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FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (Tables)
 6 Months Ended
Jun. 30, 2023
Fair Value Disclosures [Abstract]  
Financial Instruments Measured at Fair Value on Recurring Basis
The following tables present, by level within the fair value hierarchy, TEP’s assets and liabilities accounted for at fair value through net income on a recurring basis classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
Level 1Level 2Total
(in millions)June 30, 2023
Assets
Cash Equivalents (1)
$15 $— $15 
Restricted Cash (1)
26 — 26 
Energy Derivative Contracts, Regulatory Recovery (2)
— 48 48 
Energy Derivative Contracts, No Regulatory Recovery (2)
— 17 17 
Total Assets41 65 106 
Liabilities
Energy Derivative Contracts, Regulatory Recovery (2)
— (14)(14)
Total Liabilities— (14)(14)
Total Assets (Liabilities), Net$41 $51 $92 
(in millions)December 31, 2022
Assets
Restricted Cash (1)
$35 $— $35 
Energy Derivative Contracts, Regulatory Recovery (2)
— 100 100 
Energy Derivative Contracts, No Regulatory Recovery (2)
— 4 4 
Total Assets35 104 139 
Liabilities
Energy Derivative Contracts, Regulatory Recovery (2)
— (18)(18)
Total Liabilities— (18)(18)
Total Assets (Liabilities), Net$35 $86 $121 
(1)Cash Equivalents and Restricted Cash represent amounts held in money market funds, which approximate fair market value. Cash Equivalents are included in Cash and Cash Equivalents on the Condensed Consolidated Balance Sheets. Restricted Cash is included in Investments and Other Property and in Current Assets—Other on the Condensed Consolidated Balance Sheets.
(2)Energy Derivative Contracts include gas swap agreements and forward power purchase and sale contracts entered into to reduce exposure to energy price risk. These contracts are included in Derivative Instruments on the Condensed Consolidated Balance Sheets.
Potential Offset of Assets by Counterparty Netting and Cash Collateral The tables below present the potential offset of counterparty netting and cash collateral:
Gross Amount Recognized in the Balance SheetsGross Amount Not Offset in the Balance SheetsNet Amount
Counterparty Netting of Energy ContractsCash Collateral Received/Posted
(in millions)June 30, 2023
Derivative Assets
Energy Derivative Contracts$65 $13 $— $52 
Derivative Liabilities
Energy Derivative Contracts(14)(13)— (1)
(in millions)December 31, 2022
Derivative Assets
Energy Derivative Contracts$104 $14 $14 $76 
Derivative Liabilities
Energy Derivative Contracts(18)(14)— (4)
Potential Offset of Liabilities by Counterparty Netting and Cash Collateral The tables below present the potential offset of counterparty netting and cash collateral:
Gross Amount Recognized in the Balance SheetsGross Amount Not Offset in the Balance SheetsNet Amount
Counterparty Netting of Energy ContractsCash Collateral Received/Posted
(in millions)June 30, 2023
Derivative Assets
Energy Derivative Contracts$65 $13 $— $52 
Derivative Liabilities
Energy Derivative Contracts(14)(13)— (1)
(in millions)December 31, 2022
Derivative Assets
Energy Derivative Contracts$104 $14 $14 $76 
Derivative Liabilities
Energy Derivative Contracts(18)(14)— (4)
Financial Impact of Energy Contracts The table below presents the unrealized gains and losses recorded to a regulatory asset or a regulatory liability on the balance sheet:
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2023202220232022
Unrealized Net Gain (Loss) (1)
$(5)$18 $(47)$107 
(1)For the three and six months ended June 30, 2023, unrealized net loss on regulatory recoverable derivative contracts was primarily due to decreases in forward market prices of natural gas. For the three and six months ended June 30, 2022, unrealized net gain on regulatory recoverable derivative contracts was primarily due to increases in forward market prices of natural gas.The table below presents amounts recorded in Operating Revenues on the Condensed Consolidated Statements of Income:
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2023202220232022
Operating Revenues$4 $2 $17 $10 
Derivative Volumes The following table presents volumes associated with the energy contracts:
June 30, 2023December 31, 2022
Power Contracts GWh4,084 1,979 
Gas Contracts BBtu98,991 96,755 
Face Value and Estimated Fair Value of Long-Term Debt The following table includes the net carrying value and estimated fair value of TEP's long-term debt:
Fair Value HierarchyNet Carrying ValueFair Value
(in millions)June 30, 2023December 31, 2022June 30, 2023December 31, 2022
Liabilities
Long-Term Debt, including Current MaturitiesLevel 2$2,396 $2,265 $2,068 $1,901