Tucson Electric Power is voluntarily providing this information for customers, investors and others who want to learn more about our business. Guided by our Officer team, the company maintains a holistic focus on responsible business practices that enables us to lead the way in clean and reliable energy and build prosperity, growth and resilience in our communities. As part of a family of utilities owned by Fortis Inc., a leader in the North American regulated electric and gas utility industry, TEP also contributes to Fortis’ commitment as a Task Force for Climate-Related Financial Disclosures supporter.
Below, you will learn more about how our company’s values are driving positive change for generations to come.
About Our Company
Our values define how we work and who we are
Our journey is rooted in our vision, to be an exceptional energy provider that positively impacts the lives of our employees, customers and communities. Our values represent our fundamental beliefs, guiding our behaviors and supporting our long-term strategic ambitions.
In our commitment to drive sustainability, we:
- work to protect and preserve our environment
- promote and support prosperity, growth and wellbeing in our communities
- work efficiently, use resources responsibly and partner with customers to care for our planet.
We drive sustainability through our investments in grid technology, through the infrastructure we’re developing for electric vehicles, and through our strategic philanthropic investments and community support.
Our quantitative metrics are one way to help understand our company’s focus on responsible and sustainable intentions and actions.
By the Numbers
Environmental
Energy resource diversification, carbon emissions reductions and climate resiliency efforts are major components of TEP’s sustainability strategy.
At Tucson Electric Power, we’re significantly increasing our use of solar and wind power and battery storage as part of a reliable, affordable and increasingly sustainable energy portfolio. Our plan calls for the elimination of coal-fired power and a transition to less carbon-intensive resources at a cost-effective pace through a thoughtful transition for our employees and the community.
In our 2023 Integrated Resource Plan (IRP), we announced a new aspirational goal: net zero direct greenhouse gas emissions by 2050.
Our new long term goal will build from the clear progress we’ve already made. Between 2019 and 2024, our CO2 emissions dropped 38 percent due to coal plant retirements and the addition of 480 megawatts (MW) of new wind, solar and storage projects.
TEP's CO2 Emissions Reduction
TEP’s 2023 IRP also describes the company’s plans to significantly expand its wind and solar power resources and has proposed retirement of its remaining coal-fired power plants by 2032.
TEP has already started expanding its cost‐effective clean energy resources. In 2021, TEP more than doubled its large community-scale renewable energy resources with three new wind and solar facilities including:
- The 250-megawatt (MW) Oso Grande Wind farm in southeast New Mexico, which generates enough power each year to serve nearly 100,000 homes. The site was chosen for its proximity to transmission lines and strong wind resources, particularly during the morning, evening and overnight hours when solar arrays produce little or no power.
- The Wilmot Energy Center (WEC) located south of Tucson, which includes a 100-MW solar array and 30-MW battery energy storage system. The batteries will be charged exclusively by 314,000 solar panels that can track the movement of the sun for increased production. Wilmot produces enough energy to serve the annual electric needs of about 26,000 homes.
- The Borderlands Wind Project, located in New Mexico, about 25 miles east of Springerville, includes 34 turbines that produce a combined 99 megawatts (MW). Over the course of a year, the wind farm will generate enough power to serve the annual electric needs of more than 26,000 homes.
In 2022, we brought our efficient 12.5 megawatt (MW) Raptor Ridge system online to generate clean energy for homeowners and renters participating in our TEP GoSolar Home program. The array, which features more than 35,000 photovoltaic modules that track the sun to produce more clean energy than fixed arrays, is designed to produce enough power to meet the annual electric needs of about 2,500 homes.
Construction is nearly complete on TEP’s Roadrunner Reserve 1, a 200-MW grid-tied battery energy storage system (BESS) in southeast Tucson designed to help satisfy customers’ everyday energy needs with abundant, low-cost solar energy. Roadrunner Reserve 1 is expected to go into service in summer 2025. Roadrunner Reserve 2, another 200-MW BESS, is expected to go into service in 2026.
In addition, TEP has signed several other agreements for new clean energy resources, including:
- Babacomari Solar, a 160 MW solar project in Cochise County coming online in 2026
- Wilmot Energy Center expansion, a 100 MW solar + 100 MW BESS coming online in 2026
- Winchester Solar, an 80 MW solar + 80 MW BESS coming online in 2027
The company is reducing and ultimately eliminating its reliance on coal. TEP’s 2023 IRP carries forward the 2020 IRP plans to ramp down and ultimately retire TEP’s two coal-fired units at the Springerville Generating Station (SGS) by 2032. From 2015, when TEP ended use of coal at the H. Wilson Sundt Generating Station in Tucson, to mid-2022, when TEP ended participation at the San Juan Generating Station in New Mexico, the company has retired 638 MW of coal capacity, a 41 percent reduction.
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 contributing to a reduction in groundwater use.
In December 2023, TEP issued an all-source request for proposals (RFP) to expand its wind and solar generation, energy storage systems and other resources such as energy efficiency. An all-source RFP provides an open and competitive process that allows us to gather information on the cost and availability of different resource types to determine how they can best fit into our comprehensive plan and complement our existing portfolio of resources.
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.
TEP’s efficient and cost-effective natural gas generation resources will support the expansion of solar and wind systems while also reducing water usage and air emissions. The energy marketplace also is evolving to help utilities address intermittency and use traditional resources more efficiently. In November 2024, TEP and other Arizona utilities announced plans to join Southwest Power Pool’s Markets+, a day-ahead and real-time energy market anticipated to span through the northwest, southwest and mountain west regions of the U.S.
Tucson Electric Power is accelerating the transition to cleaner transportation through a comprehensive electrification strategy to serve customers in residential, commercial, and community sectors. Our work includes targeted financial and technical support for EV infrastructure, public transit and fleet electrification, and innovative pilot programs to expand access in underserved areas. Efforts are designed to reduce emissions, enhance grid efficiency, and position TEP to meet ACC-approved, statewide EV adoption targets by 2030, while delivering long-term value to the grid, customers, and stakeholders.
TEP is committed to a “greener investment” strategy as the company transitions from coal-fired generation to providing more renewable and natural gas-fired power. TEP 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. TEP’s commitment is also evidenced by its 2021 Credit Agreement, which offers the potential for annual adjustments to interest rate spreads and fees based on TEP’s achievement of certain sustainability-linked metrics.
0
Megawatts of new utility-scale wind, solar plus storage projects commissioned in 2021 and 20220%
of our community’s power came from wind and solar in 2024
Social
Our dedication to service extends beyond providing safe, reliable energy services. We are committed to improving the quality of life in the communities we serve.
TEP is dedicated to being a good neighbor and providing assistance to our most vulnerable residents, helping to address complex issues such as homelessness and poverty, social inequities, hunger, domestic violence and other areas of need.
By working to address these needs, we’re giving individuals and families new opportunities for a better life, and supporting our business community in efforts to create a stronger, healthier and more vibrant community.
TEP’s dedication to service extends beyond providing safe, reliable power. For nearly 130 years, we’ve remained true to our vision of improving the quality of life in the communities we serve.
TEP contributed about $1.6 million to charitable causes in 2024 with funds from corporate resources, not customers’ rates. Our employees contributed more than 13,146 hours to nonprofit groups serving our community.
We also work to serve as our customers’ trusted energy partner, helping commercial and residential customers meet their own energy goals. Just a few of those efforts have included:
- supporting the University of Arizona’s ambitious plan for greater sustainability, powering its Tucson campus with new wind and solar resources
- helping large commercial and industrial customers through our Green Power Solutions program
- supporting bus fleet electrification efforts by Sun Tran to reduce carbon emissions
- helping K-12 schools and college campuses to become more energy efficient
- supporting Arizona communities impacted by the transition away from coal-fired power plants located in/near those communities
Protecting wildlife and preserving the environment is also a focus of our community investment work with community partners and through our employee volunteers.
We do this by directing resources and funding to support a variety of nonprofit organizations whose projects and programs protect and preserve our natural resources, including land, water, air and wildlife. From buffelgrass pulls that protect the desert, to cactus relocation and raptor protection, our environmental stewardship is part of our commitment to sustainability in everything that we do.
In addition to support for established funding initiatives including low-income assistance, education and environmental protection, Tucson Electric Power supports effective local non-profit organizations by investing in efforts that empower our neighbors and positively impact their lives.
The company also sponsors employee activities and other initiatives that promote unity and inclusion among employees as a means of strengthening the community we serve. The Company supports employee participation in Business Resource Groups (BRG), which are voluntary, employee-led groups that have established missions, goals, and practices that support career development and employee engagement and align with TEP's business priorities. Participants share ideas and issues to help promote an inclusive and respectful workplace.
Our commitment to an inclusive culture and the unique contributions, perspectives, and experiences of its employees helps us build a more inclusive workplace; activating meaningful steps along our journey to long-lasting change, as well as providing resources for employees to ensure everybody has the opportunity to contribute at their best.
TEP provides commercial customers with reliable energy, economic development discounts and energy efficiency programs.
Our rates are designed to attract new employers and encourage existing businesses to expand their operations. With support from TEP and local partners, five significant employers committed in 2024 to establishing new businesses in our community.
That resulted in the creation of 435 jobs in Southern Arizona, advancing our efforts to promote local economic development. Since 2016, TEP has worked directly with businesses that have created nearly 22,000 local jobs.
Governance
TEP’s commitment to sustainable growth and responsible governance enhances the value the company provides to customers, the community and other stakeholders.
TEP's commitment to sustainable and responsible business guides the decisions of the board of directors, executives, managers and supervisors at all levels and in all areas of the company.
The TEP Board of Directors draws on the expertise and strong business acumen of trusted business leaders with experience from the fields of utilities, defense, science, construction, healthcare and other disciplines. Its members value integrity, accountability, collaboration, sustainability and the creation of opportunities for the company and all of its employees.
The Board of Directors also established an Environmental, Safety and Security (ESS) Committee. The ESS Committee advises and assists with Board oversight of environmental matters, sustainability objectives and the safety and security of employees, customers and members of the public.
TEP's management team values innovation and performance excellence, and 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. They do all of this while modeling and promoting a positive, values-driven philosophy.
Several Officers from the management team sit on TEP’s Sustainability Officer Strategy Team. The Sustainability Officer Strategy Team is a cross-functional team led by executives and supported by a diverse group of directors, managers and subject matter experts. The Sustainability Officer Strategy Team is responsible for holding sustainability central to TEP’s business strategy.
Championed by the management team, TEP maintains Employees Creating Opportunities for Sustainability (ECOS), an employee-led ‘green team’ that identifies and implements our company's sustainability initiatives and raises sustainability awareness among coworkers and in the community. The group has revamped our recycling program, donated reusable water bottles to schools, hosted sustainability ‘lunch and learn’ meetings and other initiatives since its inception in 2020.
Over the last five years, ECOS has volunteered over 418 hours, positively impacting 15 local organizations around Tucson. Some examples include installing solar-paneled wildlife cameras in the Tortolita Preserve, building raised garden beds at Keeling Community Garden, removing invasive species from the Tohono Chul gardens and supporting the City of Tucson’s biannual Tucson Zero Waste collection event.
Safety is our highest priority, which is why we start our meetings with a safety share.
We are committed to working in a manner that prevents injury through a robust workplace safety program that promotes situational awareness through information sharing with industry leaders and fellow utilities. In 2024, our Corporate Safety team hosted the 12th annual Operations Safety Summit in Tucson. Leaders throughout the organization reflected on last year’s safety performance and considered the importance of relationships, trust and accountability in positively influencing safety culture. A new safety classification and learning model is designed to help guide employees by focusing more deeply on the hazards that are most likely to cause the most serious incidents.
We also promote public safety through advertising, customer communications and collaboration with local utilities and first responders.
We run an annual “Stay Away, Stay Alive” advertising campaign to educate electric customers about electrical safety during our summer storm season. We routinely share safe practices around electricity with our residential and business partners and help our customers protect our crews’ lives with increased awareness around work zones.
We also know safety starts early. We offer SafetyLand, an in-classroom program that teaches second graders about electrical safety through a fun, interactive board game.
As a provider of safe, dependable energy services, reliability performance is key.
TEP consistently benchmarks in the top quartile among our peers for reliability performance, and achieved performance records in 2020, as measured by Edison Electric Institute.
Investment in our system helps drive reliability, since TEP maintains a massive modern electrical grid that spans 1,155 square miles and includes approximately 5,100 miles of transmission and distribution lines, more than 4,300 cable-miles of underground distribution lines and more than 100 substations. It’s a complex system that requires ongoing maintenance and upgrades to honor our commitment to provide industry-leading reliability.
Over the last five years (2020-2024), TEP invested more than $3 billion to expand and upgrade our energy systems to reliably serve our growing community’s energy needs with increasingly clean energy. These improvements are designed to withstand extreme heat and powerful thunderstorms as well as the stress caused by increasing energy demands.
TEP works year-round to reduce the risk of its transmission systems causing or exacerbating wildfires that can destroy property and lead to power outages. In addition to these active measures, TEP is expanding its wildfire risk mitigation practices. Utility industry practices in the West are evolving and TEP continues to monitor and learn from other utilities to evaluate and adopt practices that make our systems more climate resilient, while ensuring safe, reliable and affordable power is available to our customers.
Beginning in 2025, TEP will implement expanded protections that include the possibility of public safety power shut-offs (PSPSs) — proactive, temporary power outages in certain limited areas to reduce wildfire risks during extreme and dangerous weather conditions. Other new practices under consideration include enhanced weather monitoring, smoke detection and other technological solutions for our facilities to mitigate fire risk.
Our highly trained workforce is critical in ensuring safe, reliable service. We support their growth and expertise through continuous training, emergency preparedness, employee support and employee development.
TEP’s robust cybersecurity measures protect customer and employee data, while using best practices to ensure compliance with regulations designed to maintain grid security.
The company employs certified cybersecurity professionals to develop continually evolving cyber protections and we have invested in safer, more secure facilities that provide enhanced protection against increasing physical- and cyber-security threats and support efficient operations.
The company is committed to helping employees thrive by adapting to change, investing in continuous learning, and promoting collaboration, inclusion, and engagement, while deepening the Company's safety culture.
Championed by the Officer Team, the company established a strategic roadmap in 2021 to build awareness, expand capacity and capabilities, take action and continually assess our efforts to promote engagement and inclusion in the workplace. Culture assessments and employee surveys have informed our commitments, as well as efforts in driving culture change, creating strong governance and driving leadership accountability for cultivating a positive, respectful and inclusive workplace.
The employee experience is a focus area to ensure everyone has the opportunity to feel connected to their work, recognized for their contributions and is comfortable being themselves.
The company engages employees for help in identifying local nonprofit organizations that are working effectively to strengthen our communities, particularly since our philanthropy efforts have been continuously informed by what matters to our employees.
The company has also been measuring the employee experience, sharing outcomes, and creating action plans to ensure everyone has the opportunity to take part in creating a vibrant workplace.
TEP is committed to improving the quality of life in our community.
TEP is expanding its renewable energy portfolios, exploring new customer options and providing pricing plans that address customers’ evolving energy needs. As Arizona continues to grow and change, TEP will continue providing reliable service to customers while investing in new, innovative technologies and cleaner energy resources.
Forward-Looking Information
This report contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Tucson Electric Power Company (“TEP”, “we”, “us” or “our") is including the following cautionary statements to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by us in this report. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events, future economic conditions, future operational or financial performance and underlying assumptions, and other statements that are not statements of historical facts. Forward-looking statements may be identified by the use of words such as anticipates, believes, estimates, expects, intends, continues, assumes, aspires, may, plans, predicts, potential, projects, would, could, forecast, target, goal, commitment, strategy, will, and similar expressions. We disclaim any obligation to update any forward-looking statements to reflect new information, future events or circumstances, except as may otherwise be required by the federal securities laws.
Forward-looking statements involve risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed herein. We express our estimates, expectations, beliefs, aspirations, and projections in good faith and believe them to have a reasonable basis. However, we make no assurances that the estimates, expectations, beliefs, aspirations, or projections set forth in this report will be achieved or accomplished. We have identified the following important factors that could cause actual results to differ materially from those discussed in our forward-looking statements. These may be in addition to other factors and matters discussed under Risk Factors in TEP’s Annual Report on Form 10-K for the year ended December 31, 2024, and in TEP’s other filings with the Securities and Exchange Commission and elsewhere in this report. These factors include: voter initiatives and federal, state and local regulatory and legislative decisions and actions, including changes in tax policies, tariffs, and energy policies as they may be affected by the policies and priorities of governmental officials at the federal, state and local levels; any change in the structure of utility service in Arizona resulting from the Arizona Corporation Commission's (“ACC”) or state legislature's examination of the state's energy policies or the City of Tucson's study of municipalization; changes in, and compliance with, environmental laws and regulatory decisions and policies that could increase operating and capital costs, reduce generation facility output, or accelerate generation facility retirements; unfavorable rulings, penalties, or findings by the Federal Energy Regulatory Commission; regional economic and market conditions that could affect customer growth and electricity usage; potential changes in the benefits of participation in the Energy Imbalance Market; changes in electricity consumption by retail customers; risks related to climate change, including shifts in weather seasonality and extreme weather events and their increasing frequency and severity, and wildfires, affecting electricity usage of our customers, operational performance, and operating and capital costs to ensure system reliability; our forecasts of peak demand and whether existing generation capacity and purchase power agreements are sufficient to meet the demand plus reserve margin requirements; our ability to implement successfully our business strategies and meet the growing demand for electricity, particularly in view of potential for new large customer requirements; the cost of debt and equity capital and access to capital markets and bank markets, which may affect our ability to raise additional capital and use the proceeds from any capital raised as originally intended; the performance of the stock market and changes in interest rates, which affect the value of our pension and other postretirement benefit plan assets and our related contribution requirements and expenses; our ability to manage timelines and budgets related to capital projects, including engineering, procurement and construction agreements to develop standalone battery energy storage facilities, and/or to obtain the anticipated performance or other benefits of such capital projects; the potential inability to make additions to our existing high voltage transmission system; unexpected increases in operations and maintenance expense, including increases due to inflationary effects, heightened geopolitical instability, and/or global supply chain challenges; resolution of pending litigation matters; changes in accounting standards; changes in our critical accounting estimates; the ongoing impact of mandated energy efficiency and distributed generation initiatives; our ability to meet our goals related to reducing carbon emissions by 2035 and 2050 due to load growth required by potential large new customers, and the potential impact on our financial condition; changes to long-term contracts; the cost of fuel and power supplies; fluctuations or increases in commodity prices; the ability to obtain coal or natural gas from our suppliers; the timing and cost of generation facility decommissioning and mine reclamation activities; cyber-attacks, data breaches, or other cyberspace attacks to our information security and our operations and technology infrastructure, including attacks that may arise from heightened geopolitical instability; physical attacks to our electric generation, transmission and distribution assets; the performance of TEP’s generation facilities, including renewable generation resources; the extent of the impact of a global health crisis on our business and operations, and any economic and societal disruptions resulting therefrom and from the government actions taken in response thereto; the implementation of TEP’s 2023 IRP; and our ability to obtain ACC approval of a formula rate plan with acceptable terms.