Standard&Poor's Ratings Services affirmed its ratings of Tucson Electric Power (TEP). The outlook was revised to stable from negative as a result of financial results that while not strong for the rating, exceeded Standard&Poor's worst-case projections. Factors supporting the rating include: Cash flows sufficient to enable TEP to self-fund capital expenditures and consistently improve upon its leveraged capital structure; Owned capacity that is predominantly coal and is able to meet native loads in all but the very hottest hours of the summer, and no additional base load plant is needed in the foreseeable future; Continued growth of TEP's service territory. In 2005, TEP customer growth was 2.5%, and energy sales increased 4%. Average annual customer growth
