Tucson Electric Power 8-K Unisource Energy Reports First Quarter 2009 Earnings, Maintains 2009 Earnings Guidance Range

Exhibit 99.2

UniSource Energy Corporation
Supplemental Earnings & Outlook Information
May 4, 2009

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 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.

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QUARTER OVER QUARTER VARIANCE EXPLANATION

$ in millions	Pre-Tax			After Tax
2008 1st Quarter UNS Net Income					($2.6	)
TEP Q1 2009 vs. Q1 2008
Change in Revenues
Lower retail revenues (excluding REST and DSM revenues) due to economic conditions		(4.6	)		(2.7	)
Impact of mild weather residential revenues. Heating degree days were 20% below the 10-year average.		(0.6	)		(0.4	)
Change in PPFAC-Related Expenses
Lower fuel and purchased power expense (net of short-term wholesale revenues) resulting from a 16% decrease in generating output due to lower retail demand and over 50% decreases in the wholesale market prices for power and natural gas		12.4			7.5
Lower transmission expense		1.5			0.9
Deferred fuel and purchased power expense		0.4			0.2
Change in TEP Utility Gross Margin	$	9.1		$	5.5
Change in Other Operating Expenses
Higher Base O&M due primarily to an increase in plant outage and maintenance costs, as well as an increase in pension expense		(11.9	)		(7.1	)
Higher depreciation and amortization due to additions to plant in service, new depreciation rates for generation assets and amortization of regulatory assets resulting from the 2008 TEP Rate Order;		(3.8	)		(2.3	)
No Amortization of the 1999 Transition Recovery Asset (it became fully amortized in May 2008)		17.3			10.4
Lower interest expense net of change in other income		1.2			0.7
Other Changes		1.9			1.1
Change in TEP’s Other Operating Expenses	$	4.7		$	2.8
Total TEP Change Q1 2009 vs. Q1 2008	$	13.8		$	8.3
UNS Gas and UNS Electric Q1 2009 vs. Q1 2008:
Change in UNS Gas’ Net Income Q1 2009 vs. Q1 2008					(1.4	)
Mild weather
Change in UNS Electric’s Net Income Q1 2009 vs. 2009					0.3
Addition of a copper mining customer
Total UNS Gas and UNS Electric Change Q1 2009 vs Q1 2008					(1.1	)
Consolidating Adjustments and Other					0.3
Total Change in UNS Net Income					6.4
2009 1st Quarter UNS Net Income				$	4.9

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TEP UTILITY GROSS MARGIN RECONCILIATION

TEP - Three Months Ended March 31,	2009			2008
	-Millions of Dollars-
Retail Electric Revenues * (Excluding DSM & REST)	$	155.4		$	160.6
Long-Term Wholesale Electric Sales		14.1			15.4
Wholesale Transmission Revenues		3.9			2.7
Total	$	173.4		$	178.7
Less Fuel, Purchased Power and Transmission Expense
Fuel		51.4			69.2
Reimbursed Fuel		(1.0	)		(1.0	)
Purchased Power		23.0			32.2
Increase (Decrease) to Reflect PPFAC Recovery		(0.4	)		0.0
Transmission		0.5			2.0
Short-Term Wholesale Electric Sales		(19.6	)		(34.2	)
Net Fuel, Purchased Power and Transmission Expense		53.9			68.2
Utility Gross Margin (non-GAAP)	$	119.5		$	110.5
Reconciling Line Items to Operating Income
Other Revenue		17.8			14.4
REST & DSM Revenues		2.4			1.3
Other Operating Expenses (Income):
Reimbursed Fuel		1.0			1.0
Other Operations & Maintenance		74.7			58.6
Depreciation & Amortization		35.1			31.3
Amortization of 1999 Transition Recovery Asset		0.0			17.3
Taxes Other Than Income Taxes		10.3			10.5
Operating Income (GAAP)	$	18.6		$	7.5

* For the first three months of 2009, TEP’s Retail Electric Revenues, excluding components for fuel, DSM and REST, were $108 million

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UNISOURCE ENERGY AND TEP BASE O&M RECONCILIATION

UniSource Energy
O&M Components - Three Months Ended March 31,	2009			2008
	-Millions of Dollars-
TEP Base O&M (Non-GAAP)	$	63.1		$	51.2
UNS Gas O&M		6.3			6.4
UNS Electric O&M		5.4			4.6
Consolidating Adjustments & Other		(1.4	)		(2.1	)
UniSource Energy Base O&M (Non-GAAP)	$	73.4		$	60.1
Reimbursed O&M Related to Springerville Units 3 and 4		9.2			6.1
Expenses Related to Customer-funded Renewable Energy and DSM Programs		2.4			1.3
UniSource Energy O&M (GAAP)	$	85.0		$	67.5

TEP
O&M Components - Three Months Ended March 31,	2009		2008
	-Millions of Dollars-
A&G, T&D, Customer Service, Etc.	$	33.3	$	34.3
Generating Plant Maintenance Expense		25.8		15.7
Pension and Postretirement Benefits Expense		4.0		1.2
TEP Base O&M (Non-GAAP)	$	63.1	$	51.2
Reimbursed O&M Related to Springerville Units 3 and 4		9.2		6.1
Expenses Related to Customer-funded Renewable Energy and DSM Programs		2.4		1.3
TEP O&M (GAAP)	$	74.7	$	58.6

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TUCSON ELECTRIC POWER — OPERATING STATISTICS

	3 Months Ended March 31
	2009		2008		Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential		364,825		362,311		2,514			0.7	%
Commercial		35,502		34,887		615			1.8	%
Industrial		636		640		(4	)		-0.6	%
Mining		2		2		—			0.0	%
Other		61		61		—			0.0	%
Total		401,026		397,901		3,125			0.8	%
RETAIL SALES — MWH
Residential		727,177		772,839		(45,662	)		-5.9	%
Commercial		403,863		415,458		(11,595	)		-2.8	%
Industrial		489,508		517,481		(27,973	)		-5.4	%
Mining		258,694		266,453		(7,759	)		-2.9	%
Other		50,016		54,851		(4,835	)		-8.8	%
Total		1,929,258		2,027,082		(97,824	)		-4.8	%
RETAIL USAGE — KWH/CUSTOMER
Residential		1,993		2,133		(140	)		-6.6	%
Commercial		11,376		11,909		(533	)		-4.5	%
Industrial		769,667		808,564		(38,897	)		-4.8	%
Mining		129,347,000		133,226,500		(3,879,500	)		-2.9	%
Other		819,934		899,197		(79,262	)		-8.8	%
Total		4,811		5,094		(284	)		-5.6	%
RETAIL REVENUES — MILLIONS
Residential	$	64.4	$	64.7		($0.3	)		-0.5	%
Commercial		40.5		42.2		(1.7	)		-3.9	%
Industrial		33.9		36.2		(2.3	)		-6.4	%
Mining		13.1		13.4		(0.3	)		-2.3	%
Other		3.5		4.1		(0.6	)		-14.2	%
Total	$	155.4	$	160.6		($5.2	)		-3.2	%
DSM / REST		2.4		1.3		1.1			84.6	%
Total Retail Revenues		157.8		161.9		($4.1	)		-2.5	%

	3 Months Ended March 31
	2009			2008				Incr (Decr)			% Change
WEATHER NORMALIZED
RETAIL SALES — MWH
Residential		734,690			767,762				(33,072	)		-4.3	%
Commercial (1)		403,863			415,458				(11,595	)		-2.8	%
WEATHER NORMALIZED
RETAIL USAGE — KWH/CUSTOMER
Residential		2,014			2,118				(104	)		-4.9	%
Commercial		11,376			11,909				(533	)		-4.5	%
WEATHER NORMALIZED
RETAIL REVENUES — MILLIONS
Residential	$	65.0		$	64.6				0.4			0.6	%
Commercial	$	40.5		$	42.3				(1.8	)		-4.2	%
WEATHER — HEATING DEGREE DAYS
Actual		646			858				(212	)		-24.7	%
10-Year Average		805			811
% Change Actual vs. 10-Year Avg.		-19.8	%		5.8	%
ENERGY MARKET INDICATORS
Avg. Wholesale Power Prices
Palo Verde Index — $/MWh
On Peak	$	33.75		$	70.10		��		($36.35	)		-51.9	%
Off Peak	$	25.79		$	60.23				($34.44	)		-57.2	%
Avg. Natural Gas Prices
Permian Index — $/MMBtu	$	3.57		$	7.30				($3.73	)		-51.1	%

(1) We do not expect weather to impact commercial kWh sales until the summer months

5

UNS GAS — OPERATING STATISTICS

	3 Months Ended March 31
	2009		2008		Incr (Decr)			% Change
AVG. GAS CUSTOMERS
Residential		133,212		133,408		(196	)		-0.1	%
Commercial		11,526		11,617		(91	)		-0.8	%
All Other		1,108		1,105		3			0.3	%
Total		145,846		146,130		(284	)		-0.2	%
RETAIL SALES — THOUSANDS OF THERMS
Residential		29,569		34,795		(5,226	)		-15.0	%
Commercial		10,374		12,159		(1,785	)		-14.7	%
All Other		3,524		4,220		(696	)		-16.5	%
Total		43,467		51,174		(7,707	)		-15.1	%
RETAIL USAGE — THERMS/CUSTOMER
Residential		222		261		(39	)		-14.9	%
Commercial		900		1,047		(147	)		-14.0	%
RETAIL REVENUES — MILLIONS
Non-Fuel Revenues:
Residential	$	12.9	$	14.7		(1.8	)		-12.2	%
Commercial		3.2		3.7		(0.5	)		-13.5	%
All Other		0.7		0.9		(0.2	)		-22.2	%
Total	$	16.8	$	19.3		($2.5	)		-13.0	%
DSM Revenues		0.1		0.0		0.1			N/M
Fuel Revenues:
Recovered from Customers		37.1		40.2		(3.1	)		-7.7	%
Total Retail Revenues	$	54.0	$	59.5		($5.5	)		-9.2	%

	3 Months Ended March 31
	2009			2008			Incr (Decr)			% Change
WEATHER NORMALIZED
RETAIL SALES — THOUSANDS OF THERMS
Residential		31,369			33,297			(1,928	)		-5.8	%
Commercial		10,826			11,717			(891	)		-7.6	%
WEATHER NORMALIZED
RETAIL USAGE — THERMS/CUSTOMER
Residential		235			250			(14	)		-5.7	%
Commercial		939			1,009			(69	)		-6.9	%
WEATHER NORMALIZED
RETAIL REVENUES — MILLIONS
Residential	$	15.0		$	13.0			2			15.4	%
Commercial		3.7			3.2			0.5			15.6	%
WEATHER — HEATING DEGREE DAYS
Actual		11,127			12,627			(1,500	)		-11.9	%
10-Year Average		11,925			11,960
% Change Actual vs. 10-Year Avg.		-6.7	%		5.6	%

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UNS ELECTRIC — OPERATING STATISTICS

	3 Months Ended March 31
	2009		2008		Incr (Decr)			% Change
AVG. ELECTRIC CUSTOMERS
Residential		79,408		79,477		(69	)		-0.1	%
Commercial		10,345		10,309		36			0.3	%
All Other		280		271		9			3.3	%
Total		90,033		90,057		(24	)		0.0	%
RETAIL SALES — MWH
Residential		166,570		183,320		(16,750	)		-9.1	%
Commercial		133,650		134,541		(891	)		-0.7	%
Industrial		38,357		44,788		(6,431	)		-14.4	%
Mining		33,927		5,504		28,423		NM
Other		612		608		4			0.7	%
Total		373,116		368,761		4,355			1.2	%
RETAIL USAGE — KWH/CUSTOMER
Residential		2,098		2,307		(209	)		-9.1	%
Commercial		12,919		13,051		(132	)		-1.0	%
RETAIL REVENUES — MILLIONS
Non-Fuel Revenues:
Residential	$	4.3	$	5.8		(1.5	)		-25.9	%
Commercial		5.0		4.3		0.7			16.3	%
Industrial		1.9		0.5		1.4		NM
Mining		0.3		0.0		0.3		NM
Other		0.1		0.0		0.1		NM
Total	$	11.6	$	10.6	$	1.0			9.4	%
DSM / REST		0.7		0.1		0.6			N/M
Fuel Revenues:
Recovered from Customers		31.3		25.9		5.4			20.8	%
Total Retail Revenues	$	43.6	$	36.6	$	7.0			19.1	%

	3 Months Ended March 31
	2009			2008			Incr (Decr)			% Change
WEATHER NORMALIZED
RETAIL SALES — MWH
Residential		169,538			177,900			(8,362	)		-4.7	%
Commercial (1)		133,650			134,541			(891	)		-0.7	%
WEATHER NORMALIZED
RETAIL USAGE — KWH/CUSTOMER
Residential		2,135			2,238			(103	)		-4.6	%
Commercial (1)		12,919			13,051			(132	)		-1.0	%
WEATHER NORMALIZED
RETAIL NON-FUEL REVENUES — MILLIONS
Residential	$	4.6		$	5.3			(0.7	)		-13.2	%
Commercial		5.0			4.3			0.7			16.3	%
WEATHER — HEATING DEGREE DAYS
Actual		3,121			3,768			(647	)		-17.2	%
10-Year Average		3,364			3,368
% Change Actual vs. 10-Year Avg.		-7.2	%		11.9	%
WEATHER — COOLING DEGREE DAYS
Actual		77			88			(11	)		-12.5	%
10-Year Average		115			112
% Change Actual vs. 10-Year Avg.		-33.0	%		-21.4	%

(1) We do not expect weather to impact commercial kWh sales or revenues until the summer months

7

BASIC AND DILUTED SHARES OUTSTANDING

	Three Months Ended
	March 31,
	2009		2008
	- In Thousands -
Numerator:
Net Income (Loss)	$	4,919	$	(2,615	)
Income from Assumed Conversion of Convertible Senior Notes		—		—
Adjusted Numerator	$	4,919	$	(2,615	)
Denominator:
Weighted-average Shares of Common Stock Outstanding:
Common Shares Issued		35,557		35,354
Fully Vested Deferred Stock Units		108		205
Total Weighted-average Shares of Common Stock Outstanding-Basic		35,665		35,559
Effect of Dilutive Securities:
Convertible Senior Notes		—		—
Options and Stock Issuable Under Benefit Plans		540		—
Total Shares — Diluted		36,205		35,559

For the three months ended March 31, 2009 and March 31, 2008, 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.

Stock options with an exercise price greater than the average market price of the common stock are excluded from the dilution calculation.

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