Utility Plant and Jointly-Owned Facilities (Tables)

12 Months Ended

Dec. 31, 2012

Utility Plant in Service by Company and Major Class

The following table shows Utility Plant in Service by major class:

	UNS Energy				TEP
	December 31,				December 31,
	2012		2011		2012		2011
	-Millions of Dollars-
Plant in Service:
Electric Generation Plant	$	1,932	$	1,879	$	1,847	$	1,795
Electric Transmission Plant		842		810		796		766
Electric Distribution Plant		1,495		1,453		1,271		1,234
Gas Distribution Plant		240		233		—		—
Gas Transmission Plant		18		18		—		—
General Plant		347		331		309		302
Intangible Plant—Software Costs (1) (2)		124		122		123		121
Intangible Plant—Other		5		5		—		—
Electric Plant Held for Future Use		3		5		2		4
Total Plant in Service	$	5,006	$	4,856	$	4,348	$	4,222
Utility Plant under Capital Leases	$	583	$	583	$	583	$	583

⁽¹⁾  Unamortized computer software costs were $36 million for UNS Energy and $35 million for TEP as of December 31, 2012, and $43 million for UNS Energy and $42 million for TEP as of December 31, 2011.

⁽²⁾  The amortization of computer software costs in UNS Energy’s income statements was $13 million in 2012, $10 million in 2011, and $9 million in 2010. The amortization of computer software costs in TEP’s income statements before intercompany allocations was $13 million in 2012, $10 million in 2011, and $9 million in 2010.

Amount of Lease Expense Incurred for TEP's Generation-Related Capital Leases

The following table shows the amount of lease expense incurred for TEP’s generation-related capital leases:

	Years Ended December 31,
	2012		2011		2010
	-Millions of Dollars-
Lease Expense:
Interest Expense – Included in:
Capital Leases	$	34	$	40	$	47
Operating Expenses – Fuel		3		4		4
Other Expense		—		1		2
Amortization of Capital Lease Assets – Included in:
Operating Expenses – Fuel		4		3		3
Operating Expenses – Amortization		14		14		14
Total Lease Expense	$	55	$	62	$	70

Depreciable Lives of Utility Plant in Service

The depreciable lives as of December 31, 2012, were as follows:

	TEP		UNS Gas and UNS Electric
Major Class of Utility Plant in Service
Electric Generation Plant		11-57 years		38-49 years
Electric Transmission Plant		20-60 years		20-50 years
Electric Distribution Plant		28-60 years		23-50 years
Gas Distribution Plant		n/a		30-55 years
Gas Transmission Plant		n/a		30-65 years
General Plant		5-31 years		5-40 years
Intangible Plant		3-19 years		3-32 years

TEP's Interests in Jointly-Owned Generating Stations and Transmission Systems

At December 31, 2012, TEP’s interests in jointly-owned generating stations and transmission systems were as follows:

	Ownership Percentage	Plant in Service		Construction Work in Progress		Accumulated Depreciation		Net Book Value
	-Millions of Dollars-
San Juan Units 1 and 2	50.0%	$	443	$	7	$	220	$	230
Navajo Units 1, 2, and 3	7.5		148		1		106		43
Four Corners Units 4 and 5	7.0		97		2		73		26
Luna Energy Facility	33.3		53		—		—		53
Transmission Facilities	7.5 to 95.0		328		22		186		164
Total		$	1,069	$	32	$	585	$	516

Schedule of Asset Retirement Obligations

The following table reconciles the beginning and ending aggregate carrying amounts of ARO accruals on the balance sheets:

	UNS Energy and TEP
	December 31,
	2012		2011
	-Millions of Dollars-
Beginning Balance	$	13	$	4
Liabilities Incurred		—		1
Liabilities Settled		—		—
Accretion Expense		1		—
Revision to Estimated Cash Flows		—		8
Ending Balance	$	14	$	13