v3.25.1
FAIR VALUE MEASUREMENTS AND DERIVATIVE INSTRUMENTS (Tables)
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Schedule of Financial Instruments Measured at Fair Value on Recurring Basis
The following tables present, by level within the fair value hierarchy, TEP’s assets and liabilities accounted for at fair value through net income on a recurring basis classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
Level 1Level 2Total
(in millions)March 31, 2025
Assets
Cash Equivalents (1)
$85 $— $85 
Restricted Cash (1)
33 — 33 
Energy Derivative Contracts, Regulatory Recovery (2)
— 45 45 
Energy Derivative Contracts, No Regulatory Recovery (2)
— 23 23 
Total Assets118 68 186 
Liabilities
Energy Derivative Contracts, Regulatory Recovery (2)
— (47)(47)
Energy Derivative Contracts, No Regulatory Recovery (2)
— (1)(1)
Total Liabilities— (48)(48)
Total Assets (Liabilities), Net$118 $20 $138 
(in millions)December 31, 2024
Assets
Restricted Cash (1)
$35 $— $35 
Energy Derivative Contracts, Regulatory Recovery (2)
— 33 33 
Energy Derivative Contracts, No Regulatory Recovery (2)
— 4 4 
Total Assets35 37 72 
Liabilities
Energy Derivative Contracts, Regulatory Recovery (2)
— (31)(31)
Energy Derivative Contracts, No Regulatory Recovery (2)
— (1)(1)
Total Liabilities— (32)(32)
Total Assets (Liabilities), Net$35 $5 $40 
(1)Cash Equivalents and Restricted Cash represent amounts held in money market funds, which approximate fair market value. Cash Equivalents are included in Cash and Cash Equivalents on the Condensed Consolidated Balance Sheets. Restricted Cash is included in Investments and Other Property and in Current Assets—Other on the Condensed Consolidated Balance Sheets.
(2)Energy Derivative Contracts include gas swap agreements and forward power purchase and sale contracts entered into to reduce exposure to energy price risk. These contracts are included in Derivative Instruments on the Condensed Consolidated Balance Sheets.
Schedule of Potential Offset of Assets by Counterparty Netting and Cash Collateral The tables below present the potential offset of counterparty netting and cash collateral:
Gross Amount Recognized in the Balance SheetsGross Amount Not Offset in the Balance SheetsNet Amount
Counterparty Netting of Energy ContractsCash Collateral Received/Posted
(in millions)March 31, 2025
Derivative Assets
Energy Derivative Contracts$68 $23 $— $45 
Derivative Liabilities
Energy Derivative Contracts(48)(23)— (25)
(in millions)December 31, 2024
Derivative Assets
Energy Derivative Contracts$37 $17 $— $20 
Derivative Liabilities
Energy Derivative Contracts(32)(17)— (15)
Schedule of Potential Offset of Liabilities by Counterparty Netting and Cash Collateral The tables below present the potential offset of counterparty netting and cash collateral:
Gross Amount Recognized in the Balance SheetsGross Amount Not Offset in the Balance SheetsNet Amount
Counterparty Netting of Energy ContractsCash Collateral Received/Posted
(in millions)March 31, 2025
Derivative Assets
Energy Derivative Contracts$68 $23 $— $45 
Derivative Liabilities
Energy Derivative Contracts(48)(23)— (25)
(in millions)December 31, 2024
Derivative Assets
Energy Derivative Contracts$37 $17 $— $20 
Derivative Liabilities
Energy Derivative Contracts(32)(17)— (15)
Schedule of Financial Impact of Energy Contracts The table below presents the unrealized gains and losses recorded to a regulatory asset or liability in the balance sheet:
Three Months Ended March 31,
(in millions)20252024
Unrealized Net Gain (Loss)$(3)$(14)
The table below presents amounts recorded in Operating Revenues on the Condensed Consolidated Statements of Income:
Three Months Ended March 31,
(in millions)20252024
Operating Revenues$21 $27 
Schedule of Derivative Volumes The following table presents volumes associated with the energy contracts:
March 31, 2025December 31, 2024
Power Contracts GWh5,747 1,634 
Gas Contracts BBtu88,838 86,070 
Schedule of Face Value and Estimated Fair Value of Long-Term Debt The following table includes the net carrying value and estimated fair value of TEP's long-term debt:
Fair Value HierarchyNet Carrying ValueFair Value
(in millions)March 31, 2025December 31, 2024March 31, 2025December 31, 2024
Liabilities
Long-Term Debt, including Current MaturitiesLevel 2$2,791 $2,495 $2,479 $2,153