Content analysis
?Positive | ||
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Uncertain | ||
Constraining | ||
Legalese | ||
Litigous | ||
Readability |
7th grade Good
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New words:
adequate, advocate, Ambient, aspirational, automatic, battery, California, Center, Columbia, committee, consent, coverage, cumulative, decree, disapprove, disapproved, face, FIP, forthcoming, greenhouse, interference, IRS, judicial, landfill, LLC, negative, Neighbor, nonattainment, Noncurrent, Northern, oversight, ozone, pace, PPA, prohibit, reach, REC, Register, registration, released, retrospectively, Roadrunner, roll, segment, shelf, single, stable, study, suggested, Wilmot, Winchester
Removed:
accrued, acknowledged, adjustor, Alternative, annum, ASC, assessed, ASU, BBtu, bearing, British, CAMT, Codification, collectively, commencing, decade, defer, Deferral, degree, density, determination, enacted, evaluate, evaluating, Fahrenheit, firm, found, gain, greatest, group, GWh, heat, hour, insignificant, intent, legislation, liquid, measure, membership, minimum, noted, occurred, optional, ordered, par, pound, practical, premium, proceeding, purpose, quantity, redeem, redeemed, reference, repaid, repay, requested, servicing, settlement, shift, statute, sunset, sustainable, temperature, thermal, thousand, Topic, transportation, uncollected, Uniform, verifiable
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 closures 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, disruptions, or unfavorable changes 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 and fund the Company's operations.
- 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 seasonal capacity shortfalls which could result in an inability for the Company to reliably serve load requirements and 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.
- 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.
- Events beyond our control, such as public health crises, geopolitical tensions, natural disasters, or other catastrophic events, could adversely affect our business, results of operations and financial condition.
Management Discussion
- •Cost Recovery Mechanisms — We record operating revenue related to cost recovery mechanisms that allow for more timely recovery of fuel and purchased power costs and certain operations and maintenance costs between rate case proceedings. These mechanisms, which include PPFAC, the RES tariff, and DSM, 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 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.