Federal regulators have opened an investigation into the rates Tucson Electric Power and other companies owned by Canadian-based parent Fortis Inc. charge for wholesale power.
The Federal Energy Regulatory Commission (FERC) opened the investigation Monday into what documents call βthe justness and reasonablenessβ of market-based wholesale rates in the TEP area.
In a separate order, FERC is also looking into wholesale rates charged by Arizona Public Service, which is not owned by Fortis, in TEPβs transmission territory.
The investigation is not an allegation of wrongdoing.
βThe order was issued in response to a filing we made,β said TEP spokesman Joseph Barrios.
That filing was made because federal regulators require companies such as TEP and its parent firms to apply every three years to be eligible to sell power on the wholesale market.
βThe overall concern is that FERC wants to ensure that there is integrity in the wholesale power market,β Barrios said.
TEP and its parent company sell power to other providers in the region. Those providers then sell power to their own retail residential and business customers.
FERC regulates wholesale power sales while the regulators in each state control the retail markets.
The intent of federal regulators is to try to prevent wholesalers from manipulating the markets, which could have an effect on the retail markets.
A FERC spokesman in Washington, D.C., would not comment other than to confirm an investigation has been initiated.
Barrios said TEP has been given 60 days to file additional documentation with federal regulators to assist in its investigation.
The additional information is intended to show FERC that the company is not attempting to unfairly raise prices in its market.
βWe expect when we do it will resolve the matter,β Barrios said.
FERC has also asked about TEP affiliates UNS Electric Inc., which serves Santa Cruz and Mohave counties; Unisource Energy Development Co., a power-plant development arm; and Central Hudson Gas & Electric, another Fortis company that operates in New York.
The federal investigation process is unrelated to TEPβs residential rate case, in which it seeks authority from state regulators to increase retail rates.
