EMPLOYEE BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2017

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

Schedule of Amounts Recognized in Balance Sheet

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

	Pension Benefits						Other Postretirement Benefits
	December 31,
(in millions)	2017			2016			2017			2016
Regulatory Assets	$	121		$	123		$	5		$	5
Accrued Employee Expenses	(1		)	(1		)	(2		)	(2		)
Pension and Other Postretirement Benefits	(71		)	(69		)	(63		)	(63		)
Accumulated Other Comprehensive Loss, SERP	9			6			—			—
Net Amount Recognized	$	58		$	59		$	(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)	2017			2016			2017			2016
Change in Benefit Obligation
Beginning of Period	$	424		$	394		$	79		$	78
Actuarial Loss	42			20			1			—
Interest Cost	15			15			2			2
Service Cost	13			12			4			4
Benefits Paid	(19		)	(17		)	(4		)	(5		)
End of Period	475			424			82			79
Change in Fair Value of Plan Assets
Beginning of Period	354			336			14			13
Actual Return on Plan Assets	59			27			2			1
Benefits Paid	(19		)	(17		)	(4		)	(5		)
Employer Contributions (1)	9			8			5			5
End of Period	403			354			17			14
Funded Status at End of Period	$	(72	)	$	(70	)	$	(65	)	$	(65	)

⁽¹⁾  TEP expects to contribute $11 million to the pension plans in 2018.

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)	2017		2016		2017			2016
Net Loss	$	129	$	128	$	5		$	6
Prior Service Cost (Benefit)	1		—		(1		)	(1		)

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

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

	December 31,
(in millions)	2017		2016
Accumulated Benefit Obligation	$	237	$	384
Fair Value of Plan Assets	206		354

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)	2017			2016			2015			2017			2016			2015
Service Cost	$	13		$	12		$	12		$	4		$	4		$	4
Interest Cost	15			15			17			2			2			3
Expected Return on Plan Assets	(25		)	(23		)	(23		)	(1		)	(1		)	(1		)
Amortization of Net Loss	8			7			7			—			—			—
Net Periodic Benefit Cost	$	11		$	11		$	13		$	5		$	5		$	6

Approximately 18% 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 were as follows:

	Pension Benefits															Other Postretirement Benefits
	Regulatory Asset									AOCI						Regulatory Asset
(in millions)	2017			2016			2015			2017		2016		2015		2017			2016		2015
Current Year Actuarial (Gain) Loss	$	5		$	15		$	5		$	3	$	1	$	—	$	(1	)	$	—	$	(4	)
Amortization of Net Loss	(7		)	(7		)	(7		)	—		—		—		—			—		—
Total Recognized (Gain) Loss	$	(2	)	$	8		$	(2	)	$	3	$	1	$	—	$	(1	)	$	—	$	(4	)

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 plans. Estimated amortization from regulatory assets into net periodic benefit cost in 2018 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
	2017	2016	2017	2016
Discount Rate	3.7%	4.2%	3.6%	4.0%
Rate of Compensation Increase	2.8%	2.8%	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
	2017	2016	2015	2017	2016	2015
Discount Rate, Service Cost	4.4%	4.8%	4.2%	4.3%	4.6%	3.9%
Discount Rate, Interest Cost	3.7%	3.9%	4.2%	3.3%	3.4%	3.9%
Rate of Compensation Increase	2.8%	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

Healthcare cost trend rates are assumed to decrease gradually from next year to the year the ultimate rate is reached:

	December 31,
	2017	2016
Next Year	7.6%	7.6%
Ultimate Rate Assumed	4.5%	4.5%
Year Ultimate Rate is Reached	2036	2037

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

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

	One-Percentage- Point Increase		One-Percentage- Point Decrease
(in millions)	December 31, 2017
Increase (Decrease) on Total Service and Interest Cost Components	$	1	$	(1	)
Increase (Decrease) on Other Postretirement Benefits Obligation	7		(6		)

Schedule of Allocation of Plan Assets

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

	Pension				Other Postretirement Benefits
	2017		2016		2017		2016
Asset Category
Equity Securities	46	%	49	%	63	%	60	%
Fixed Income Securities	45	%	41	%	35	%	35	%
Real Estate	7	%	8	%	—	%	2	%
Other	2	%	2	%	2	%	3	%
Total	100	%	100	%	100	%	100	%

FV Measurements of Pension Plan Assets by FV Hierarchy

The following tables present 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, 2017
Asset Category
Cash Equivalents	$	1	$	—	$	—	$	1
Equity Securities:
United States Large Cap	—		66		—		66
United States Small Cap	—		19		—		19
Non-United States	—		72		—		72
Global	—		30		—		30
Fixed Income	—		179		—		179
Real Estate	—		9		21		30
Private Equity	—		—		6		6
Total	$	1	$	375	$	27	$	403
(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

• 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 values are generally determined by appraisals conducted in accordance with accepted appraisal guidelines, including consideration of projected income and expenses of the property as well as recent sales of similar properties.

• 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 presents a reconciliation of changes in the fair value of pension plan 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, 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
Actual Return on Plan Assets:
Assets Held at Reporting Date	1			2		3
Purchases, Sales, and Settlements	(2		)	—		(2		)
Balance as of December 31, 2017	$	6		$	21	$	27

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 Benefits
	December 31, 2017
Cash/Treasury Bills	—%	2%
Equity Securities:
United States Large Cap	16%	39%
United States Small Cap	5%	5%
Non-United States Developed	14%	7%
Non-United States Emerging	4%	9%
Global Equity	4%	—%
Global Infrastructure	3%	—%
Fixed Income	45%	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 plans, which reflect future service, as appropriate.

(in millions)	2018		2019		2020		2021		2022		2023-2027
Pension Benefits	$	21	$	22	$	23	$	24	$	25	$	137
Other Postretirement Benefits	5		5		5		6		6		30