Tucson Electric Power 8-K Unisource Energy Reports First Quarter 2010 Earnings, Maintains 2010 Earnings Guidance Range

Exhibit 99.2

UniSource Energy Corporation
Supplemental Earnings Information
April 30, 2010

TABLE OF CONTENTS
Safe Harbor and Non-GAAP Measures	1
Variance Explanation	2
Operations & Maintenance Components	3
TEP Operating Statistics	4
TEP Margin Revenues	5
UNS Electric Operating Statistics	6
UNS Gas Operating Statistics	7
Basic & Diluted Shares Outstanding	8

SAFE HARBOR AND NON-GAAP MEASURES

This document contains forward-looking information that involves risks and uncertainties, that include, but are not limited to: state and federal regulatory and legislative decisions and actions; regional economic and market conditions which could affect customer growth and energy usage; weather variations affecting energy usage; the cost of debt and equity capital and access to capital markets; the performance of the stock market and changing interest rate environment, which affect the value of the company’s pension and other postretirement benefit plan assets and the related contribution requirements and expense; unexpected increases in O&M expense; resolution of pending litigation matters; changes in accounting standards; changes in critical accounting estimates; the ongoing restructuring of the electric industry; changes to long-term contracts; the cost of fuel and power supplies; performance of TEP’s generating plants; and other factors listed in UniSource Energy’s Form 10-K and 10-Q filings with the Securities and Exchange Commission. The preceding factors may cause future results to differ materially from historical results or from outcomes currently expected by UniSource Energy. The forecast assumptions and estimates below are not intended to be a full list of factors which could cause UniSource Energy’s future results to differ from current expectations. Please refer to UniSource Energy’s SEC filings for more information regarding risks and other uncertainties that could cause current expectations to differ from future results.

The Company’s press releases and other communications may include certain non-Generally Accepted Accounting Principles (GAAP) financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements.

Non-GAAP financial measures utilized by the Company include presentations of revenues, operating expenses, operating income and earnings (loss) per share. The Company uses these non-GAAP measures to evaluate the operations of the Company. Certain non-GAAP financial measures utilized by the Company exclude: the impact of non-recurring items: the effect of accounting changes or adjustments; expenses that are reimbursed by third parties; and other items. The Company’s management believes that these non-GAAP financial measures provide useful information to investors by removing the effect of variances in GAAP reported results of operations that are not indicative of fundamental changes in the earnings or cash flow capacity of the Company’s operations. Management also believes that the presentation of the non-GAAP financial measures is largely consistent with its past practice, as well as industry practice in general, and will enable investors and analysts to compare current non-GAAP measures with non-GAAP measures with respect to prior periods.

1

QUARTER OVER QUARTER EARNINGS VARIANCE EXPLANATION

1st Quarter 2009 UniSource Energy Net Income													$ 4.9
	1st Quarter						Change
	2010			2009			Pre-Tax			After Tax
TEP	-millions of dollars-
Retail Margin Revenues	$	108.4		$	107.6		$	0.8		$	0.5
L-T Wholesale Margin Revenues		8.1			7.7			0.4			0.2
Transmission Revenues		7.5			3.9			3.6			2.2
TEP Utility Gross Margin (Non-GAAP)		124.0			119.2		$	4.8			3.0
Loss related to the settlement of a dispute over transactions with the California Power Exchange		(3.0	)		0.0			(3.0	)		(1.9	)
Base O&M		54.1			63.1			9.0			5.6
Depreciation		24.1			26.8			(2.7	)		(1.7	)
Amortization		7.8			8.3			(0.5	)		(0.3	)
Operating synergies related to Springerville Unit 3&4		6.5			2.5			4.0			2.5
Other Line Item Changes		(5.0	)		(4.9	)		(0.1	)		(0.1	)
TEP Operating Income (GAAP)		36.5			18.6			17.9			11.1
Other Income		2.1			2.2			(0.1	)		(0.1	)
Total Interest Expense		21.9			21.7			0.2			0.1
Income Tax Expense (Benefit)		6.3			(0.3	)		6.6			6.6
TEP Net Income (Loss)	$	10.4		$	($0.6	)		NM			$11.0
Change in TEPNet Income													11.0
Other Business Segments
Gain recorded by UNS Electric related to the settlement of a dispute over transactions with the California Power Exchange		3.0			0.0			3.0			1.9
Other Net Income at UNS Electric		1.0			0.8			NM			0.2
UNS Gas Net Income		5.8			4.9			NM			0.9
After-Tax Income from MEH, UED and Consolidating Adj.		1.1			0.0			NM			1.1
Total Other Income and Consolidating Adjustments		10.9			5.7			NM			4.1
Change in UNS Electric, UNS Gas and Other													4.1
1st Quarter 2010 UniSource Energy Net Income													$20.0

2 — Variance Explanation

UNISOURCE ENERGY AND TEP O&M

	1st Quarter
UniSource Energy	2010			2009
O&M Components	-millions of dollars-
TEP Base O&M (Non-GAAP)	$	54.1		$	63.1
UNS Gas O&M		6.2			6.2
UNS Electric O&M		4.8			4.7
Consolidating Adjustments & Other		(1.9	)		(1.5	)
UniSource Energy Base O&M (Non-GAAP)	$	63.2		$	72.5
Reimbursed O&M Related to Springerville Units 3 and 4		12.7			9.2
O&M Related to Customer-funded Renewable Energy and DSM Programs		7.0			3.3
UniSource Energy O&M (GAAP)	$	82.9		$	85.0

	1st Quarter
TEP	2010		2009
O&M Components	-millions of dollars-
Wages, A&G, Other	$	34.2	$	36.0
Generating Plant Maintenance Expense		16.4		22.6
Pension and Postretirement Benefits Expense		3.5		4.5
TEP Base O&M (Non-GAAP)	$	54.1	$	63.1
Reimbursed O&M Related to Springerville Units 3 and 4		12.7		9.2
O&M Related to Customer-funded Renewable Energy and DSM Programs		5.2		2.4
TEP O&M (GAAP)	$	72.0	$	74.7

3 — O&M

TEP — OPERATING STATISTICS

	3 Months Ended Mar. 31
	2010			2009			Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential		365,627			364,825			802			0.2	%
Commercial		35,814			35,502			312			0.9	%
Industrial		632			636			(4	)		-0.6	%
Mining		2			2			—			0.0	%
Other		61			61			—			0.0	%
Total		402,136			401,026			1,110			0.3	%
RETAIL SALES — MWH
Residential		754,738			727,177			27,561			3.8	%
Commercial		394,607			403,863			(9,256	)		-2.3	%
Industrial		473,771			489,508			(15,737	)		-3.2	%
Mining		261,037			258,694			2,343			0.9	%
Other		44,659			50,016			(5,357	)		-10.7	%
Total		1,928,812			1,929,258			(446	)		0.0	%
RETAIL USAGE — KWH/CUSTOMER
Residential		2,064			1,993			71			3.6	%
Commercial		11,018			11,376			(358	)		-3.1	%
Industrial		749,638			769,667			(20,029	)		-2.6	%
Mining		130,518,500			129,347,000			1,171,500			0.9	%
Other		732,115			819,934			(87,820	)		-10.7	%
Total		4,796			4,811			(14	)		-0.3	%
WEATHER — HEATING DEGREE DAYS
Actual		881			646			235			36.4	%
10-Year Average		805			805
% Change Actual vs. 10-Year Avg.		9.4	%		-19.8	%
ENERGY MARKET INDICATORS
Avg. Wholesale Power Prices
Palo Verde Index — $/MWh
On Peak	$	45.19		$	33.75		$	11.44			33.9	%
Off Peak	$	34.77		$	25.79		$	8.98			34.8	%
Avg. Natural Gas Prices
Permian Index — $/MMBtu	$	5.26		$	3.57		$	1.69			47.3	%

4 — TEP Operating Statistics

TEP — RETAIL AND WHOLESALE MARGIN REVENUES

	3 Months Ended Mar. 31
	2010			2009			Incr (Decr)			% Change
RETAIL REVENUES — $ MILLIONS
Margin Revenues:
Residential	$	47.3		$	45.3			2.0			4.4	%
Commercial		30.6			30.3			0.3			1.0	%
Industrial		21.0			22.6			(1.6	)		-7.1	%
Mining		7.3			7.1			0.2			2.8	%
Other		2.2			2.3			(0.1	)		-4.3	%
Total	$	108.4		$	107.6		$	0.8			0.7	%
DSM / REST		8.0			2.4			5.6		NM
Fuel Revenues:
Recovered from Customers		51.0			47.5			3.5			7.4	%
Total Retail Revenues	$	167.4		$	157.5		$	9.9			6.3	%
RETAIL REVENUES — CENTS / KWH
Margin Revenues:
Residential		6.27			6.23			0.04			0.6	%
Commercial		7.75			7.50			0.25			3.4	%
Industrial		4.43			4.62			(0.18	)		-4.0	%
Mining		2.80			2.74			0.05			1.9	%
Other		4.93			4.60			0.33			7.1	%
Total		5.62			5.58			0.04			0.8	%
DSM / REST		0.41			0.12			0.29		NM
Fuel Revenues:
Recovered from Customers		2.64			2.46			0.18			7.4	%
Total Retail Revenues		8.68			8.16			0.52			6.3	%
LONG-TERM WHOLESALE MARGIN — $ MILLIONS
Long-term Wholesale Revenues	$	14.9		$	14.1			0.8			5.7	%
Fuel and Purchased Power Expense		(6.8	)		(6.4	)		(0.4	)		6.2	%
Net	$	8.1		$	7.7			0.4			5.2	%

5 — TEP Margin Revenues

UNS ELECTRIC — OPERATING STATISTICS

	Three Months Ended March 31,
	2010			2009			Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential		80,023			79,408			615			0.8	%
Commercial		10,336			10,344			(8	)		-0.1	%
Industrial		24			18			6			33.3	%
Mining		1			1			—			0.0	%
Other		266			261			5			1.9	%
Total		90,650			90,032			618			0.7	%
RETAIL SALES — MWH
Residential		175,345			166,570			8,775			5.3	%
Commercial		131,308			133,650			(2,342	)		-1.8	%
Industrial		51,834			38,357			13,477			35.1	%
Mining		46,852			33,927			12,925			38.1	%
Other		566			612			(46	)		-7.5	%
Total		405,905			373,116			32,789			8.8	%
RETAIL USAGE — KWH/CUSTOMER
Residential		2,191			2,098			94			4.5	%
Commercial		12,704			12,921			(217	)		-1.7	%
Industrial		2,159,750			2,130,944			28,806			1.4	%
Mining		46,852,000			33,927,000			12,925,000			38.1	%
Other		2,128			2,345			(217	)		-9.3	%
Total		4,478			4,144			333			8.0	%
RETAIL REVENUES — MILLIONS
Margin Revenues:
Residential	$	4.5		$	4.3			0.2			4.7	%
Commercial		5.0			5.0			(0.0	)		-0.4	%
Industrial		1.7			1.5			0.3			20.2	%
Mining		1.0			0.8			0.2			27.3	%
Other		0.1			0.1			0.0			3.6	%
Total Margin Revenues	$	12.3		$	11.6		$	0.7			5.9	%
DSM / REST		1.6			0.7			0.9		NM
Fuel Revenues:
Recovered from Customers		23.4			31.3			(7.9	)		-25.2	%
Total Retail Revenues	$	37.3		$	43.6			($6.3	)		-14.4	%
WEATHER — HEATING DEGREE DAYS
Actual		3,570			3,121			449			14.4	%
10-Year Average		3,389			3,364
% Change Actual vs. 10-Year Avg.		5.3	%		-7.2	%

6 — UNS Electric

UNS GAS — OPERATING STATISTICS

	Three Months Ended March 31,
	2010			2009			Incr (Decr)			% Change
AVG. GAS CUSTOMERS
Residential		133,715			133,212			503			0.4	%
Commercial		11,405			11,526			(121	)		-1.0	%
Industrial		23			24			(1	)		-4.2	%
All Other		1,107			1,101			6			0.5	%
Total		146,250			145,863			387			0.3	%
RETAIL SALES — THOUSANDS OF THERMS
Residential		33,401			29,569			3,832			13.0	%
Commercial		11,445			10,374			1,071			10.3	%
Industrial		692			659			33			5.0	%
All Other		10,411			11,393			(982	)		-8.6	%
Total		55,950			51,996			3,953			7.6	%
RETAIL USAGE — THERMS/CUSTOMER
Residential		250			222			28			12.5	%
Commercial		1,004			900			103			11.5	%
Industrial		30,103			27,474			2,629			9.6	%
All Other		9,404			10,348			(944	)		-9.1	%
Total		383			356			26			7.3	%
RETAIL REVENUES — MILLIONS
Margin Revenues:
Residential	$	14.1		$	12.9			1.2			9.3	%
Commercial		3.4			3.2			0.3			8.8	%
All Other		0.9			0.8			0.1			7.7	%
Total Margin Revenues	$	18.4		$	16.8		$	1.5			9.1	%
DSM Revenues		0.2			0.2			0.1			58.9	%
Transport/NSP Revenues		5.1			5.3			(0.1	)		-2.0	%
Fuel Revenues:
Recovered from Customers		32.9			37.2			(4.2	)		-11.4	%
Total Gas Revenues	$	56.7		$	59.4			($2.7	)		-4.6	%
WEATHER — HEATING DEGREE DAYS
Actual		10,356			9,254			1,102			11.9	%
10-Year Average		9,885			9,901
% Change Actual vs. 10-Year Avg.		4.8	%		-6.5	%

7 — UNS Gas

BASIC AND DILUTED SHARES OUTSTANDING

	Three Months Ended
	March 31,
	2010		2009
	-Thousands of Dollars-
Numerator:
Net Income	$	19.972	$	4.919
Income from Assumed Conversion of Convertible Senior Notes		1,097		—
Adjusted Numerator	$	21,069	$	4,919
Denominator:
Weighted-average Shares of Common Stock Outstanding:
Common Shares Issued		35,850		35,557
Fully Vested Deferred Stock Units		107		108
Participating Securities		95		—
Total Weighted-average Shares of Common Stock Outstanding and Participating Securities — Basic		36.052		35,665
Effect of Dilutive Securities:
Convertible Senior Notes		4,140		—
Options and Stock Issuable Under Employee Benefit Plans and the Directors’ Plans		481		540
Total Shares — Diluted		40,673		36,205

Stock options to purchase 234,000 and 395,000 shares of Common Stock were outstanding during the three months ended March 31, 2010 and 2009, respectively, but were not included in the computation of diluted EPS because the stock options’ exercise prices were greater than the average market price of the Common Stock.

Additionally, for the three months ended March 31, 2009, 4 million potentially dilutive shares from the conversion of convertible senior notes, and after-tax interest expense of $1 million were not included in the computation of diluted EPS because to do so would be anti-dilutive.

8 — Diluted Share Count