Kim:

I wonder if you can get the scoop here.  Why would Tucson sell to Phelps 
Dodge at a below market?  Are they doing it for jobs, etc.?  Let's discuss.

C

---------------------- Forwarded by Chris H Foster/HOU/ECT on 03/30/2001 
09:24 AM ---------------------------


Christopher McKey
03/29/2001 08:48 AM
Sent by: Christopher McKey
To: Chris H Foster/HOU/ECT@ECT
cc:  
Subject: PD

In case you hadn't seen this. Your thoughts?

CM
---------------------- Forwarded by Christopher McKey/FRA/ECT on 29/03/2001 
17:48 ---------------------------


Thomas Boettcher@ENRON
29/03/2001 16:39
To: Christopher McKey/LON/ECT@ECT, Michael Farmer/EU/Enron@ENRON, Joe 
Robertson/NYC/MGUSA@MGUSA
cc:  
Subject: 


16:36 29Mar2001 TEP, Phelps Dodge Sign Long-Term Power Contract <UNS.N>

TEP, Phelps Dodge Sign Long-Term Power
Contract
   TUCSON, Ariz.--(BUSINESS WIRE)--March 29, 2001--Tucson Electric
Power Co. (TEP) has signed a five-year wholesale contract to supply 60
megawatts of electricity to Phelps Dodge Energy Services.
   The contract calls for TEP, beginning in March of 2001, to supply
the power at all times except during the company's peak customer
energy demand periods from July through September of each year.
   TEP Chairman, President and Chief Executive Officer James S.
Pignatelli said the contract is an important one for both companies.
"This agreement provides a comfort factor for Phelps Dodge as it plans
ahead for its energy needs," Pignatelli said. "And for TEP, the
contract provides a stable, profitable margin for five years and a
solid boost to our financial outlook in a volatile energy market."
   Pignatelli said the company expects the agreement to generate
revenues of about $30 million annually.
   The contract gives Phelps Dodge the option of receiving the power
at several of its operations outside TEP's service territory. Under
the contract, TEP also can interrupt delivery of power to Phelps Dodge
if the utility experiences significant loss of any electric generating
resources.
   Separate from this agreement, the Phelps Dodge Sierrita copper and
molybdenum mine south of Tucson is a TEP retail customer.
   TEP is the primary subsidiary of UniSource Energy Corp.
(NYSE: UNS), and Arizona's second-largest investor-owned electric
utility.
   TEP Public Affairs
   P.O. Box 711
   Tucson, AZ 85702
   520/884-3742
   www.tucsonelectric.com
   --30--twt/ix*
   CONTACT: Tucson Electric Power Co., Tucson
           Steve Lynn, 520/884-3629 (News Media)
           Durga Waite, 520/884-3650 (Financial Analyst)
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