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COMMITMENTS. CONTINGENCIES, AND ENVIRONMENTAL MATTERS (Tables)
 12 Months Ended
Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]  
Unrecorded Unconditional Purchase Obligations Disclosure
At December 31, 2013, UNS Energy and TEP had the following firm, non-cancelable, minimum purchase obligations and operating leases. UNS Energy's commitments represent the obligations of TEP, UNS Electric, and UNS Gas:
 
UNS Energy Purchase Commitments
 
2014
 
2015
 
2016
 
2017
 
2018
 
Thereafter
 
Total
 
Millions of Dollars
Fuel, Including Transportation
$
103

 
$
83

 
$
80

 
$
75

 
$
49

 
$
345

 
$
735

Purchased Power
75

 
17

 
—

 
—

 
—

 
—

 
92

Transmission
7

 
13

 
12

 
12

 
11

 
27

 
82

Renewable Power Purchase Agreements
36

 
37

 
37

 
37

 
37

 
485

 
669

RES Performance-Based Incentives
9

 
9

 
9

 
9

 
9

 
85

 
130

Operating Leases
4

 
4

 
3

 
2

 
2

 
14

 
29

   Total Purchase Commitments
$
234

 
$
163

 
$
141

 
$
135

 
$
108

 
$
956

 
$
1,737

At December 31, 2013, TEP had the following firm, non-cancelable, minimum purchase obligations and operating leases:
 
TEP Purchase Commitments
 
2014
 
2015
 
2016
 
2017
 
2018
 
Thereafter
 
Total
 
Millions of Dollars
Fuel, Including Transportation
$
77

 
$
63

 
$
64

 
$
62

 
$
36

 
$
285

 
$
587

Purchased Power
27

 
5

 
—

 
—

 
—

 
—

 
32

Transmission
3

 
6

 
6

 
6

 
6

 
21

 
48

Renewable Power Purchase Agreements
30

 
31

 
31

 
31

 
31

 
410

 
564

RES Performance-Based Incentives
8

 
8

 
8

 
8

 
8

 
83

 
123

Operating Leases
3

 
3

 
2

 
2

 
2

 
14

 
26

   Total Purchase Commitments
$
148

 
$
116

 
$
111

 
$
109

 
$
83

 
$
813

 
$
1,380
Schedule of Environmental Loss Contingencies by Site
TEP's estimated potential costs involved in meeting these rules are:
Estimated Potential Emissions Control Costs:
Navajo (1)
 
San Juan (2)
 
Four Corners (3)
 
Sundt (4)
 
Millions of Dollars
 
 
Capital - SCR
$
42

 
$ 180-200

 
$
35

 
$
—

Capital - SNCR
—

 
35

 
—

 
12

Annual O&M - SCR
1

 
6

 
2

 
—

Annual O&M - SNCR
—

 
1

 
—

 
5-6

(1)
The EPA is considering a better-than-BART plan wherein: one unit at Navajo will be shut down by 2020; SCR installation (or the equivalent) will be installed on the remaining two units by 2030; and conventional coal-fired generation will cease by December 2044. TEP expects the EPA to reach a decision in 2014. In addition, the installation of SCR technology could increase particulates which may require that baghouses be installed. The additional capital cost of baghouses approximates $43 million with O&M on the baghouses expected to be less than $1 million per year.
(2)
The Federal Implementation Plan (FIP) requires SCR; as part of a proposal for an alternative, PNM, the State of New Mexico, and the EPA signed a non-binding agreement in which PNM agreed to close Units 2 & 3 by December 31, 2017 and install SNCRs on Units 1 & 4 by January 2016 or later. The State of New Mexico has submitted this plan to the EPA for approval. TEP expects the EPA will reach a decision in 2014. TEP owns 50% of San Juan Unit 2. At December 31, 2013, the net book value of TEP's share in San Juan Unit 2 was $113 million. If Unit 2 is retired early, we expect to request ACC approval to recover, over a reasonable time period, all costs associated with the early closure of the unit.
(3)
On December 30, 2013, APS, on behalf of the co-owners of Four Corners, notified the EPA that they have chosen the alternative BART compliance strategy; APS closed Units 1, 2, and 3 in December 2013 and has agreed to the installation of SCR on Units 4 & 5 by July 31, 2018. TEP owns 7% of Four Corners Units 4 and 5.
(4) In January 2014, the EPA issued a proposal that would require TEP to either (i) install SNCR by mid-2017 or (ii) eliminate the use of coal by the end of 2017 as a better-than-BART alternative. Under the proposal, TEP would be required to notify the EPA of its decision by July 31, 2015. The EPA is expected to issue a final BART determination by July 2014. At December 31, 2013, the net book value of the Sundt coal handling facilities was $27 million. If the coal handling facilities are retired early, we expect to request ACC approval to recover, over a reasonable time period, all the remaining costs of the coal handling facilities.
In February 2012, the EPA issued final rules for the control of mercury emissions and other hazardous air pollutants from power plants. Based on the EPA's final Mercury and Air Toxics (MATs) rule, additional emission control equipment will be required by 2015. The estimated costs include:
Estimated Emissions Control Costs:
Navajo
 
Four Corners
 
Springerville
 
Millions of Dollars
Capital Expenditures - Mercury Emissions Control
$
1

 
$
1

 
$
5

Annual O&M Expenses
1

 
1

 
3