8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT
(DATE OF EARLIEST EVENT REPORTED): April 30, 2010

		IRS Employer
Commission	Registrant; State of Incorporation;	Identification
File Number	Address; and Telephone Number	Number
1-13739	UNISOURCE ENERGY CORPORATION	86-0786732
	(An Arizona Corporation)
	One South Church Avenue, Suite 100
	Tucson, AZ 85701
	(520) 571-4000
1-5924	TUCSON ELECTRIC POWER COMPANY	86-0062700
	(An Arizona Corporation)
	One South Church Avenue, Suite 100
	Tucson, AZ 85701
	(520) 571-4000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On April 30, 2010, UniSource Energy Corporation (“UniSource Energy”) issued a press release announcing earnings for the quarter ended March 31, 2010 for UniSource Energy and Tucson Electric Power Company. A copy of the press release is attached hereto as Exhibit 99.1. UniSource Energy also posted supplemental information accessible from a link on its website, www.uns.com. The supplemental information is attached hereto as Exhibits 99.2 and 99.3.

The Company’s press releases and other communications may include certain non-Generally Accepted Accounting Principles (GAAP) financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements.

Non-GAAP financial measures utilized by the Company include presentations of revenues, operating expenses, operating income and earnings (loss) per share. The Company uses these non-GAAP measures to evaluate the operations of the Company. Certain non-GAAP financial measures utilized by the Company exclude: the impact of non-recurring items: the effect of accounting changes or adjustments; expenses that are reimbursed by third parties; and other items. The Company’s management believes that these non-GAAP financial measures provide useful information to investors by removing the effect of variances in GAAP reported results of operations that are not indicative of fundamental changes in the earnings or cash flow capacity of the Company’s operations. Management also believes that the presentation of the non-GAAP financial measures is largely consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare current non-GAAP measures with non-GAAP measures with respect to prior periods.

Item 9.01 Financial Statements and Exhibits

Exhibit 99.1	UniSource Energy Corporation Press Release, dated April 30, 2010.
Exhibit 99.2	Supplemental earnings information posted on UniSource Energy’s website, dated April 30, 2010.
Exhibit 99.3	Conference call presentation slides posted on UniSource Energy’s website, dated April 30, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: April 30, 2010	UNISOURCE ENERGY CORPORATION (Registrant)
	Kevin P. Larson
	Kevin P. Larson
	Senior Vice President and Principal Financial Officer
Date: April 30, 2010	TUCSON ELECTRIC POWER COMPANY (Registrant)
	Kevin P. Larson
	Kevin P. Larson
	Senior Vice President and Principal Financial Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	April 30, 2010
Media Contact: Joe Salkowski, (520) 884-3625	Page 1 of 7
Financial Analyst Contact: Jo Smith, (520) 884-3650

UNISOURCE ENERGY REPORTS FIRST QUARTER 2010 EARNINGS,
MAINTAINS 2010 EARNINGS GUIDANCE RANGE

• UniSource Energy’s net income for the first quarter of 2010 was $20 million, or $0.52 per diluted share of common stock, compared with net income of $5.0 million, or $0.14 per diluted share, in the first quarter of 2009.

• The improvement in 2010 first quarter earnings is due primarily to lower operations and maintenance (O&M) expense, lower depreciation expense and benefits from the operations of Unit 4 at Tucson Electric Power’s Springerville Generating Station.

• UniSource Energy maintains its 2010 earnings estimate range of $2.75 — $3.00 per diluted share.

Tucson, Ariz. — UniSource Energy Corporation (NYSE: UNS) today reported first quarter 2010 net income of $20 million, or $0.52 per diluted share of common stock, compared with $5.0 million, or $0.14 per diluted share, in the same period last year.

UniSource Energy’s financial results primarily reflect those of its principal subsidiary, Tucson Electric Power (TEP), which reported income of $10 million in the first three months of 2010, compared with a net loss of $1 million in the same period last year. The increase is due primarily to a $9 million reduction in base O&M expense compared with the first quarter of 2009, when some of TEP’s key generating units were undergoing extensive maintenance.

For the full-year, UniSource Energy is maintaining its estimate of base O&M at approximately $275 million, which is unchanged from the level anticipated when 2010 guidance was issued in February 2010.

Overall kilowatt-hour (kWh) sales to TEP’s retail customers were unchanged from the first quarter of 2009. Increased usage by residential and mining customers was offset by lower consumption among TEP’s commercial and industrial customers.

“TEP’s sales benefited from a 3.8 percent increase in residential demand and increased activity by our mining customers,” said Paul Bonavia, Chairman, President and CEO of UniSource Energy. “Unemployment rates have leveled off and Tucson area home sales continued to rise during the first quarter of 2010. But lagging sales to TEP’s commercial and industrial customers indicate that our local economy remains sluggish.”

The December 2009 completion of Unit 4 at TEP’s Springerville Generating Station (SGS) contributed to a $4 million increase in first-quarter rents and fees from the operations of SGS Units 3 and 4. Salt River Project (SRP) owns the new unit, while Tri-State Generation and Transmission Association owns Unit 3. TEP operates all four units at the plant and also provided temporary transmission capacity to SRP during the first quarter, contributing to a $3.6 million increase in transmission revenues.

Seasonality of Earnings

The net income and results of operations of TEP as well as of UNS Gas and UNS Electric — operating subsidiaries of UniSource Energy Services (UES) — are seasonal in nature. TEP and UNS Electric typically record a majority of their net income during the second and third quarters, when hot weather contributes to higher energy consumption. TEP’s retail prices, which include higher rates for higher levels of energy use, also shift a larger share of the company’s earnings into those periods.

1

Energy demand from UNS Gas customers typically peaks during the winter. Accordingly, UNS Gas records the majority of its net income during the first and fourth quarters.

Tucson Electric Power

Retail kWh Sales

TEP’s total first-quarter retail kWh sales were similar to those from the first quarter of 2009. Residential kWh sales were up 3.8 percent; commercial sales were down 2.3 percent, industrial sales were down 3.2 percent and sales to mining customers were up 0.9 percent compared with the first quarter of 2009. Heating degree days in the first quarter of 2010 were 9 percent above the 10-year average, but the cooler weather had little impact on retail kWh sales.

Retail Revenues

Retail margin revenues increased $0.8 million, or less than 1 percent, in the first quarter of 2010 compared with the first quarter of 2009. That increase does not include a $5.6 million increase in customer surcharges used to fund renewable energy and energy efficiency programs or a $3.5 million increase in charges to cover fuel and purchased power costs.

Long-Term Wholesale Revenues

Long-term wholesale kWh sales increased 4.7 percent in the first three months of 2010 compared with the same period last year. Margin on long-term wholesale sales was $8.1 million, which represents an increase of $0.4 million compared with the first quarter of 2009. In the first quarter of 2010, TEP settled a dispute related to transactions in 2000 and 2001 with the California Power Exchange and recorded a pre-tax loss of $3.0 million for a provision for wholesale refunds.

Transmission Revenues

Revenues from the wholesale transmission of electricity increased $3.6 million compared with the first quarter of 2009. During the first quarter of 2010, TEP provided SRP with temporary transmission capacity for the output of SGS Unit 4 while repairs were being made to SRP’s equipment.

Other Operating Expenses

Lower plant maintenance and pension costs during the first quarter of 2010 contributed to a $9 million reduction in TEP’s base O&M expense compared with the same period last year. Base O&M excludes costs directly offset by customer surcharges and third-party reimbursements.

Depreciation expense decreased $2.7 million due primarily to new, lower depreciation rates for transmission assets and lower depreciation on Unit 4 at TEP’s H. Wilson Sundt Generating Station. Those savings were partially offset by depreciation related to new plant additions.

2

Benefits of SGS Units 3 and 4

TEP received benefits in the form of rental payments, operating and other fees related to SGS Units 3 and 4 of $7 million in the first quarter of 2010 compared with $3 million the same period last year. The increase is primarily due to the operation of Unit 4, which was completed in December 2009.

UNS Gas

UNS Gas reported net income of $5.8 million in the first quarter of 2010, compared with $4.9 million in first three months of 2009. The change is due primarily to a 12-percent increase in retail therm sales linked to colder winter weather. Higher therm sales led to a $1.5 million increase in retail margin revenues compared with the first quarter of 2009.

In March 2010, the Arizona Corporation Commission (ACC) approved a base rate increase for UNS Gas of $3.5 million, or 2 percent, to cover increases in capital and operating costs. The rate increase became effective on April 1, 2010.

UNS Electric

UNS Electric reported net income of $2.9 million in the first quarter of 2010, compared with $0.8 million in same period last year. The increase is due primarily to other income of $3 million related to a settlement with Arizona Public Service for refunds related to transactions with the California Power Exchange.

Higher kWh sales during the first quarter led to a $0.7 million increase in retail margin revenues. UNS Electric’s total retail kWh sales were 8.8 percent higher than during the same period of 2009. Industrial and mining sales were up a combined 36 percent, while residential sales increased 5.3 percent due primarily to colder winter weather.

In April 2009, UNS Electric filed a general rate case with the ACC requesting an average base rate increase of $13.5 million, or 7.4 percent, to cover its operating and capital costs. The ACC staff recommended a rate increase that would result in additional revenue of approximately $8 million. A hearing before an administrative law judge was completed in mid-February, and the ACC is expected to issue a final order in the next several months.

3

UniSource Energy Net Income and Earnings per Share Summary

	1st Quarter
Net Income	2010		2009
	-Millions-
Tucson Electric Power	$	10.4		($0.6	)
UNS Gas		5.8		4.9
UNS Electric		2.9		0.8
Other (1)		0.9		(0.2	)
Net Income	$	20.0	$	4.9
Avg. Basic Shares Outstanding (millions)		36.1		35.7
Avg. Diluted Shares Outstanding (millions)		40.7		36.2

	1st Quarter
Earnings Per UniSource Energy Share	2010		2009
Tucson Electric Power	$	0.29		($0.02	)
UNS Gas		0.16		0.14
UNS Electric		0.08		0.02
Other (1)		0.02		0.00
Net Income per Basic Share	$	0.55	$	0.14
Net Income per Diluted Share (2)	$	0.52	$	0.14

(1)	Includes UniSource Energy on a stand-alone basis and results from Millennium Energy Holdings, Inc. and UniSource Energy Development, wholly-owned subsidiaries of UniSource Energy.
(2)	For the three months ended March 31, 2009, 4 million potentially dilutive shares from the conversion of convertible senior notes, and after-tax interest expense of $1 million were not included in the computation of diluted EPS because to do so would be anti-dilutive.

UniSource Energy believes the presentation of TEP, UNS Gas, UNS Electric and Other segment net income or loss on a per basic UniSource Energy share basis, which are non-GAAP financial measures, provides useful information to investors by disclosing the results of operations of its business segments on a basis consistent with UniSource Energy’s reported earnings or losses.

4

Conference Call and Webcast

The company will host a conference call on Friday, April 30 at 12 p.m. EDT to discuss the financial results and outlook. To participate in the call, please dial in five to 10 minutes prior to the start.

Dial-in number: (877) 582-0446
Reference code: 70724356

The conference call also can be heard live on UniSource Energy’s website. The webcast can be accessed at uns.com and will be available for replay for seven days.

Replay number: (800) 642-1687
Reference code: 70724356

In conjunction with this earnings announcement, UniSource Energy has provided detailed information on its performance during the first quarter of 2010. These materials have been filed with the Securities and Exchange Commission and are also available at uns.com.

UniSource Energy is a Tucson, Arizona-based company with consolidated assets of approximately $3.6 billion. UniSource Energy’s primary subsidiaries include Tucson Electric Power, which serves more than 400,000 customers in southern Arizona, and UniSource Energy Services, provider of natural gas and electric service for about 236,000 customers in northern and southern Arizona. For more information about UniSource Energy and its subsidiaries, visit uns.com.

This release contains forward-looking information that involves risks and uncertainties, including factors that could affect UniSource Energy’s ability to reach the 2010 earnings guidance. These risks and uncertainties include, but are not limited to: state and federal regulatory and legislative decisions and actions; regional economic and market conditions which could affect customer growth and energy usage; weather variations affecting energy usage; the cost of debt and equity capital and access to capital markets; the performance of the stock market and changing interest rate environment, which affect the value of the company’s pension and other postretirement benefit plan assets and the related contribution requirements and expense; unexpected increases in O&M expense; resolution of pending litigation matters; changes in accounting standards; changes in critical accounting estimates; the ongoing restructuring of the electric industry; changes to long-term contracts; the cost of fuel and power supplies; performance of TEP’s generating plants; and other factors listed in UniSource Energy’s Form 10-K and 10-Q filings with the Securities and Exchange Commission. The preceding factors may cause future results to differ materially from outcomes currently expected by UniSource Energy.

5

UNISOURCE ENERGY 2010 RESULTS

UniSource Energy Corporation
Comparative Condensed Consolidated Statements of Income	Three Months Ended
(in thousands of dollars, except per share amounts)	March 31,						Increase / (Decrease)
(UNAUDITED)	2010			2009			Amount			Percent
Operating Revenues
Electric Retail Sales	$	204,746		$	201,352		$	3,394			1.7
Electric Wholesale Sales		36,145			35,295			850			2.4
California Power Exchange (CPX) Provision for Wholesale Refunds		(2,970	)		—			(2,970	)		N/M
Gas Revenue		55,781			58,303			(2,522	)		(4.3	)
Other Revenues		24,200			16,907			7,293			43.1
Total Operating Revenues		317,902			311,857			6,045			1.9
Operating Expenses
Fuel		60,448			54,817			5,631			10.3
Purchased Energy		81,886			76,695			5,191			6.8
Transmission		2,430			2,259			171			7.6
Increase (Decrease) to reflect PPFAC/PGA Recovery Treatment		(12,631	)		6,702			(19,333	)		N/M
Total Fuel and Purchased Energy		132,133			140,473			(8,340	)		(5.9	)
Other Operations and Maintenance		82,908			84,954			(2,046	)		(2.4	)
Depreciation		31,099			33,602			(2,503	)		(7.4	)
Amortization		6,572			7,073			(501	)		(7.1	)
Taxes Other Than Income Taxes		12,273			12,455			(182	)		(1.5	)
Total Operating Expenses		264,985			278,557			(13,572	)		(4.9	)
Operating Income		52,917			33,300			19,617			58.9
Other Income (Deductions)
Interest Income		1,927			2,098			(171	)		(8.2	)
Other Income		6,059			1,458			4,601			N/M
Other Expense		(844	)		(1,484	)		640			43.1
Total Other Income (Deductions)		7,142			2,072			5,070			N/M
Interest Expense
Long-Term Debt		15,240			14,644			596			4.1
Capital Leases		12,083			12,809			(726	)		(5.7	)
Other Interest Expense Net of Interest Capitalized		329			(256	)		585			N/M
Total Interest Expense		27,652			27,197			455			1.7
Income Before Income Taxes		32,407			8,175			24,232			N/M
Income Tax Expense		12,435			3,256			9,179			N/M
Net Income	$	19,972		$	4,919		$	15,053			N/M
Weighted-average Shares of Common Stock Outstanding (000)		36,052			35,665			387			1.1
Basic Earnings per Share	$	0.55		$	0.14		$	0.41			N/M
Diluted Earnings per Share	$	0.52		$	0.14		$	0.38			N/M
Dividends Declared per Share	$	0.39		$	0.29		$	0.10			34.5

	Three Months Ended
Tucson Electric Power	March 31,				Increase / (Decrease)
Electric GWh Sales:	2010		2009		Amount		Percent
Retail Sales		1,929		1,929		0		0.0
Long-Term Wholesale Sales		288		275		13		4.7

N/M — Not Meaningful

Reclassifications have been made to prior periods to conform to the current period’s presentation.

6

TUCSON ELECTRIC POWER COMPANY 2010 RESULTS

TUCSON ELECTRIC POWER COMPANY
Comparative Condensed Consolidated Statements of Income (Loss)

	Three Months Ended
(in thousands of dollars)	March 31,						Increase / (Decrease)
(UNAUDITED)	2010			2009			Amount			Percent
Operating Revenues
Electric Retail Sales	$	167,419		$	157,764		$	9,655			6.1
Electric Wholesale Sales		40,043			37,758			2,285			6.1
California Power Exchange (CPX) Provision for Wholesale Refunds		(2,970	)		—			(2,970	)		N/M
Other Revenues		25,667			17,752			7,915			44.6
Total Operating Revenues		230,159			213,274			16,885			7.9
Operating Expenses
Fuel		58,351			51,440			6,911			13.4
Purchased Energy		23,735			23,042			693			3.0
Transmission		796			548			248			45.3
Increase (Decrease) to reflect PPFAC Recovery Treatment		(3,118	)		(368	)		(2,750	)		N/M
Total Fuel and Purchased Energy		79,764			74,662			5,102			6.8
Other Operations and Maintenance		72,023			74,734			(2,711	)		(3.6	)
Depreciation		24,077			26,757			(2,680	)		(10.0	)
Amortization		7,786			8,293			(507	)		(6.1	)
Taxes Other Than Income Taxes		10,006			10,256			(250	)		(2.4	)
Total Operating Expenses		193,656			194,702			(1,046	)		(0.5	)
Operating Income		36,503			18,572			17,931			96.5
Other Income (Deductions)
Interest Income		1,690			2,070			(380	)		(18.4	)
Other Income		1,199			1,331			(132	)		(9.9	)
Other Expense		(761	)		(1,128	)		367			32.5
Total Other Income (Deductions)		2,128			2,273			(145	)		(6.4	)
Interest Expense
Long-Term Debt		9,878			9,191			687			7.5
Capital Leases		12,081			12,805			(724	)		(5.7	)
Other Interest Expense Net of Interest Capitalized		(25	)		(285	)		260			91.2
Total Interest Expense		21,934			21,711			223			1.0
Income (Loss) Before Income Taxes		16,697			(866	)		17,563			N/M
Income Tax Expense (Benefit)		6,348			(313	)		6,661			N/M
Net Income (Loss)	$	10,349		$	(553	)	$	10,902			N/M

N/M — Not Meaningful
Reclassifications have been made to prior periods to conform to the current period’s presentation.

7

EX-99.2

Exhibit 99.2

UniSource Energy Corporation
Supplemental Earnings Information
April 30, 2010

TABLE OF CONTENTS
Safe Harbor and Non-GAAP Measures	1
Variance Explanation	2
Operations & Maintenance Components	3
TEP Operating Statistics	4
TEP Margin Revenues	5
UNS Electric Operating Statistics	6
UNS Gas Operating Statistics	7
Basic & Diluted Shares Outstanding	8

SAFE HARBOR AND NON-GAAP MEASURES

This document contains forward-looking information that involves risks and uncertainties, that include, but are not limited to: state and federal regulatory and legislative decisions and actions; regional economic and market conditions which could affect customer growth and energy usage; weather variations affecting energy usage; the cost of debt and equity capital and access to capital markets; the performance of the stock market and changing interest rate environment, which affect the value of the company’s pension and other postretirement benefit plan assets and the related contribution requirements and expense; unexpected increases in O&M expense; resolution of pending litigation matters; changes in accounting standards; changes in critical accounting estimates; the ongoing restructuring of the electric industry; changes to long-term contracts; the cost of fuel and power supplies; performance of TEP’s generating plants; and other factors listed in UniSource Energy’s Form 10-K and 10-Q filings with the Securities and Exchange Commission. The preceding factors may cause future results to differ materially from historical results or from outcomes currently expected by UniSource Energy. The forecast assumptions and estimates below are not intended to be a full list of factors which could cause UniSource Energy’s future results to differ from current expectations. Please refer to UniSource Energy’s SEC filings for more information regarding risks and other uncertainties that could cause current expectations to differ from future results.

The Company’s press releases and other communications may include certain non-Generally Accepted Accounting Principles (GAAP) financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements.

Non-GAAP financial measures utilized by the Company include presentations of revenues, operating expenses, operating income and earnings (loss) per share. The Company uses these non-GAAP measures to evaluate the operations of the Company. Certain non-GAAP financial measures utilized by the Company exclude: the impact of non-recurring items: the effect of accounting changes or adjustments; expenses that are reimbursed by third parties; and other items. The Company’s management believes that these non-GAAP financial measures provide useful information to investors by removing the effect of variances in GAAP reported results of operations that are not indicative of fundamental changes in the earnings or cash flow capacity of the Company’s operations. Management also believes that the presentation of the non-GAAP financial measures is largely consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare current non-GAAP measures with non-GAAP measures with respect to prior periods.

1

QUARTER OVER QUARTER EARNINGS VARIANCE EXPLANATION

1st Quarter 2009 UniSource Energy Net Income													$ 4.9
	1st Quarter						Change
	2010			2009			Pre-Tax			After Tax
TEP	-millions of dollars-
Retail Margin Revenues	$	108.4		$	107.6		$	0.8		$	0.5
L-T Wholesale Margin Revenues		8.1			7.7			0.4			0.2
Transmission Revenues		7.5			3.9			3.6			2.2
TEP Utility Gross Margin (Non-GAAP)		124.0			119.2		$	4.8			3.0
Loss related to the settlement of a dispute over transactions with the California Power Exchange		(3.0	)		0.0			(3.0	)		(1.9	)
Base O&M		54.1			63.1			9.0			5.6
Depreciation		24.1			26.8			(2.7	)		(1.7	)
Amortization		7.8			8.3			(0.5	)		(0.3	)
Operating synergies related to Springerville Unit 3&4		6.5			2.5			4.0			2.5
Other Line Item Changes		(5.0	)		(4.9	)		(0.1	)		(0.1	)
TEP Operating Income (GAAP)		36.5			18.6			17.9			11.1
Other Income		2.1			2.2			(0.1	)		(0.1	)
Total Interest Expense		21.9			21.7			0.2			0.1
Income Tax Expense (Benefit)		6.3			(0.3	)		6.6			6.6
TEP Net Income (Loss)	$	10.4		$	($0.6	)		NM			$11.0
Change in TEPNet Income													11.0
Other Business Segments
Gain recorded by UNS Electric related to the settlement of a dispute over transactions with the California Power Exchange		3.0			0.0			3.0			1.9
Other Net Income at UNS Electric		1.0			0.8			NM			0.2
UNS Gas Net Income		5.8			4.9			NM			0.9
After-Tax Income from MEH, UED and Consolidating Adj.		1.1			0.0			NM			1.1
Total Other Income and Consolidating Adjustments		10.9			5.7			NM			4.1
Change in UNS Electric, UNS Gas and Other													4.1
1st Quarter 2010 UniSource Energy Net Income													$20.0

2 — Variance Explanation

UNISOURCE ENERGY AND TEP O&M

	1st Quarter
UniSource Energy	2010			2009
O&M Components	-millions of dollars-
TEP Base O&M (Non-GAAP)	$	54.1		$	63.1
UNS Gas O&M		6.2			6.2
UNS Electric O&M		4.8			4.7
Consolidating Adjustments & Other		(1.9	)		(1.5	)
UniSource Energy Base O&M (Non-GAAP)	$	63.2		$	72.5
Reimbursed O&M Related to Springerville Units 3 and 4		12.7			9.2
O&M Related to Customer-funded Renewable Energy and DSM Programs		7.0			3.3
UniSource Energy O&M (GAAP)	$	82.9		$	85.0

	1st Quarter
TEP	2010		2009
O&M Components	-millions of dollars-
Wages, A&G, Other	$	34.2	$	36.0
Generating Plant Maintenance Expense		16.4		22.6
Pension and Postretirement Benefits Expense		3.5		4.5
TEP Base O&M (Non-GAAP)	$	54.1	$	63.1
Reimbursed O&M Related to Springerville Units 3 and 4		12.7		9.2
O&M Related to Customer-funded Renewable Energy and DSM Programs		5.2		2.4
TEP O&M (GAAP)	$	72.0	$	74.7

3 — O&M

TEP — OPERATING STATISTICS

	3 Months Ended Mar. 31
	2010			2009			Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential		365,627			364,825			802			0.2	%
Commercial		35,814			35,502			312			0.9	%
Industrial		632			636			(4	)		-0.6	%
Mining		2			2			—			0.0	%
Other		61			61			—			0.0	%
Total		402,136			401,026			1,110			0.3	%
RETAIL SALES — MWH
Residential		754,738			727,177			27,561			3.8	%
Commercial		394,607			403,863			(9,256	)		-2.3	%
Industrial		473,771			489,508			(15,737	)		-3.2	%
Mining		261,037			258,694			2,343			0.9	%
Other		44,659			50,016			(5,357	)		-10.7	%
Total		1,928,812			1,929,258			(446	)		0.0	%
RETAIL USAGE — KWH/CUSTOMER
Residential		2,064			1,993			71			3.6	%
Commercial		11,018			11,376			(358	)		-3.1	%
Industrial		749,638			769,667			(20,029	)		-2.6	%
Mining		130,518,500			129,347,000			1,171,500			0.9	%
Other		732,115			819,934			(87,820	)		-10.7	%
Total		4,796			4,811			(14	)		-0.3	%
WEATHER — HEATING DEGREE DAYS
Actual		881			646			235			36.4	%
10-Year Average		805			805
% Change Actual vs. 10-Year Avg.		9.4	%		-19.8	%
ENERGY MARKET INDICATORS
Avg. Wholesale Power Prices
Palo Verde Index — $/MWh
On Peak	$	45.19		$	33.75		$	11.44			33.9	%
Off Peak	$	34.77		$	25.79		$	8.98			34.8	%
Avg. Natural Gas Prices
Permian Index — $/MMBtu	$	5.26		$	3.57		$	1.69			47.3	%

4 — TEP Operating Statistics

TEP — RETAIL AND WHOLESALE MARGIN REVENUES

	3 Months Ended Mar. 31
	2010			2009			Incr (Decr)			% Change
RETAIL REVENUES — $ MILLIONS
Margin Revenues:
Residential	$	47.3		$	45.3			2.0			4.4	%
Commercial		30.6			30.3			0.3			1.0	%
Industrial		21.0			22.6			(1.6	)		-7.1	%
Mining		7.3			7.1			0.2			2.8	%
Other		2.2			2.3			(0.1	)		-4.3	%
Total	$	108.4		$	107.6		$	0.8			0.7	%
DSM / REST		8.0			2.4			5.6		NM
Fuel Revenues:
Recovered from Customers		51.0			47.5			3.5			7.4	%
Total Retail Revenues	$	167.4		$	157.5		$	9.9			6.3	%
RETAIL REVENUES — CENTS / KWH
Margin Revenues:
Residential		6.27			6.23			0.04			0.6	%
Commercial		7.75			7.50			0.25			3.4	%
Industrial		4.43			4.62			(0.18	)		-4.0	%
Mining		2.80			2.74			0.05			1.9	%
Other		4.93			4.60			0.33			7.1	%
Total		5.62			5.58			0.04			0.8	%
DSM / REST		0.41			0.12			0.29		NM
Fuel Revenues:
Recovered from Customers		2.64			2.46			0.18			7.4	%
Total Retail Revenues		8.68			8.16			0.52			6.3	%
LONG-TERM WHOLESALE MARGIN — $ MILLIONS
Long-term Wholesale Revenues	$	14.9		$	14.1			0.8			5.7	%
Fuel and Purchased Power Expense		(6.8	)		(6.4	)		(0.4	)		6.2	%
Net	$	8.1		$	7.7			0.4			5.2	%

5 — TEP Margin Revenues

UNS ELECTRIC — OPERATING STATISTICS

	Three Months Ended March 31,
	2010			2009			Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential		80,023			79,408			615			0.8	%
Commercial		10,336			10,344			(8	)		-0.1	%
Industrial		24			18			6			33.3	%
Mining		1			1			—			0.0	%
Other		266			261			5			1.9	%
Total		90,650			90,032			618			0.7	%
RETAIL SALES — MWH
Residential		175,345			166,570			8,775			5.3	%
Commercial		131,308			133,650			(2,342	)		-1.8	%
Industrial		51,834			38,357			13,477			35.1	%
Mining		46,852			33,927			12,925			38.1	%
Other		566			612			(46	)		-7.5	%
Total		405,905			373,116			32,789			8.8	%
RETAIL USAGE — KWH/CUSTOMER
Residential		2,191			2,098			94			4.5	%
Commercial		12,704			12,921			(217	)		-1.7	%
Industrial		2,159,750			2,130,944			28,806			1.4	%
Mining		46,852,000			33,927,000			12,925,000			38.1	%
Other		2,128			2,345			(217	)		-9.3	%
Total		4,478			4,144			333			8.0	%
RETAIL REVENUES — MILLIONS
Margin Revenues:
Residential	$	4.5		$	4.3			0.2			4.7	%
Commercial		5.0			5.0			(0.0	)		-0.4	%
Industrial		1.7			1.5			0.3			20.2	%
Mining		1.0			0.8			0.2			27.3	%
Other		0.1			0.1			0.0			3.6	%
Total Margin Revenues	$	12.3		$	11.6		$	0.7			5.9	%
DSM / REST		1.6			0.7			0.9		NM
Fuel Revenues:
Recovered from Customers		23.4			31.3			(7.9	)		-25.2	%
Total Retail Revenues	$	37.3		$	43.6			($6.3	)		-14.4	%
WEATHER — HEATING DEGREE DAYS
Actual		3,570			3,121			449			14.4	%
10-Year Average		3,389			3,364
% Change Actual vs. 10-Year Avg.		5.3	%		-7.2	%

6 — UNS Electric

UNS GAS — OPERATING STATISTICS

	Three Months Ended March 31,
	2010			2009			Incr (Decr)			% Change
AVG. GAS CUSTOMERS
Residential		133,715			133,212			503			0.4	%
Commercial		11,405			11,526			(121	)		-1.0	%
Industrial		23			24			(1	)		-4.2	%
All Other		1,107			1,101			6			0.5	%
Total		146,250			145,863			387			0.3	%
RETAIL SALES — THOUSANDS OF THERMS
Residential		33,401			29,569			3,832			13.0	%
Commercial		11,445			10,374			1,071			10.3	%
Industrial		692			659			33			5.0	%
All Other		10,411			11,393			(982	)		-8.6	%
Total		55,950			51,996			3,953			7.6	%
RETAIL USAGE — THERMS/CUSTOMER
Residential		250			222			28			12.5	%
Commercial		1,004			900			103			11.5	%
Industrial		30,103			27,474			2,629			9.6	%
All Other		9,404			10,348			(944	)		-9.1	%
Total		383			356			26			7.3	%
RETAIL REVENUES — MILLIONS
Margin Revenues:
Residential	$	14.1		$	12.9			1.2			9.3	%
Commercial		3.4			3.2			0.3			8.8	%
All Other		0.9			0.8			0.1			7.7	%
Total Margin Revenues	$	18.4		$	16.8		$	1.5			9.1	%
DSM Revenues		0.2			0.2			0.1			58.9	%
Transport/NSP Revenues		5.1			5.3			(0.1	)		-2.0	%
Fuel Revenues:
Recovered from Customers		32.9			37.2			(4.2	)		-11.4	%
Total Gas Revenues	$	56.7		$	59.4			($2.7	)		-4.6	%
WEATHER — HEATING DEGREE DAYS
Actual		10,356			9,254			1,102			11.9	%
10-Year Average		9,885			9,901
% Change Actual vs. 10-Year Avg.		4.8	%		-6.5	%

7 — UNS Gas

BASIC AND DILUTED SHARES OUTSTANDING

	Three Months Ended
	March 31,
	2010		2009
	-Thousands of Dollars-
Numerator:
Net Income	$	19.972	$	4.919
Income from Assumed Conversion of Convertible Senior Notes		1,097		—
Adjusted Numerator	$	21,069	$	4,919
Denominator:
Weighted-average Shares of Common Stock Outstanding:
Common Shares Issued		35,850		35,557
Fully Vested Deferred Stock Units		107		108
Participating Securities		95		—
Total Weighted-average Shares of Common Stock Outstanding and Participating Securities — Basic		36.052		35,665
Effect of Dilutive Securities:
Convertible Senior Notes		4,140		—
Options and Stock Issuable Under Employee Benefit Plans and the Directors’ Plans		481		540
Total Shares — Diluted		40,673		36,205

Stock options to purchase 234,000 and 395,000 shares of Common Stock were outstanding during the three months ended March 31, 2010 and 2009, respectively, but were not included in the computation of diluted EPS because the stock options’ exercise prices were greater than the average market price of the Common Stock.

Additionally, for the three months ended March 31, 2009, 4 million potentially dilutive shares from the conversion of convertible senior notes, and after-tax interest expense of $1 million were not included in the computation of diluted EPS because to do so would be anti-dilutive.

8 — Diluted Share Count

EX-99.3

Exhibit 99.3

1st Quarter 2010 Earnings April 30, 2010 UniSource Energy Corporation

UniSource Energy Safe Harbor Safe Harbor and Non-GAAP Measures This document contains forward-looking information that involves risks and uncertainties, that include, but are not limited to: state and federal regulatory and legislative decisions and actions; regional economic and market conditions which could affect customer growth and energy usage; weather variations affecting energy usage; the cost of debt and equity capital and access to capital markets; the performance of the stock market and changing interest rate environment, which affect the value of the company's pension and other postretirement benefit plan assets and the related contribution requirements and expense; unexpected increases in O&M expense; resolution of pending litigation matters; changes in accounting standards; changes in critical accounting estimates; the ongoing restructuring of the electric industry; changes to long-term contracts; the cost of fuel and power supplies; performance of TEP's generating plants; and other factors listed in UniSource Energy's Form 10-K and 10-Q filings with the Securities and Exchange Commission. The preceding factors may cause future results to differ materially from historical results or from outcomes currently expected by UniSource Energy. The Company's press releases and other communications may include certain non-Generally Accepted Accounting Principles (GAAP) financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company's financial statements. Non-GAAP financial measures utilized by the Company include presentations of revenues, operating expenses, operating income and earnings (loss) per share. The Company uses these non-GAAP measures to evaluate the operations of the Company. Certain non-GAAP financial measures utilized by the Company exclude: the impact of non-recurring items: the effect of accounting changes or adjustments; expenses that are reimbursed by third parties; and other items. The Company's management believes that these non-GAAP financial measures provide useful information to investors by removing the effect of variances in GAAP reported results of operations that are not indicative of fundamental changes in the earnings or cash flow capacity of the Company's operations. Management also believes that the presentation of the non-GAAP financial measures is largely consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare current non- GAAP measures with non-GAAP measures with respect to prior periods. 1

UniSource Energy Earnings Walk 2 Q1 2009 Diluted EPS UNS Base O&M UNS Retail Gross Margin TEP Springerville 3 & 4 Benefits TEP Temporary Transmission Revenues UNS Depreciation & Amortization Other Q1 2010 Diluted EPS Key Quarter over Quarter Earnings Drivers 1st Quarter 2010 vs. 1st Quarter 2009

TEP 1st Quarter Sales 3 3 1,874 2,012 2,027 1,929 1,929