TEP and its predecessor companies have served the greater Tucson metropolitan area for 126 years. TEP was incorporated in the State of Arizona in 1963. TEP is a regulated electric utility company serving approximately 425,000 retail customers. TEP’s service territory covers 1,155 square miles and includes a population of over one million people in Pima County, as well as parts of Cochise County. TEP's principal business operations include generating, transmitting, and distributing electricity to its retail customers. In addition to retail sales, TEP sells electricity, transmission, and ancillary services to other utilities, municipalities, and energy marketing companies on a wholesale basis. TEP is subject to comprehensive state and federal regulation. The regulated electric utility operation is TEP's only segment. TEP is a wholly owned subsidiary of UNS Energy Corporation (UNS Energy), a utility services holding company. UNS Energy is an indirect wholly owned subsidiary of Fortis Inc. (Fortis) which is a leader in the North American electric and gas utility business.
Because weather and other factors cause seasonal fluctuations in sales of power, our quarterly results of operations are not indicative of annual results. TEP's summer peak load occurs during the third quarter of the year when cooling demand is higher, which results in higher revenue during this period. By contrast, lower sales of power occur during the first quarter of the year due to mild winter weather in our retail service territory.
TEP reported net income of $42 million in the second quarter of 2019 compared with net income of $58 million in the second quarter of 2018. The decrease of $16 million, or 27%, was primarily due to:
TEP reported net income of $68 million in the first six months of 2019 compared with net income of $81 million in the first six months of 2018. The decrease of $13 million, or 16%, was primarily due to: