REGULATORY MATTERS	3 Months Ended
Mar. 31, 2014
Text Block [Abstract]
REGULATORY MATTERS	REGULATORY MATTERS The ACC and the FERC each regulate portions of the utility accounting practices and rates of TEP, UNS Electric, and UNS Gas. The ACC regulates rates charged to retail customers, the siting of generation and transmission facilities, the issuance of securities, and transactions with affiliated parties. The FERC regulates terms and prices of transmission services and wholesale electricity sales. The pending merger with Fortis is subject to approval by the ACC. The FERC approved the merger in April 2014. Purchased Power and Fuel Adjustment Clause In April 2014, the ACC approved a Purchased Power and Fuel Adjustment Clause (PPFAC) rate for TEP of 0.1 cents per kWh for the period May through September 2014 and 0.5 cents per kWh for the period October 2014 through March 2015. TEP's PPFAC rate was a credit of 0.14 cents per kWh for the period July 2013 through April 2014. San Juan Mine Fire Insurance Proceeds In September 2011, a fire at the underground mine providing coal to San Juan Generating Station (San Juan) caused interruptions to mining operations and resulted in increased fuel costs. The 2013 TEP Rate Order required TEP to defer incremental fuel costs of $10 million from recovery under the PPFAC pending final resolution of an insurance claim by the San Juan Coal Company and distribution of insurance proceeds to San Juan participants. In March 2014, TEP received the first installment of its portion of the insurance settlement proceeds of $5 million. The proceeds offset the deferred costs and are reflected in our cash flow statements as an other operating cash receipt. Energy Efficiency Standards TEP, UNS Electric, and UNS Gas are required to implement cost-effective Demand Side Management (DSM) programs to comply with the ACC's Energy Efficiency (EE) Standards. The EE Standards provide for a DSM surcharge to recover, from retail customers, the costs to implement DSM programs as well as a performance incentive. In the first quarter of 2014, TEP recorded a DSM performance incentive of $2 million that is included in Electric Retail Sales in the UNS Energy and TEP income statements. Lost Fixed Cost Recovery Mechanism The Lost Fixed Cost Recovery (LFCR) mechanism provides recovery of certain non-fuel costs that would go unrecovered due to lost retail kWh sales as a result of implementing ACC approved energy efficiency programs and distributed generation targets. During separate rate case proceedings in 2013, the ACC authorized LFCR mechanisms for TEP and UNS Electric, subject to a year-over-year cap of 1% of each company’s respective total retail revenues. TEP and UNS Electric expect to file their first LFCR reports with the ACC on or before May 15, 2014. We expect the new LFCR rates to become effective on July 1, 2014, upon review by the ACC of verified lost retail kWh sales due to energy efficiency programs and distributed generation implemented in 2013. TEP and UNS Electric recorded LFCR revenues of $5 million and $1 million, respectively, in the first quarter of 2014 related to reductions in retail kWh sales due to energy efficiency programs and distributed generation implemented in 2013. We recognize LFCR revenue when verifiable regardless of when the lost retail kWh sales occur. LFCR revenue is included in Electric Retail Sales in the income statements.

REGULATORY MATTERS

The ACC and the FERC each regulate portions of the utility accounting practices and rates of TEP, UNS Electric, and UNS Gas. The ACC regulates rates charged to retail customers, the siting of generation and transmission facilities, the issuance of securities, and transactions with affiliated parties. The FERC regulates terms and prices of transmission services and wholesale electricity sales. The pending merger with Fortis is subject to approval by the ACC. The FERC approved the merger in April 2014.

Purchased Power and Fuel Adjustment Clause

In April 2014, the ACC approved a Purchased Power and Fuel Adjustment Clause (PPFAC) rate for TEP of 0.1 cents per kWh for the period May through September 2014 and 0.5 cents per kWh for the period October 2014 through March 2015. TEP's PPFAC rate was a credit of 0.14 cents per kWh for the period July 2013 through April 2014.

San Juan Mine Fire Insurance Proceeds

In September 2011, a fire at the underground mine providing coal to San Juan Generating Station (San Juan) caused interruptions to mining operations and resulted in increased fuel costs. The 2013 TEP Rate Order required TEP to defer incremental fuel costs of $10 million from recovery under the PPFAC pending final resolution of an insurance claim by the San Juan Coal Company and distribution of insurance proceeds to San Juan participants. In March 2014, TEP received the first installment of its portion of the insurance settlement proceeds of $5 million. The proceeds offset the deferred costs and are reflected in our cash flow statements as an other operating cash receipt.

Energy Efficiency Standards

TEP, UNS Electric, and UNS Gas are required to implement cost-effective Demand Side Management (DSM) programs to comply with the ACC's Energy Efficiency (EE) Standards. The EE Standards provide for a DSM surcharge to recover, from retail customers, the costs to implement DSM programs as well as a performance incentive. In the first quarter of 2014, TEP recorded a DSM performance incentive of $2 million that is included in Electric Retail Sales in the UNS Energy and TEP income statements.

Lost Fixed Cost Recovery Mechanism

The Lost Fixed Cost Recovery (LFCR) mechanism provides recovery of certain non-fuel costs that would go unrecovered due to lost retail kWh sales as a result of implementing ACC approved energy efficiency programs and distributed generation targets.

During separate rate case proceedings in 2013, the ACC authorized LFCR mechanisms for TEP and UNS Electric, subject to a year-over-year cap of 1% of each company’s respective total retail revenues.

TEP and UNS Electric expect to file their first LFCR reports with the ACC on or before May 15, 2014. We expect the new LFCR rates to become effective on July 1, 2014, upon review by the ACC of verified lost retail kWh sales due to energy efficiency programs and distributed generation implemented in 2013.

TEP and UNS Electric recorded LFCR revenues of $5 million and $1 million, respectively, in the first quarter of 2014 related to reductions in retail kWh sales due to energy efficiency programs and distributed generation implemented in 2013.

We recognize LFCR revenue when verifiable regardless of when the lost retail kWh sales occur. LFCR revenue is included in Electric Retail Sales in the income statements.