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RELATED PARTY TRANSACTIONS
 6 Months Ended
Jun. 30, 2025
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
TEP engages in various transactions with Fortis, UNS Energy, and UNS Energy Affiliates. These transactions include: (i) the sale and purchase of power and transmission services; (ii) common cost allocations; and (iii) the provision of corporate and other labor-related services.
The following table presents the components of related party balances included in Accounts Receivable, Net and Accounts Payable on the Condensed Consolidated Balance Sheets:
(in millions)June 30, 2025December 31, 2024
Receivables from Related Parties
UNS Electric$7 $7 
UNS Gas2 2 
UNS Energy— 1 
Total Due from Related Parties$9 $10 
Payables to Related Parties
UNS Energy$2 $1 
UNS Electric1 1 
Total Due to Related Parties$3 $2 
The following table presents the components of related party transactions included on the Condensed Consolidated Statements of Income:
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2025202420252024
Goods and Services Provided by TEP to Affiliates
Common Costs, UNS Energy Affiliates (1)
$6 $6 $12 $12 
Transmission Revenues, UNS Electric (2)
2 2 4 4 
Wholesale Revenues, UNS Electric (2)
— 1 1 3 
Control Area Services, UNS Electric (3)
1 1 1 1 
Goods and Services Provided by Affiliates to TEP
Corporate Services, UNS Energy (4)
$3 $2 $6 $5 
Purchased Power, UNS Electric (2)
— — 1 — 
Capacity Charges, UNS Gas (5)
— — 1 1 
Corporate Services, UNS Energy Affiliates (6)
1 1 1 1 
(1)Common costs (information systems, facilities, etc.) are allocated on a cost-causative basis and recorded as revenue by TEP. The method of allocation is deemed reasonable by management and is reviewed by the ACC as part of the rate case process.
(2)TEP and UNS Electric sell power to each other, and TEP sells transmission services to UNS Electric. Wholesale power is sold at prevailing market prices, while transmission services are sold at FERC-approved rates through the applicable Open Access Transmission Tariff.
(3)TEP charges UNS Electric for control area services under a FERC-filed Control Area Services Agreement.
(4)Corporate Services, UNS Energy includes legal and audit, and Fortis' management fees. Costs for corporate services provided by UNS Energy are allocated to its subsidiaries using the Massachusetts Formula, an industry accepted method of allocating common costs to affiliated entities. TEP's allocation is approximately 84% of UNS Energy's allocated costs. TEP's share of Fortis' management fees was $2 million and $5 million for the three and six months ended June 30, 2025, respectively, and $2 million and $4 million for the three and six months ended June 30, 2024, respectively.
(5)UNS Gas charges TEP for natural gas capacity used to supply Gila River Generating Station.
(6)Costs for corporate services (e.g., finance, accounting, tax, legal, and information technology) and other labor services for UNS Energy Affiliates are directly assigned to the benefiting entity at a fully burdened cost when possible.