2.2.0.7 false Debt, Credit Facilities and Capital Lease Obligations 0204 - Disclosure - Debt, Credit Facilities and Capital Lease Obligations true false false false 1 false false 2 Debt, Credit Facilities and Capital Lease Obligations [Abstract] 0 uns_DebtCreditFacilitiesAndCapitalLeaseObligationsAbstract uns false na duration Debt, credit facilities and capital lease obligations. false false false false false true false false false false false false 1 false false false false 0 0 false false false xbrli:stringItemType string Debt, credit facilities and capital lease obligations. false 3 DEBT, CREDIT FACILITIES AND CAPITAL LEASE OBLIGATIONS 1 us-gaap_DebtDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; "> <div align="left" style="font-size: 10pt; margin-top: 10pt"><u><b>NOTE 4. DEBT, CREDIT FACILITIES AND CAPITAL LEASE OBLIGATIONS</b></u> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>UNISOURCE ENERGY CREDIT AGREEMENT</b> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">UniSource Energy had the following balances outstanding under the UniSource Energy Credit Agreement: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="28%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="7%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="7%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="7%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="7%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="7%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="7%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Current</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Long-</b></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Current</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Long-</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Liabilities</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Term Debt</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Liabilities</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Term Debt</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Total</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="22" style="border-bottom: 0px solid #000000">-Millions of Dollars-</td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>June 30, 2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000">December 31, 2009</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Revolver </div></td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>54</b></td> <td> </td> <td> </td> <td align="left"><b>$</b></td> <td align="right"><b>54</b></td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">31</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">31</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Term Loan </div></td> <td> </td> <td> </td> <td align="right"><b>6</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right"><b>6</b></td> <td> </td> <td> </td> <td> </td> <td align="right">6</td> <td> </td> <td> </td> <td> </td> <td align="right">3</td> <td> </td> <td> </td> <td> </td> <td align="right">9</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">On August 4, 2010, UniSource Energy had $52 million in borrowings outstanding under its revolving credit facility. </div>   </div>  <div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; "> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>TEP SUNDT UNIT 4 CAPITAL LEASE PURCHASE</b> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">In January 2010, TEP entered into a commitment to purchase 100% of the equity interest in Sundt Unit 4 from the owner participants for $52 million, resulting in an increase in capital lease assets and the capital lease obligation. In March 2010, TEP paid the owner participants $52 million reducing the capital lease obligation. In April 2010, TEP paid the final outstanding Sundt Unit 4 lease obligation of $5 million to terminate the lease and reclassified the capital lease asset and the related leasehold improvements to plant in service. TEP is depreciating the asset over its best estimate of remaining plant life at the time of purchase which is twenty five years. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>TEP DEBT</b> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">At June 30, 2010, TEP had $45 million in borrowings outstanding and $1 million in letters of credit issued under its revolving credit agreement. The letters of credit were issued to provide credit enhancements for energy purchase contracts and hedging activities. As of December 31, 2009, TEP had $35 million in borrowings outstanding and $1 million in letters of credit issued under its revolving credit facility. On August 4, 2010, TEP had $60 million in borrowings outstanding and $1 million in letters of credit issued under its revolving credit facility. The revolving loan balances are included in Current Liabilities in the UniSource Energy and TEP balance sheets. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>TEP Term Loan Borrowing</b> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">In March 2010, TEP entered into an 18-month, $30 million term loan facility. The loan is secured by $30 million of TEP mortgage bonds. TEP has the option of paying interest on the loan facility at LIBOR or Alternate Base Rate plus a margin based on a pricing grid tied to TEP’s credit ratings. The current margins are 2% for LIBOR loans and 1% for Alternate Base Rate loans. The loan proceeds were used for general corporate purposes, including the funding of a portion of the purchase price of Sundt Unit 4. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">The loan agreement contains a number of covenants which restrict TEP and its subsidiaries, including restrictions on additional indebtedness, liens, sale of assets, dividends and sale-leaseback agreements. The loan agreement also requires TEP to meet a minimum cash coverage ratio and a maximum leverage ratio. If TEP complies with the terms of the loan agreement, TEP may pay dividends to UniSource Energy. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>2008 Pima B Bonds Interest Conversion</b> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">In January 2010, TEP converted the interest on the $130 million of 2008 Pima B Bonds from a variable rate to a fixed rate. The Pima B Bonds were reoffered in January 2010, with a term rate of 5.75% through maturity on September 2029. Interest is payable semi-annually beginning June 1, 2010. The bonds are callable at par beginning January 2015. Accordingly, the associated letter of credit which supported the 2008 variable rate Pima B Bonds was terminated on January 12, 2010, and the TEP mortgage bonds which collateralized the letter of credit were canceled. TEP capitalized $1 million of costs related to the transaction. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>UNS GAS/UNS ELECTRIC REVOLVING CREDIT AGREEMENT</b> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">UNS Electric had $15 million and $11 million in outstanding letters of credit under the UNS Gas/UNS Electric Revolver as of June 30, 2010 and December 31, 2009, respectively, which are not shown on the balance sheet. As of August 4, 2010, UNS Electric had $19 million of outstanding letters of credit under the UNS Gas/UNS Electric Revolver. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>UED BORROWINGS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">In February 2010, UED amended its senior secured term loan facility to extend the termination date by two years to March 2012, and to increase borrowings by $9 million bringing the outstanding balance to $35 million. UED capitalized less than $1 million in costs related to the transaction. As of June 30, 2010, UED owed $33 million under the UED Credit Agreement. </div> <div align="left" style="font-size: 10pt; margin-top: 10pt"><b>OTHER</b> </div> <div align="left" style="font-size: 10pt; margin-top: 10pt">As of June 30, 2010, UniSource Energy and its subsidiaries were in compliance with the terms of their respective loan and credit agreements. </div>   </div>  <div style="font-family: Helvetica,Arial,sans-serif; margin-left: 0in; "> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="left"> </div> </div>  <!-- Begin Block Tagged Note false false false us-types:textBlockItemType textblock Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. 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