Tucson Electric Power Co. has benefitted from an improved regulatory relationship with the Arizona Corporation Commission (ACC), including a rate case settlement reached in 2013. We are raising the corporate credit rating on Tucson Electric to 'BBB' from 'BB+'. Because the rating is now investment grade, we now will not provide a recovery rating. We now rate the company's senior unsecured notes 'BBB'. We believe the company's financial risk profile will continue to improve due to stabilized operations and maintenance (O&M) costs and rate relief in 2013 and beyond. The stable outlook reflects our expectation that the company will continue to demonstrate financial measures that are consistent with the current rating category, and that it will continue to manage regulatory
