The ratings on Tucson Electric Power Co. (TEP), a wholly owned subsidiary of UniSource Energy Corp. (unrated) reflect the highly leveraged financial profile and the moderate risk business profile of this regulated, vertically integrated electric utility that serves areas in and around Tucson, Ariz. TEP's business risk profile is rated '6' on Standard&Poor's 10-point scale. (Business profiles are categorized from '1' (strong) to '10' (weak). TEP is by far the most important of the three subsidiaries in the UniSource companies. In 2004, TEP accounted for roughly $210 million of the $230 million of UniSource's funds from operations (FFO). UniSource Energy Services Inc. (UES), the intermediate holding company for two smaller regulated utilities, UNS Gas Inc., and UNS Electric
