EMPLOYEE BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2016

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

Schedule of Amounts Recognized in Balance Sheet

The following table summarizes pension and other postretirement benefit amounts (excluding tax balances) included in the Consolidated Balance Sheets:

	Pension Benefits						Other Postretirement Benefits
	December 31,
(in millions)	2016			2015			2016			2015
Regulatory Assets	$	123		$	115		$	5		$	5
Accrued Employee Expenses	(1		)	(1		)	(2		)	(2		)
Pension and Other Postretirement Benefits	(69		)	(57		)	(63		)	(63		)
Accumulated Other Comprehensive Loss, SERP	6			5			—			—
Net Amount Recognized	$	59		$	62		$	(60	)	$	(60	)

Schedule of Changes in Funded Status

All plans have projected benefit obligations in excess of the fair value of plan assets for each period presented:

	Pension Benefits						Other Postretirement Benefits
	Years Ended December 31,
(in millions)	2016			2015			2016			2015
Change in Projected Benefit Obligation
Beginning of Period	$	394		$	407		$	78		$	81
Actuarial (Gain) Loss	20			(22		)	—			(5		)
Interest Cost	15			17			2			3
Service Cost	12			12			4			4
Benefits Paid	(17		)	(20		)	(5		)	(5		)
End of Period	424			394			79			78
Change in Fair Value of Plan Assets
Beginning of Period	336			335			13			12
Actual Return on Plan Assets	27			(3		)	1			—
Benefits Paid	(17		)	(20		)	(5		)	(5		)
Employer Contributions (1)	8			24			5			6
End of Period	354			336			14			13
Funded Status at End of Period	$	(70	)	$	(58	)	$	(65	)	$	(65	)

⁽¹⁾  TEP expects to contribute $11 million to the pension plans in 2017.

Schedule of Net Periodic Benefit Cost Not yet Recognized

The following table provides the components of TEP’s regulatory assets and accumulated other comprehensive loss that have not been recognized as components of net periodic benefit cost as of the dates presented:

	Pension Benefits				Other Postretirement Benefits
	Years Ended December 31,
(in millions)	2016		2015		2016			2015
Net Loss	$	128	$	117	$	6		$	6
Prior Service Cost (Benefit)	—		3		(1		)	(1		)

Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets

The following table includes information for pension plans with accumulated benefit obligations in excess of pension plan assets:

	December 31,
(in millions)	2016		2015
Accumulated Benefit Obligation	$	384	$	188
Fair Value of Plan Assets	354		169

Components of Net Periodic Benefit Cost

Net periodic benefit plan cost includes the following components:

	Pension Benefits									Other Postretirement Benefits
	Years Ended December 31,
(in millions)	2016			2015			2014			2016			2015			2014
Service Cost	$	12		$	12		$	10		$	4		$	4		$	4
Interest Cost	15			17			16			2			3			3
Expected Return on Plan Assets	(23		)	(23		)	(21		)	(1		)	(1		)	(1		)
Amortization of Net Loss	7			7			3			—			—			—
Net Periodic Benefit Cost	$	11		$	13		$	8		$	5		$	6		$	6

Approximately 19% of the net periodic benefit cost was capitalized as a cost of construction and the remainder was included in income.

Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss)

The changes in plan assets and benefit obligations recognized as regulatory assets or in AOCI are as follows:

	Pension Benefits															Other Postretirement Benefits
	Regulatory Asset									AOCI						Regulatory Asset
(in millions)	2016			2015			2014			2016		2015		2014		2016		2015			2014
Current Year Actuarial (Gain) Loss	$	15		$	5		$	49		$	1	$	—	$	3	$	—	$	(4	)	$	5
Amortization of Net Loss	(7		)	(7		)	(3		)	—		—		—		—		—			—
Total Recognized (Gain) Loss	$	8		$	(2	)	$	46		$	1	$	—	$	3	$	—	$	(4	)	$	5

Schedule of Expected Amortization of Prior Service Costs Charged to Net Period Benefit Cost

For all pension plans, TEP amortizes prior service costs on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan. Estimated amortization from regulatory assets into net periodic benefit cost in 2017 includes the following:

(in millions)	Pension Benefits		Other Postretirement Benefits
Net Loss	$	7	$	—

Schedule Of Weighted Average Assumptions Used To Determine Benefit Obligations At Year End Table

The following table includes the weighted average assumptions used to determine benefit obligations:

	Pension Benefits		Other Postretirement Benefits
	2016	2015	2016	2015
Discount Rate	4.2%	4.5%	4.0%	4.2%
Rate of Compensation Increase	2.8%	3.0%	N/A	N/A

Schedule Of Weighted Average Assumptions Used To Determine Net Periodic Benefit Cost Table

The following table includes the weighted average assumptions used to determine net periodic benefit costs:

	Pension Benefits			Other Postretirement Benefits
	2016	2015	2014	2016	2015	2014
Discount Rate, Service Cost	4.8%	4.2%	5.1%	4.6%	3.9%	4.7%
Discount Rate, Interest Cost	3.9%	4.2%	5.1%	3.4%	3.9%	4.7%
Rate of Compensation Increase	3.0%	3.0%	3.0%	N/A	N/A	N/A
Expected Return on Plan Assets	7.0%	7.0%	7.0%	7.0%	7.0%	7.0%

Schedule of Health Care Cost Trend Rates

The following table includes the assumed health care cost trend rates:

	December 31,
	2016	2015
Next Year	7.6%	7.6%
Ultimate Rate Assumed	4.5%	4.5%
Year Ultimate Rate is Reached	2037	2036

Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates

Assumed health care cost trend rates significantly affect the amounts reported for health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects on the amounts:

	One-Percentage- Point Increase		One-Percentage- Point Decrease
(in millions)	December 31, 2016
Increase (Decrease) on Total Service and Interest Cost Components	$	1	$	(1	)
Increase (Decrease) on Other Postretirement Benefit Obligation	7		(6		)

Schedule of Allocation of Plan Assets

Asset allocations, by asset category, on the measurement date were as follows:

	Pension				Other Postretirement
	2016		2015		2016		2015
Asset Category
Equity Securities	49	%	49	%	60	%	60	%
Fixed Income Securities	41	%	41	%	35	%	35	%
Real Estate	8	%	8	%	2	%	2	%
Other	2	%	2	%	3	%	3	%
Total	100	%	100	%	100	%	100	%

FV Measurements of Pension Plan Assets by FV Hierarchy

The following table sets forth the fair value measurements of pension plan assets by level within the fair value hierarchy:

	Level 1		Level 2		Level 3		Total
(in millions)	December 31, 2016
Asset Category
Cash Equivalents	$	1	$	—	$	—	$	1
Equity Securities:
United States Large Cap	—		61		—		61
United States Small Cap	—		18		—		18
Non-United States	—		67		—		67
Global	—		28		—		28
Fixed Income	—		144		—		144
Real Estate	—		9		19		28
Private Equity	—		—		7		7
Total	$	1	$	327	$	26	$	354
(in millions)	December 31, 2015
Asset Category
Cash Equivalents	$	1	$	—	$	—	$	1
Equity Securities:
United States Large Cap	—		81		—		81
United States Small Cap	—		17		—		17
Non-United States	—		67		—		67
Fixed Income	—		137		—		137
Real Estate	—		8		18		26
Private Equity	—		—		7		7
Total	$	1	$	310	$	25	$	336

• Level 1 cash equivalents are based on observable market prices and are comprised of the fair value of commercial paper, money market funds, and certificates of deposit.

• Level 2 investments comprise amounts held in commingled equity funds, United States bond funds, and real estate funds. Valuations are based on active market quoted prices for assets held by each respective fund.

• Level 3 real estate investments were valued using a real estate index value. The real estate index value was developed based on appraisals comprising 100% of real estate assets tracked by the index.

• Level 3 private equity funds are classified as funds-of-funds. They are valued based on individual fund manager valuation models.

Schedule of Reconciliation of Changes in Fair Value of Level 3 Plan Assets

The following table sets forth a reconciliation of changes in the fair value of pension assets classified as Level 3 in the fair value hierarchy. There were no transfers in or out of Level 3.

(in millions)	Private Equity			Real Estate		Total
Balance as of December 31, 2014	$	7		$	16	$	23
Actual Return on Plan Assets:
Assets Held at Reporting Date	1			2		3
Purchases, Sales, and Settlements	(1		)	—		(1		)
Balance as of December 31, 2015	7			18		25
Actual Return on Plan Assets:
Assets Held at Reporting Date	1			1		2
Purchases, Sales, and Settlements	(1		)	—		(1		)
Balance as of December 31, 2016	$	7		$	19	$	26

Target Allocation Percentages for Plan Assets

The current target allocation percentages for the major asset categories of the plan follow. Each plan allows a variance of +/- 2% from targets before funds are automatically rebalanced.

	Pension	Other Postretirement
	December 31, 2016
Cash/Treasury Bills	—%	2%
Equity Securities:
United States Large Cap	17%	39%
United States Small Cap	5%	5%
Non-United States Developed	15%	7%
Non-United States Emerging	4%	9%
Global Equity	5%	—%
Global Infrastructure	3%	—%
Fixed Income	42%	38%
Real Estate	8%	—%
Private Equity	1%	—%
Total	100%	100%

Schedule of Expected Benefit Payments

TEP expects the following benefit payments to be made by the defined benefit pension plans and other postretirement benefit plan, which reflect future service, as appropriate.

(in millions)	2017		2018		2019		2020		2021		2022-2026
Pension Benefits	$	18	$	19	$	20	$	22	$	23	$	128
Other Postretirement Benefits	4		5		5		6		6		32