UNS Energy is a subsidiary of Fortis, a leader in the North American regulated electric and gas utility industries. About 93 percent of Fortis’ assets are associated with the delivery of electricity and natural gas. Few electric subsidiaries own generating resources, which account for about 7 percent of Fortis’ assets. These generating resources are primarily owned by UNS Energy subsidiaries.
UNS Energy is the Tucson, Arizona-based parent company of Tucson Electric Power (TEP). TEP, which provides electric service to more than 430,000 customers in Southern Arizona.
TEP is voluntarily providing sustainability performance metrics for customers, investors and other stakeholders seeking information about our Environmental, Social and Governance (ESG) performance .
Energy resource diversification and carbon emissions reductions are major components of TEP’s sustainability strategy. TEP’s 2020 Integrated Resource Plan (IRP) demonstrates how the company is planning to build cleaner, more flexible resource portfolios.
TEP Carbon Emissions Reduction & Resource Portfolio Diversification
In 2020, TEP announced plans to reduce carbon emissions 80 percent below 2005 levels by 2035. The carbon emissions reduction goal, described in the company’s 2020 Integrated Resource Plan (IRP), was developed in partnership with the University of Arizona’s Institute of the Environment. The goal represents the company’s fair share of worldwide efforts to limit warming to well below 2 degrees Celsius under the 2015 Paris Agreement. The plan supports global efforts to reduce climate change and represents a reduction of more than 50 million tons of carbon dioxide (CO2) emissions compared to TEP’s previous plan.
TEP—Direct CO2 Emissions
TEP’s 2020 IRP also describes the company’s plans to provide 70 percent of its power from renewable resources by 2035. The company will significantly expand its wind and solar power resources and has proposed retirement of its remaining coal-fired power plants over the next 12 years.
TEP Retail Energy Mix 2035The portfolio energy charts above represent the energy resource mix to serve TEP’s retail customers. TEP’s goal to deliver 70 percent renewable power to retail customers by 2035 primarily will be based on utility-scale resources and some distributed generation.
TEP has already started expanding its cost‐effective renewable resources. The addition of two large New Mexico wind farms and a solar-plus-storage system in Tucson will more than double the company’s community-scale clean energy capacity by 2021, allowing it to provide more than 28 percent of its power from renewable resources.
The company also is reducing and ultimately eliminating its reliance on coal. From 2015, when TEP ended use of coal at the H. Wilson Sundt Generating Station in Tucson, to mid-2022, when TEP plans to end participation at the San Juan Generating Station in New Mexico, the company expects to retire 638 megawatts (MW) of coal capacity, a 41 percent reduction. TEP’s 2020 IRP also announced plans to ramp down and ultimately retire TEP’s two coal-fired units at the Springerville Generating Station (SGS) by 2032.
Ramping down reliance on coal-fired resources will help keep service affordable for TEP customers while significantly reducing air emissions and water consumption, eliminating the use of surface water for power generation and reduce groundwater use by 70 percent.
Increasingly diverse, sustainable generation will create operational challenges that require new ways of managing the intermittency and variability of renewable resources. Through a partnership with the University of Arizona, TEP is using unique and highly customized forecasting models to predict solar and wind system production.
The company also has invested in additional natural gas generation, a cleaner, more efficient and cost-effective energy resource. TEP’s natural gas generation resources will support the expansion of solar and wind systems while reducing water usage and emissions. The energy marketplace also is evolving to help utilities address intermittency and use traditional resources more efficiently. TEP is preparing to join the California Independent System Operator’s Energy Imbalance Market (EIM) in April 2022, allowing it to execute real-time energy trades in 15-minute increments to address short-term energy needs.
TEP is committed to a “green investment” strategy as the company transitions from coal-fired generation to providing more renewable and natural gas-fired power. TEP already is recognized as an industry leader in development of energy storage systems and offers an online dashboard that shows customers how much renewable power the company’s community-scale wind and solar power systems are generating in real-time throughout the day.
Strategies described in TEP’s IRP are expected to comply with the ACC’s proposed energy rules.
As a provider of a critical service, TEP has remained vigilant about supporting public health and ensuring the continued availability of safe, reliable energy during the coronavirus pandemic.
TEP has taken proactive steps to limit unnecessary risks of exposure for employees and the public. The company stands ready to help customers affected by this pandemic with payment extensions or enrollment in short-term assistance and bill discount programs. TEP and sister company UniSource Energy Services also donated a combined $1 million to bill payment assistance and other coronavirus relief efforts in the communities they serve across Arizona.
TEP invests significantly in the success of the community, contributing more than $1.7 million to charitable causes annually with funds from corporate resources, not customers’ rates. Employees also contribute thousands of volunteer hours each year to hundreds of nonprofit groups throughout the Tucson area.
In addition to support for established funding initiatives including low-income assistance, education and environmental protection, both companies plan to invest in efforts that promote diversity, inclusion and social justice. The companies will sponsor employee activities and other initiatives that promote unity and inclusion among employees and in the communities they serve.
TEP provides commercial customers with affordable energy, economic development discounts and energy efficiency programs. TEP’s economic development rates are designed to attract new employers and encourage existing businesses to expand their operations.
Safety is the highest priority for TEP. The company and its employees are committed to working in a manner that prevents injury through a robust workplace safety program that promotes situational awareness through information sharing.
TEP promotes public safety through advertising, customer communications and collaboration with local utilities and first responders. It runs annual “Stay Away, Stay Alive” advertising campaigns to educate electric customers about electrical safety.
TEP and UNS Energy’s commitment to sustainable growth and responsible governance enhances the value the company provides to customers and other stakeholders. This commitment guides the decisions of the board of directors, executives, managers and supervisors at all levels and in all areas of the company.
TEP’s management team values innovation and excellent performance, and it promotes an unwavering culture of compliance, safety and a commitment to customers. With strong leadership skills and thorough knowledge of company operations, our leaders focus on improving efficiencies and generating value for a diverse set of stakeholders.
TEP’s robust cybersecurity measures protect customer and employee data, while using best practices to ensure compliance with regulations designed to maintain grid security. TEP employs certified cybersecurity professionals to develop continually evolving cyber protections.
Sustainability Strategy Summary
TEP is committed to improving the quality of life in the community. The company’s commitment to sustainability is reflected in the continued expansion of its renewable energy portfolio, new customer options and new pricing plans that satisfy customers’ evolving energy needs. All employees and customers and a majority of the companies’ operations are located in Arizona, one of the nation’s sunniest and fastest growing states.
As the state’s communities continue to grow and change, TEP will continue providing reliable service to customers while investing in new, innovative technologies and expanding renewable resources.