v3.26.1
REGULATORY MATTERS (Tables)
 3 Months Ended
Mar. 31, 2026
Regulated Operations [Abstract]  
Schedule of PPFAC Regulatory Asset Balance
The table below summarizes the PPFAC regulatory asset (liability) balance:
Three Months Ended March 31,
(in millions)20262025
Beginning of Period$(32)$(49)
Deferred Fuel and Purchased Power Costs (1)
68 61 
PPFAC and Base Power Recoveries(52)(60)
End of Period$(16)$(48)
(1)Includes costs eligible for recovery through the PPFAC and base power rates.
Schedule of PPFAC Regulatory Liability Balance
The table below summarizes the PPFAC regulatory asset (liability) balance:
Three Months Ended March 31,
(in millions)20262025
Beginning of Period$(32)$(49)
Deferred Fuel and Purchased Power Costs (1)
68 61 
PPFAC and Base Power Recoveries(52)(60)
End of Period$(16)$(48)
(1)Includes costs eligible for recovery through the PPFAC and base power rates.
Schedule of Regulatory Assets and Liabilities
Regulatory assets and liabilities recorded on the Condensed Consolidated Balance Sheets are summarized in the table below:
($ in millions)Remaining Recovery Period
(years)		March 31, 2026December 31, 2025
Regulatory Assets
Pension and Other Postretirement Benefits (Note 7)
Various$90 $91 
Derivatives (Note 8)
449 23 
Lost Fixed Cost Recovery136 33 
Early Generation Retirement CostsVarious34 36 
Property Tax Deferrals (1)
133 32 
Transmission Revenue Requirement Balancing Account229 32 
Roadrunner Reserve I Accounting Order (2)
Various26 16 
Transportation Electrification and Electric Vehicle InfrastructureVarious9 8 
Self-Insured Medical & Short-Term Disability17 7 
Income Taxes Recoverable through Future Rates (3)
Various4 4 
Other Regulatory AssetsVarious10 12 
Total Regulatory Assets327 294 
Less Current Portion1153 127 
Total Noncurrent Regulatory Assets$174 $167 
Regulatory Liabilities
Income Taxes Payable through Future Rates (3)
Various$198 $199 
Renewable Energy StandardVarious103 102 
Deferred Investment Tax Credits (4)
Various102 94 
Net Cost of Removal (5)
Various68 75 
Pension and Other Postretirement Benefits (Note 7)
Various32 32 
Over-Recovered Fuel and Purchased Energy Costs116 32 
Derivatives (Note 8)
414 20 
Demand Side Management19 9 
Total Regulatory Liabilities542 563 
Less Current Portion1130 144 
Total Noncurrent Regulatory Liabilities$412 $419 
(1)Recorded as a regulatory asset based on historical ratemaking treatment allowing regulated utilities recovery of property taxes on a pay-as-you-go or cash basis. TEP records a liability to reflect the accrual for financial reporting purposes and an offsetting regulatory asset to reflect recovery for regulatory purposes.
(2)In April 2025, the ACC issued an accounting order allowing TEP to defer for future recovery in the 2025 Rate Case certain incurred costs associated with owning, operating, and maintaining Roadrunner Reserve I, including depreciation and amortization, property taxes, operations and maintenance expense, interest expense, and ITC transaction costs. These costs will be partially offset by benefits associated with ITCs.
(3)Amortized over 10 years or the lives of the assets.
(4)As federal ITCs are deferred, TEP records a regulatory liability to be refunded to customers. On the effective date of new rates, TEP expects to begin amortizing the portion of the deferred ITCs related to Roadrunner Reserve I over five years.
(5)Represents an estimate of the future cost of retirement, net of salvage value. The reserve is funded through ACC‑approved depreciation rates for transmission, distribution, generation, and general plant assets. These amounts are billed to customers but will not be spent until the assets are retired.