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RELATED PARTY TRANSACTIONS
 12 Months Ended
Dec. 31, 2016
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS
TEP engages in various transactions with Fortis, UNS Energy, and its affiliated subsidiaries including Unisource Energy Services, Inc. (UES), UNS Electric, UNS Gas, and Southwest Energy Solutions, Inc. (SES) (collectively, UNS Energy Affiliates). These transactions include the sale and purchase of power and transmission services, common cost allocations, and the provision of corporate and other labor related services.
The following table presents the components of related party balances included in Accounts Receivable, Net and Accounts Payable on the Consolidated Balance Sheets:
 
December 31,
(in millions)
2016
 
2015
Receivables from Related Parties
 
 
 
UNS Electric
$
7

 
$
6

UNS Gas
2

 
1

Total Due from Related Parties
$
9

 
$
7

 
 
 
 
Payables to Related Parties
 
 
 
SES
$
2

 
$
2

UNS Electric
—

 
2

UNS Energy
—

 
2

Total Due to Related Parties
$
2

 
$
6

The following table presents the components of related party transactions included in the Consolidated Statements of Income:
 
Years Ended December 31,
(in millions)
2016
 
2015
 
2014
Goods and Services Provided by TEP to Affiliates
 
 
 
 
 
Transmission Revenues, UNS Electric(1) 
$
7

 
$
6

 
$
1

Wholesale Revenues, UNS Electric(1)
—

 
2

 
3

Control Area Services, UNS Electric(2)
2

 
2

 
3

Common Costs, UNS Energy Affiliates(3)
14

 
12

 
13

 
 
 
 
 
 
Goods and Services Provided by Affiliates to TEP
 
 
 
 
 
Wholesale Revenues, UNS Electric(1)
1

 
1

 
4

Supplemental Workforce, SES(4)
14

 
16

 
16

Corporate Services, UNS Energy(5)
7

 
7

 
14

Corporate Services, UNS Energy Affiliates(6)
4

 
1

 
1

(1) 
TEP and UNS Electric sell power and transmission services to each other. Wholesale power is sold at prevailing market prices while transmission services are sold at FERC approved rates through the applicable Open Access Transmission Tariff.
(2) 
TEP charges UNS Electric for control area services under a FERC-approved Control Area Services Agreement.
(3) 
Common costs (information systems, facilities, etc.) are allocated on a cost-causative basis and recorded as revenue by TEP. The method of allocation is deemed reasonable by management and is reviewed by the ACC as part of the rate case process.
(4) 
SES provides supplemental workforce and meter-reading services to TEP based on related party service agreements. The charges are based on cost of services performed and deemed reasonable by management.
(5) 
Costs for corporate services at UNS Energy are allocated to its subsidiaries using the Massachusetts Formula, an industry accepted method of allocating common costs to affiliated entities. TEP's allocation is approximately 82% of UNS Energy's allocated costs. Corporate Services, UNS Energy includes legal and audit fees. Beginning in 2015, following the August 2014 Fortis acquisition, it includes Fortis management fees of approximately $6 million in 2016 and $5 million in 2015.
(6) 
Costs for corporate services (e.g., finance, accounting, tax, legal, and information technology) and other labor services for UNS Energy Affiliates are directly assigned to the benefiting entity at a fully burdened cost when possible.
CONTRIBUTION FROM PARENT
UNS Energy made no equity contributions to TEP in 2016. TEP received contributions from UNS Energy of $180 million in 2015 and $225 million in 2014. The contributions were used to repay revolving credit loans, redeem bonds, purchase additional generation capacity, and provide additional liquidity to TEP.
DIVIDENDS PAID TO PARENT
TEP declared and paid $50 million in dividends to UNS Energy in 2016 and 2015 and $40 million in 2014.