UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                          Washington, D. C.  20549
                                      
                                  FORM 8-K
                                      
                               CURRENT REPORT
                                      

   Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

     Date of Report (Date of Earliest Event Reported):  January 4, 1999



Commission        Registrant; State of Incorporation;     IRS Employer
File Number       Address; and Telephone Number           Identification Number
- -----------       -----------------------------           ---------------------
1-13739           UNISOURCE ENERGY CORPORATION            86-0786732
                  (An Arizona Corporation)
                  220 West Sixth Street
                  Tucson, AZ  85701
                  (520) 571-4000

1-5924            TUCSON ELECTRIC POWER COMPANY           86-0062700
                  (An Arizona Corporation)
                  220 West Sixth Street
                  Tucson, AZ  85701
                  (520) 571-4000
                    

                                
  

                              
                                
                                
Item 5. Other Events
        ------------

      As  previously reported, on December 10, 1998, the  Arizona
Corporation Commission (ACC) approved an order to put into effect
the Retail Electric Competition Rules (Rules) on January 1, 1999.

      On  January 4, 1999, Tony West (Republican) took office  as
ACC  Commissioner, replacing Renz Jennings (Democrat), whose term
had expired.

     On January 5, 1999, the ACC approved an order which:
     --   granted Motions for Reconsideration of the Rules,
     --   granted the Affected Utilities (TEP and other utilities in
          Arizona regulated by the ACC) a waiver from compliance with the
          Rules, and
     --   granted a stay of the Rules.

The  order stated that the ACC had "failed to adequately  address
the  issues  necessary to begin implementing competition  in  the
electric  industry in a timely or consistent manner."  The  order
also  directed the ACC Hearing Division to establish a Procedural
Schedule  for  dealing  with unresolved  issues.   These  matters
include, among others:

     --  establishing a competitive market structure between other
         jurisdictions and the Affected Utilities;
     --  determination of the quantification and recovery of stranded
         costs;
     --  approval of unbundled tariffs, which provide separate rates
         for generation, transmission, distribution, metering, meter
         reading, billing and collection, and ancillary services;
     --  questions of federal and state jurisdiction on transmission
         issues critical to system reliability; and
     --  pricing and cost recovery for must run generation.

      On  January  6,  1999, the ACC Hearing  Division  issued  a
Procedural  Order requesting all interested parties and  Affected
Utilities to file the following by January 20, 1999:
     --  a list of issues that still need to be resolved in electric
         industry restructuring,
     --  the proposed order in which the issues should be resolved,
     --  the proposed method for resolution and the time frames
         necessary, and
     --  any comments on a January 4, 1999 joint proposal by the
         Arizona Attorney General's Office and the Residential Utility
         Consumer Office which suggested a procedural schedule  for
         resolution  of  the remaining issues in electric  industry
         restructuring.

A  Procedural Conference is scheduled to be held on  January  22,
1999  to discuss the above issues.  The Company anticipates  that
shortly  thereafter the Hearing Division will issue a  Procedural
Schedule to set the timeframe for hearings on these issues.

     The Company cannot predict the outcome of these matters.



          
							 SIGNATURE


     Pursuant to the requirements of the Securities Exchange Act
of 1934, each registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.  The
signature for each undersigned company shall be deemed to relate
only to matters having reference to such company or its
subsidiary.



                               UNISOURCE ENERGY CORPORATION
                              ----------------------------
                                      (Registrant)



Date: January 8, 1999                   Ira R. Adler
                               ----------------------------
                                        Ira R. Adler
                                Executive Vice President and
                                 Principal Financial Officer
                             


                              TUCSON ELECTRIC POWER COMPANY
                              -----------------------------
                                      (Registrant)



 Date: January 8, 1999                 Ira R. Adler                       
                              -----------------------------
                                       Ira R. Adler
                               Executive Vice President and
                                Principal Financial Officer