The 'BB+' corporate credit rating on Tucson Electric Power Co. (TEP) reflects the consolidated creditworthiness of parent UniSource Energy Corp. (UniSource), which Standard&Poor's Ratings Services does not rate. TEP is by far UniSource's largest holding, generating about 96% of the parent's cash flows from operations in 2008. TEP is a vertically integrated electric utility in Arizona, serving 402,000 customers in Tucson and the southeast of the state. UniSource's other holdings consist primarily of regulated utilities UNS Electric and UNS Gas, which serve portions of northern and southeastern Arizona. (UniSource owns these companies through an intermediate holding company, UniSource Energy Services Inc.) UniSource's other holdings are small, and we do not consider them material to consolidated credit quality. The
