TEP and its predecessor companies have served the greater Tucson metropolitan area for 127 years. TEP was incorporated in the State of Arizona in 1963. TEP is a regulated electric utility company serving approximately 429,000 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, a utility services holding company. UNS Energy is an indirect wholly owned subsidiary of Fortis which is a leader in the North American electric and gas utility business.
Company profile
Employees
Incorporated
Location
Fiscal year end
Industry (SIC)
SEC CIK
Calendar
28 Jul 22
19 Aug 22
31 Dec 22
Financial summary
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Cash burn rate (est.) | Burn method: Change in cash | Burn method: Operating income | Burn method: FCF (opex + capex) | Last Q | Avg 4Q | Last Q | Avg 4Q | Last Q | Avg 4Q |
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Cash on hand (at last report) | 167.98M | 167.98M | 167.98M | 167.98M | 167.98M | 167.98M |
Cash burn (monthly) | 455.33K | 15.65M | (no burn) | (no burn) | (no burn) | (no burn) |
Cash used (since last report) | 765.31K | 26.3M | n/a | n/a | n/a | n/a |
Cash remaining | 167.21M | 141.68M | n/a | n/a | n/a | n/a |
Runway (months of cash) | 367.2 | 9.1 | n/a | n/a | n/a | n/a |
Financial report summary
?Risks
- A significant decrease in the demand for electricity in TEP's service area would negatively impact retail sales and adversely affect results of operations, net income, and cash flows at TEP.
- The revenues, results of operations, and cash flows of TEP are seasonal and are subject to weather conditions and customer usage patterns, which are beyond the Company’s control.
- TEP is dependent on a small number of customers for a significant portion of future revenues. A reduction in the electricity sales to these customers would negatively affect results of operations, net income, and cash flows at TEP.
- TEP's business is significantly impacted by government legislation, regulation and oversight. TEP's inability to recover its costs, earn a reasonable return on its investments, or comply with current regulations would negatively affect its results of operations, net income, and cash flows.
- Changes made to legislation, regulation, or regulatory structure could negatively affect TEP's results of operations, net income, and cash flows.
- Early closure of TEP's coal-fired generation facilities could result in TEP recognizing regulatory impairments or increased cost of operations if recovery of TEP's remaining investments in such facilities and the costs associated with early closures are not permitted through rates charged to customers.
- Volatility or disruptions in the financial markets, rising interest rates, or unanticipated financing needs, could increase TEP's financing costs, limit access to the credit or bank markets, affect the Company's ability to comply with financial covenants in debt agreements, and increase TEP's pension funding obligations. Such outcomes may negatively affect liquidity and TEP's ability to carry out the Company's financial strategy.
- Generation facility closings or changes in power flows into TEP's service territory could require us to redeem or defease some or all of the tax-exempt bonds issued for the Company's benefit, which could result in increased financing costs.
- The operation of generation facilities and transmission and distribution systems involves risks and uncertainties that could result in reduced generation capability or unplanned outages that could negatively affect TEP’s results of operations, net income, and cash flows.
- The operation of generation facilities and transmission systems on tribal lands may create operational and financial risks for TEP that, if realized, could negatively affect TEP’s results of operations, net income, and cash flows.
- TEP receives power from certain generation facilities that are jointly-owned with, or operated by, third parties. Therefore, TEP may not have the ability to affect the management or operations at such facilities which could negatively affect TEP’s results of operations, net income, and cash flows.
- The effects of climate change may create operational and financial risks for TEP that, if realized, could negatively affect TEP's results of operations, net income, and cash flows.
- TEP is subject to physical attacks which could have a negative impact on the Company's business and results of operations.
- TEP is subject to cyber-attacks which could have a negative impact on the Company's business and results of operations.
- The widespread outbreak of an illness or any other communicable disease, or any other public health crisis, including the COVID-19 pandemic, could adversely affect our business, results of operations and financial condition.
- Changes in tax regulation may negatively affect the results of operations, net income, and cash flows of TEP.
- The failure to attract, retain, and manage an appropriately qualified workforce could negatively impact TEP’s business and results of operations.
Management Discussion
- •Cost Recovery Mechanisms — TEP records operating revenue related to cost recovery mechanisms that allow for more timely recovery of fuel and purchase power costs and certain operations and maintenance costs between rate case proceedings. These mechanisms, which include PPFAC, RES Tariff, DSM, and TEAM are generally reset annually through separate filings with the ACC. See Note 2 of Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for additional information on cost recovery mechanisms.
- •Short-Term Wholesale Sales — Revenues related to short-term wholesale sales are primarily related to ACC jurisdictional generation assets and are returned to retail customers by offsetting revenues against fuel and purchased power costs eligible for recovery through the PPFAC cost recovery mechanism.
- •Springerville Units 3 and 4 — Operations and maintenance expenses related to Springerville Units 3 and 4 are reimbursed by Tri-State Generation and Transmission Association, Inc., the lessee of Springerville Unit 3, and Salt River Project Agricultural Improvement and Power District, the owner of Springerville Unit 4, through participant billings recorded in Operating Revenues on the Condensed Consolidated Statements of Income.
Content analysis
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Readability |
7th grade Good
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New words:
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Removed:
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Financial reports
Current reports
8-K
Other Events
17 Feb 22
8-K
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
15 Oct 21
8-K
Other Events
11 May 21
8-K
Regulation FD Disclosure
23 Dec 20
8-K
Other Events
25 Sep 20
8-K
Other Events
10 Aug 20
8-K
Tucson Electric Power Plans Dramatic Clean Energy Expansion, 80 Percent Carbon Emissions Reduction
26 Jun 20
8-K
Other Events
9 Apr 20
8-K
Other Events
21 Feb 20
8-K
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
13 Dec 19
Registration and prospectus
S-3ASR
Automatic shelf registration
4 May 22
424B2
Prospectus for primary offering
16 Feb 22
FWP
Free writing prospectus
15 Feb 22
424B3
Prospectus supplement
15 Feb 22
424B3
Prospectus supplement
7 May 21
FWP
Free writing prospectus
6 May 21
424B3
Prospectus supplement
6 May 21
424B3
Prospectus supplement
6 Aug 20
FWP
Free writing prospectus
5 Aug 20
424B3
Prospectus supplement
5 Aug 20
Other
UPLOAD
Letter from SEC
25 May 22
CORRESP
Correspondence with SEC
19 May 22
UPLOAD
Letter from SEC
16 May 22
EFFECT
Notice of effectiveness
17 Jun 19
CORRESP
Correspondence with SEC
11 Jun 19
UPLOAD
Letter from SEC
10 Jun 19
EFFECT
Notice of effectiveness
27 Nov 18
CORRESP
Correspondence with SEC
25 Nov 18
CORRESP
Correspondence with SEC
25 Nov 18
EFFECT
Notice of effectiveness
26 May 15
Ownership
11-K
Annual report of employee stock purchases
23 Jun 22
11-K
Annual report of employee stock purchases
15 Jun 21
11-K
Annual report of employee stock purchases
15 Jun 20
11-K
Annual report of employee stock purchases
18 Jun 19
11-K
Annual report of employee stock purchases
26 Jun 13
11-K
Annual report of employee stock purchases
1 Jul 09
11-K
Annual report of employee stock purchases
26 Jun 08
11-K
Annual report of employee stock purchases
26 Jun 07
11-K
Annual report of employee stock purchases
27 Jun 02