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DEBT AND CREDIT AGREEMENTS
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
DEBT AND CREDIT AGREEMENTS DEBT AND CREDIT AGREEMENTS
DEBT
Long-term debt matures more than one year from the date of debt issuance. The following table presents the components of long-term debt, which includes Long-Term Debt, Net and Current Maturities of Long-Term Debt, Net on the Consolidated Balance Sheets:
December 31,
($ in millions)Interest RateMaturity Date20212020
Notes
2011 Senior Notes5.15%2021$— $250 
2012 Senior Notes (1)
3.85%2023150 150 
2014 Senior Notes5.00%2044150 150 
2015 Senior Notes3.05%2025300 300 
2018 Senior Notes4.85%2048300 300 
2020 Senior Notes4.00%2050350 350 
2020 Senior Notes1.50%2030300 300 
2021 Senior Notes3.25%2051325 — 
Tax-Exempt Local Furnishings Bonds (2)
2012 Pima A4.50%203016 16 
2013 Pima A4.00%202991 91 
Tax-Exempt Pollution Control Bonds
2012 Apache A (3)
4.50%2030177 177 
Total Long-Term Debt (4)
2,159 2,084 
Less Unamortized Discount and Debt Issuance Costs24 20 
Less Current Maturities of Long-Term Debt— 250 
Total Long-Term Debt, Net$2,135 $1,814 
(1)The 2012 Senior Notes are callable prior to December 15, 2022, with a make-whole premium plus accrued interest. After December 15, 2022, the notes are callable at par plus accrued interest.
(2)The 2012 Pima A bonds become callable at par on or after June 1, 2022. The 2013 Pima A bonds become callable at par on or after March 1, 2023.
(3)The 2012 Apache A bonds become callable at par on or after March 1, 2022.
(4)As of December 31, 2021, all of TEP's debt is unsecured.
Debt Issuances and Redemptions
In August 2021, TEP redeemed at par $250 million aggregate principal amount of 5.15% senior unsecured notes, prior to maturity.
In May 2021, TEP issued and sold $325 million aggregate principal amount of 3.25% senior unsecured notes due May 2051. TEP may redeem the notes prior to November 1, 2050, with a make-whole premium plus accrued interest. On or after November 1, 2050, TEP may redeem the debt at par plus accrued interest. TEP used the net proceeds to redeem debt in August 2021 and for general corporate purposes.
In September 2020, TEP extinguished its obligations on two series of fixed rate tax-exempt bonds with aggregate principal amounts of: (i) $80 million, which matured on October 1, 2020; and (ii) $100 million redeemed at par on October 1, 2020, the first par call date.
In August 2020, TEP issued and sold $300 million aggregate principal amount of 1.50% senior unsecured notes due August 2030. The debt is callable prior to May 1, 2030, with a make-whole premium plus accrued interest. After May 1, 2030, the debt becomes callable at par plus accrued interest. An amount equal to the net proceeds was allocated to the total costs of Oso Grande.
In April 2020, TEP issued and sold $350 million aggregate principal amount of 4.00% senior unsecured notes due June 2050. The debt is callable prior to December 15, 2049, with a make-whole premium plus accrued interest. After December 15, 2049, the debt becomes callable at par plus accrued interest. TEP used the net proceeds from the sale: (i) to repay amounts outstanding under its credit agreement; (ii) to repay and terminate $225 million in term loans; and (iii) for general corporate purposes.
Maturities
Long-term debt matures on the following dates:
(in millions)
Long-Term Debt (1)
2022$— 
2023150 
2024— 
2025300 
2026— 
Thereafter1,709 
Total$2,159 
(1)Total long-term debt excludes $16 million of related unamortized debt issuance costs and $8 million of unamortized original issue discount.
CREDIT AGREEMENT
In October 2021, TEP entered into an unsecured credit agreement that provides for revolving credit commitments with swingline and LOC sublimits, due in October 2026, the termination date (2021 Credit Agreement). The final maturity date is subject to two one-year extensions if certain conditions are satisfied. The 2021 Credit Agreement amended and restated in its entirety the 2015 Credit Agreement.
Amounts borrowed under the 2021 Credit Agreement are used for working capital and other general corporate purposes and are recorded in Borrowings Under Credit Agreement on the Consolidated Balance Sheets. Interest rates and fees are based on a pricing grid tied to TEP's credit rating. LOCs are issued from time to time to support energy procurement, hedging transactions, and other business activities. The credit agreement provides for transitions to alternative benchmark rates. Terms are as follows:
Sub-Limit Swingline(1)
Sub-Limit LOCWeighted Average Interest Rate
Capacity
Borrowed(2)
Available
Pricing(3)
($ in millions)December 31, 2021
2021 Agreement$250 $15 $50 $25 $225 2.53 %LIBOR + 1.000%
or ABR + 0.00%
(1)ABR pricing would apply to swingline loans.
(2)Includes a $10 million LOC at a rate of 1.00% per annum issued in October 2021 to replace LOCs originally issued in January 2020 pursuant to TEP taking ownership of Oso Grande under the BTA.
(3)TEP's pricing may be adjusted based on performance measured using two key performance indicators: (i) the three-year average Occupational Safety and Health Administration total recordable incident rate, excluding solely COVID-19 pandemic-related incidents; and (ii) capacity targets for owned plus firm purchased power agreement renewable generation, including energy storage.
Sub-Limit LOCWeighted Average Interest Rate
Capacity
Borrowed(1)
AvailablePricing
($ in millions)December 31, 2020
2015 Agreement$250 $50 $12 $238 — %LIBOR + 1.000%
or ABR + 0.00%
(1)Included $12 million in LOCs at a rate of 1.00% per annum issued in January 2020 pursuant to TEP taking ownership of Oso Grande under the BTA.
As of February 10, 2022, there was $220 million available under the 2021 Credit Agreement.