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DEBT AND CREDIT AGREEMENT
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
DEBT AND CREDIT AGREEMENT DEBT AND CREDIT AGREEMENT
DEBT
Long-term debt matures more than one year from the date of debt issuance. The following table presents the components of Long-Term Debt, Net on the Consolidated Balance Sheets:
December 31,
($ in millions)Interest RateMaturity Date20232022
Notes
2012 Senior Notes3.85%2023$— $150 
2015 Senior Notes (1)
3.05%2025300 300 
2020 Senior Notes1.50%2030300 300 
2022 Senior Notes3.25%2032325 325 
2014 Senior Notes5.00%2044150 150 
2018 Senior Notes4.85%2048300 300 
2020 Senior Notes4.00%2050350 350 
2021 Senior Notes3.25%2051325 325 
2023 Senior Notes5.50%2053375 — 
Tax-Exempt Local Furnishings Bonds
2013 Pima A 4.00%2029— 91 
Total Long-Term Debt (2)
2,425 2,291 
Less Unamortized Discount and Debt Issuance Costs28 26 
Less Current Maturities of Long-Term Debt— 150 
Total Long-Term Debt, Net$2,397 $2,115 
(1)On December 15, 2024, the 2015 Senior Notes become callable at par plus accrued interest. The notes mature on March 15, 2025.
(2)As of December 31, 2023 and 2022, all of TEP's debt is unsecured.
Debt Issuances and Redemptions
In February 2023, TEP issued and sold $375 million aggregate principal amount of 5.50% senior unsecured notes due April 2053. TEP may redeem the notes prior to October 15, 2052, with a make-whole premium plus accrued interest. On or after October 15, 2052, TEP may redeem the notes at par plus accrued interest. TEP used the net proceeds to redeem and repay debt in March 2023 and for general corporate purposes.
In March 2023, TEP repaid at maturity $150 million aggregate principal amount of 3.85% senior unsecured notes.
In March 2023, TEP redeemed at par prior to maturity $91 million aggregate principal amount of tax-exempt bonds bearing interest at a rate of 4.00% per annum.
In February 2022, TEP issued and sold $325 million aggregate principal amount of 3.25% senior unsecured notes due May 2032. TEP may redeem the notes prior to February 15, 2032, with a make-whole premium plus accrued interest. On or after February 15, 2032, TEP may redeem the notes at par plus accrued interest. TEP used the net proceeds to redeem debt in March 2022 and June 2022 and for general corporate purposes.
In March 2022, TEP redeemed at par prior to maturity $177 million aggregate principal amount of fixed rate tax-exempt bonds bearing interest at a rate of 4.50% per annum.
In June 2022, TEP redeemed at par prior to maturity $16 million aggregate principal amount of fixed rate tax-exempt bonds bearing interest at a rate of 4.50% per annum.
Maturities
Long-term debt matures on the following dates:
($ in millions)
Long-Term Debt (1)
2024$— 
2025300 
2026— 
2027— 
2028— 
Thereafter2,125 
Total$2,425 
(1)Total long-term debt excludes $19 million of related unamortized debt issuance costs and $9 million of unamortized original issue discount.
CREDIT AGREEMENT
In October 2021, TEP entered into an unsecured credit agreement that provides for revolving credit commitments with swingline and LOC sublimits, due in October 2026, the termination date (2021 Credit Agreement). The final maturity date is subject to two one-year extensions if certain conditions are satisfied. Amounts borrowed are recorded in Borrowings Under Credit Agreement on the Consolidated Balance Sheets.
•Amounts borrowed under the 2021 Credit Agreement are used for working capital and other general corporate purposes.
•Interest rates and fees are based on a pricing grid tied to TEP's credit rating.
LOCs are issued from time to time to support energy procurement, hedging transactions, and other business activities. In June 2023, the 2021 Credit Agreement was amended to provide for the transition to SOFR-based borrowings.
Terms are as follows:
Sub-Limit Swingline(1)
Sub-Limit LOCWeighted Average Interest Rate
Capacity
Borrowed(2)
Available
Pricing(3)
($ in millions)December 31, 2023
Agreement$250 $15 $50 $— $250 — %
SOFR+ADJ 0.10%+1.025% or ABR+0.025%
($ in millions)December 31, 2022
Agreement$250 $15 $50 $5 $245 — %
LIBOR+1.025% or ABR+0.025%
(1)ABR pricing would apply to swingline loans.
(2)Includes a $5 million LOC at a rate of 1.025% per annum as of December 31, 2022, which was cancelled in August 2023.
(3)TEP's pricing may be adjusted based on performance measured using two sustainability targets: (i) the three-year average Occupational Safety and Health Administration total recordable incident rate, excluding solely COVID-19 pandemic-related incidents; and (ii) capacity targets for owned plus firm purchased power agreement renewable generation, including energy storage.
As of February 8, 2024, there was $235 million available under the 2021 Credit Agreement.