Bill Credits for Residential Electric Customers
Credit applied
to monthly
Customer Charge
Average credit applied
to monthly Purchase
Power and Fuel
Adjustment Charge
(PPFAC)*
Total monthly
bill credits
October 2014 — March 2015 $1.15 $0.69 $1.84
October 2015 — March 2016 $1.15 n/a $1.15
October 2016 — March 2017 $1.15 n/a $1.15
October 2017 — March 2018 $1.15 n/a $1.15
October 2018 — February 2019 $1.15 n/a $1.15
* This amount is based on average monthly usage of 700 kilowatt hours from October 1, 2014 to March 31, 2015.

These bill credits represent the only direct impact on rates that will result from the acquisition. UES will not seek to recover any transaction-related costs in future rates. The ACC will continue to set the company’s rates based on the costs incurred to provide safe, reliable service.