DEBT AND CREDIT AGREEMENT

6 Months Ended

Jun. 30, 2025

Debt Disclosure [Abstract]

DEBT AND CREDIT AGREEMENT

DEBT AND CREDIT AGREEMENT

There have been no significant changes to TEP's debt or credit agreements since December 31, 2024, except as noted below.

DEBT

Issuance

In February 2025, TEP issued and sold $300 million aggregate principal amount of 5.90% senior unsecured notes due April 2055. TEP may redeem the notes prior to October 15, 2054, with a make-whole premium plus accrued interest. On or after October 15, 2054, TEP may redeem the notes at par plus accrued interest.

CREDIT AGREEMENT

2021 Credit Agreement

The terms of the 2021 Credit Agreement are as follows:

			Sub-Limit Swingline (1)		Sub-Limit LOC						Weighted Average Interest Rate (3)
	Capacity						Borrowed (2)		Available				Pricing (4)
($ in millions)	June 30, 2025
Agreement	$	250	$	15	$	50	$	34	$	216	7.55	%	SOFR+ADJ 0.10%+1.050% or ABR+0.050%

(1)ABR pricing would apply to swingline loans.

(2)The borrowed amount includes LOCs totaling $19 million at a rate of 1.050% per annum issued in October and November 2024 to support interconnection requests, and in May 2025 to support TEP's participation in Markets+. The LOCs expire at various dates between October 2025 and November 2026.

(3)The weighted average interest rate is calculated on outstanding borrowings.

(4)TEP's pricing through October 15, 2026 may be adjusted based on performance measured using two sustainability targets: (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.

As of July 31, 2025, there was $181 million available under the 2021 Credit Agreement.