EMPLOYEE BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2018

Retirement Benefits [Abstract]

Schedule of pension and other postretirement benefit amounts

The following table presents pension and other postretirement benefit amounts (excluding tax balances) included on the balance sheet:

	Pension Benefits						Other Postretirement Benefits
	December 31,
(in millions)	2018			2017			2018			2017
Regulatory Assets	$	126		$	121		$	—		$	5
Regulatory Liabilities	—			—			(3		)	—
Accrued Employee Expenses	(1		)	(1		)	(3		)	(2		)
Pension and Other Postretirement Benefits	(63		)	(71		)	(54		)	(63		)
Accumulated Other Comprehensive Loss, SERP	6			9			—			—
Net Amount Recognized	$	68		$	58		$	(60	)	$	(60	)

Schedule of changes in funded status

All plans had 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)	2018			2017			2018			2017
Change in Benefit Obligation
Beginning of Period	$	475		$	424		$	82		$	79
Actuarial (Gain) Loss	(42		)	42			(8		)	1
Interest Cost	16			15			2			2
Service Cost	15			13			5			4
Benefits Paid	(23		)	(19		)	(5		)	(4		)
Plan Amendments	(1		)	—			(2		)	—
End of Period	440			475			74			82
Change in Fair Value of Plan Assets
Beginning of Period	403			354			17			14
Actual Return on Plan Assets	(25		)	59			(1		)	2
Benefits Paid	(23		)	(19		)	(5		)	(4		)
Employer Contributions (1)	21			9			6			5
End of Period	376			403			17			17
Funded Status at End of Period	$	(64	)	$	(72	)	$	(57	)	$	(65	)

⁽¹⁾  TEP expects to contribute $11 million to the pension plans in 2019.

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)	2018		2017		2018			2017
Net (Gain) Loss	$	133	$	129	$	(1	)	$	5
Prior Service Cost (Benefit)	—		1		(2		)	(1		)

Schedule of information for the pension plans with accumulated benefit obligations in excess of pension plan

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

	December 31,
(in millions)	2018		2017
Accumulated Benefit Obligation	$	230	$	237
Fair Value of Plan Assets	202		206

Components of net periodic benefit plan cost

Net periodic benefit plan cost includes the following components:

	Pension Benefits									Other Postretirement Benefits
	Years Ended December 31,
(in millions)	2018			2017			2016			2018			2017			2016
Service Cost	$	15		$	13		$	12		$	5		$	4		$	4
Interest Cost	16			15			15			2			2			2
Expected Return on Plan Assets	(28		)	(25		)	(23		)	(1		)	(1		)	(1		)
Amortization of Net Loss	7			8			7			—			—			—
Net Periodic Benefit Cost	$	10		$	11		$	11		$	6		$	5		$	5

Schedule of the changes in plan assets and benefit obligations recognized as regulatory assets or in AOCI

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)	2018			2017			2016			2018			2017		2016		2018			2017			2016
Current Year Actuarial (Gain) Loss	$	12		$	5		$	15		$	(1	)	$	3	$	1	$	(6	)	$	(1	)	$	—
Amortization of Net Loss	(7		)	(7		)	(7		)	—			—		—		—			—			—
Prior Service Credit	—			—			—			(1		)	—		—		(2		)	—			—
Total Recognized (Gain) Loss	$	5		$	(2	)	$	8		$	(2	)	$	3	$	1	$	(8	)	$	(1	)	$	—

Schedule of estimated amortization from regulatory assets into net periodic benefit cost

Estimated amortization from regulatory assets into net periodic benefit cost in 2019 includes the following:

(in millions)	Pension Benefits		Other Postretirement Benefits
Net Loss	$	8	$	—

Schedule of weighted average assumptions used to determine benefit obligations

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

	Pension Benefits		Other Postretirement Benefits
	2018	2017	2018	2017
Discount Rate	4.5%	3.7%	4.3%	3.6%
Rate of Compensation Increase	2.8%	2.8%	N/A	N/A

Schedule of weighted average assumptions used to determine net periodic benefit costs

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

	Pension Benefits			Other Postretirement Benefits
	2018	2017	2016	2018	2017	2016
Discount Rate, Service Cost	3.8%	4.4%	4.8%	3.8%	4.3%	4.6%
Discount Rate, Interest Cost	3.4%	3.7%	3.9%	3.2%	3.3%	3.4%
Rate of Compensation Increase	2.8%	2.8%	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 healthcare 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,
	2018	2017
Next Year (Pre-65)	6.5%	6.5%
Next Year (Post-65)	7.8%	7.6%
Ultimate Rate Assumed (Pre-65 and Post-65)	4.5%	4.5%
Year Ultimate Rate is Reached (Pre-65)	2037	2037
Year Ultimate Rate is Reached (Post-65)	2037	2036

Schedule of one-percentage-point change in assumed healthcare cost trend rates

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, 2018
Total Service and Interest Cost Components Increase (Decrease)	$	1	$	(1	)
Other Postretirement Benefits Obligation Increase (Decrease)	7		(6		)

Schedule of asset allocations, by asset category, on the measurement date

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

	Pension				Other Postretirement Benefits
	2018		2017		2018		2017
Asset Category
Equity Securities	45	%	46	%	60	%	63	%
Fixed Income Securities	45	%	45	%	38	%	35	%
Real Estate	8	%	7	%	—	%	—	%
Other	2	%	2	%	2	%	2	%
Total	100	%	100	%	100	%	100	%

Schedule of fair value measurements of pension plan assets by level

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, 2018
Asset Category
Cash Equivalents	$	1	$	—	$	—	$	1
Equity Securities:
United States Large Cap	—		45		—		45
United States Small Cap	—		17		—		17
Non-United States	—		67		—		67
Global	—		42		—		42
Fixed Income	—		167		—		167
Real Estate	—		9		22		31
Private Equity	—		—		6		6
Total	$	1	$	347	$	28	$	376
(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

• 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 the fair value of pension plan assets classified as Level 3 in the fair value hierarchy

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, 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
Actual Return on Plan Assets:
Assets Held at Reporting Date	2			1		3
Purchases, Sales, and Settlements	(2		)	—		(2		)
Balance as of December 31, 2018	$	6		$	22	$	28

Schedule of target allocation percentages for the major asset categories of the plan

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, 2018
Cash/Treasury Bills	—%	2%
Equity Securities:
United States Large Cap	12%	39%
United States Small Cap	5%	5%
Non-United States Developed	—%	7%
Non-United States Emerging	—%	9%
Global Equity	26%	—%
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)	2019		2020		2021		2022		2023		2024-2028
Pension Benefits	$	22	$	23	$	24	$	25	$	26	$	139
Other Postretirement Benefits	5		5		5		6		6		28