Uns Energy (UNS) 8-K Maintains 2012 Earnings Guidance Range

Exhibit 99.1

FOR IMMEDIATE RELEASE	July 30, 2012
Media Contact: Joseph Barrios, (520) 884-3725	Page 1 of 8
Financial Analyst Contact: Chris Norman, (520) 884-3649

UNS ENERGY REPORTS SECOND QUARTER 2012 EARNINGS,

MAINTAINS 2012 EARNINGS GUIDANCE RANGE

• UNS Energy’s net income for the second quarter of 2012 was $26.3 million, or $0.64 per share of common stock on a fully-diluted basis, compared with net income of $28.6 million, or $0.71 per diluted share in the second quarter of 2011. For the six months ended June 30, 2012, UNS Energy’s net income was $32.7 million, or $0.81 per diluted share, compared with net income of $42.1 million, or $1.07 per diluted share, in the same period last year.

• UNS Energy’s primary subsidiary, Tucson Electric Power Company (TEP), reported net income of $21.9 million in the second quarter of 2012 compared with $25.2 million in the second quarter of 2011. TEP’s results were negatively affected by an anticipated reduction in margins on long-term wholesale sales and an expected increase in depreciation and amortization expense.

• Financial results for the second quarter were in-line with expectations. UNS Energy is maintaining its 2012 earnings guidance range of $2.05 to $2.35 per diluted share.

Tucson, Ariz. –UNS Energy Corporation (NYSE: UNS) today reported second quarter 2012 net income of $26.3 million, or $0.64 per share of common stock on a fully-diluted basis, compared with net income of $28.6 million, or $0.71 per diluted share in the same period last year. TEP reported net income of $21.9 million for the second quarter of 2012, 13 percent below net income of $25.2 million in the second quarter of 2011.

“Through the first half of the year, our financial results are tracking closely with our forecast,” said Paul Bonavia, UNS Energy’s Chairman and Chief Executive Officer. “We knew that 2012 would be a challenging year as TEP’s current electric rates are based on costs and infrastructure investments from 2006. Despite this challenge, our operating performance is strong. We remain committed to containing costs while serving our customers safely and reliably.”

TEP is in the final year of a base rate freeze that was approved in November 2008 by the Arizona Corporation Commission (ACC) as part of a settlement agreement. The settlement precluded TEP from filing a rate case application for new rates prior to June 30, 2012. On July 2, 2012, TEP submitted a rate application with the ACC requesting an increase in non-fuel base rates of $127.8 million or 15 percent over adjusted test year 2011 revenues. TEP requested that new rates be in place no later than August 1, 2013. This is consistent with the agreement among the parties to the 2008 settlement to use best efforts to implement new rates no later than 13 months from the date TEP files a rate application.

“The rate proposal filed by TEP earlier this month is designed to align customer rates with our current cost structure. Our application also contains proposals to reform rates in order to balance the ACC’s renewable energy and energy efficiency requirements with TEP’s opportunity to earn a fair return on investment,” Bonavia said.

Tucson Electric Power

Retail kWh Sales and Revenues

TEP’s retail kWh sales increased by 4.6 percent in the second quarter, due in part to a 45.1 percent increase in cooling degree days compared with the second quarter of 2011. The increase in retail sales volumes led to a $7.3 million, or 5.3 percent, increase in TEP’s retail margin revenues compared with the second quarter of 2011.

Long-Term Wholesale Revenues

As expected, TEP did not record any margin in the second quarter of 2012 on long-term wholesale kWh sales, compared with $4.0 million in the second quarter of 2011. The decrease reflects a pricing change that occurred in June 2011 related to TEP’s largest wholesale sales contract.

Other Operating Expenses

TEP’s base O&M expense was $3.0 million higher than the second quarter of 2011 due in part to planned generating plant maintenance outages. Base O&M excludes costs directly offset by customer surcharges and third-party reimbursements. In the second quarter of 2012, depreciation and amortization expense increased by $3.4 million as a result of additional plant-in-service compared with the same period last year.

Year-to-Date Results

In the first six months of 2012, TEP reported net income of $20.4 million compared with net income of $29.9 million in the same period last year. That decrease was due to the anticipated decline in long-term wholesale margin revenues and higher depreciation expense. Those factors were partially offset by an increase in retail margin revenues.

UNS Gas

UNS Gas reported net income of less than $0.1 million in the second quarter of 2012 compared with net income of $0.4 million in the second quarter of 2011.

UNS Electric

UNS Electric reported net income of $4.5 million in the second quarter of 2012 compared with $3.9 million in the second quarter of 2011. The increase resulted from higher kWh sales to residential and commercial customers. Cooling degree days in UNS Electric’s service territory were 29.8% higher than the second quarter of 2011.

Seasonality of Earnings

The net income and results of operations of TEP as well as of UNS Gas and UNS Electric – operating subsidiaries of UniSource Energy Services (UES) – are seasonal in nature. TEP and UNS Electric typically record the majority of their net income during the second and third quarters when hot weather contributes to higher energy consumption. TEP’s retail rates, which include higher charges for higher levels of energy use, also shift a larger share of the company’s earnings into those periods.

Energy demand from UNS Gas customers typically peaks during the winter. Accordingly, UNS Gas typically records the majority of its net income during the first and fourth quarters.

2

Net Income and Earnings Per Share Summary

	2nd Quarter						YTD June 30,
Net Income	2012			2011			2012			2011
	-Millions-						-Millions-
Tucson Electric Power	$	21.9		$	25.2		$	20.4		$	29.9
UNS Gas		—			0.4			5.4			6.5
UNS Electric		4.5			3.9			7.3			7.5
Other (1)		(0.1	)		(0.9	)		(0.4	)		(1.8	)
Net Income	$	26.3		$	28.6		$	32.7		$	42.1
Avg. Basic Shares Outstanding (Millions)		40.5			37.0			39.3			36.9
Avg. Diluted Shares Outstanding (Millions)		41.6			41.6			41.6			41.5
	2nd Quarter						YTD June 30,
Earnings Per UNS Energy Share	2012			2011			2012			2011
Tucson Electric Power	$	0.54		$	0.68		$	0.52		$	0.81
UNS Gas		—			0.01			0.14			0.18
UNS Electric		0.11			0.11			0.18			0.20
Other (1)		—			(0.03	)		(0.01	)		(0.05	)
Net Income Per Basic Share	$	0.65		$	0.77		$	0.83		$	1.14
Net Income Per Diluted Share	$	0.64		$	0.71		$	0.81		$	1.07

(1) Includes UNS Energy on a stand-alone basis and results from Millennium Energy Holdings, Inc. and UniSource Energy Development, wholly-owned subsidiaries of UNS Energy.

UNS Energy believes the presentation of TEP, UNS Gas and UNS Electric net income or loss on a per basic UNS Energy share basis (which are non-GAAP financial measures) provides useful information to investors by disclosing the results of operations of its business segments on a basis consistent with UNS Energy’s reported earnings or losses.

Conference Call and Webcast

The company will host a conference call on Monday, July 30 at 11:00 a.m. ET to discuss the financial results and outlook. To participate in the call, please dial in 5 to 10 minutes prior to the start time.

Dial-in number:(877) 582-0446

Reference code:13237677

The conference call also can be heard live online at uns.com. The webcast will be available for replay for seven days.

3

Replay number: (855) 859-2056

Reference code: 13237677

In conjunction with this earnings announcement, UNS Energy has provided detailed information on its performance during the second quarter of 2012. These materials have been filed with the Securities and Exchange Commission and are also available at uns.com.

UNS Energy is a Tucson, Arizona-based company with consolidated assets of approximately $4 billion. UNS Energy’s primary subsidiaries include Tucson Electric Power, which serves more than 404,000 customers in southern Arizona, and UniSource Energy Services, provider of natural gas and electric service for about 240,000 customers in northern and southern Arizona.

Visit uns.com for more information about UNS Energy and its subsidiaries.

This release contains forward-looking information that involves risks and uncertainties, including factors that could affect UNS Energy’s ability to reach the 2012 earnings guidance. These risks and uncertainties 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; changes to long-term contracts; the cost of fuel and power supplies; performance of TEP’s generating plants; and other factors listed in UNS 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 outcomes currently expected by UNS Energy.

4

UNS ENERGY 2012 RESULTS

Condensed Consolidated Statements of Income	Three Months Ended
(in Thousands of Dollars, Except Per Share Amounts)	June 30,						Increase / (Decrease)
(UNAUDITED)	2012			2011			Amount			Percent
Operating Revenues
Electric Retail Sales	$	292,071		$	275,616		$	16,455			6.0
Electric Wholesale Sales		28,684			38,744			(10,060	)		(26.0	)
Gas Revenue		20,006			25,020			(5,014	)		(20.0	)
Other Revenues		26,410			30,293			(3,883	)		(12.8	)
Total Operating Revenues		367,171			369,673			(2,502	)		(0.7	)
Operating Expenses
Fuel		82,325			81,949			376			0.5
Purchased Energy		51,376			66,336			(14,960	)		(22.6	)
Transmission		3,412			3,464			(52	)		(1.5	)
Increase (Decrease) to Reflect PPFAC/PGA Recovery Treatment		14,215			3,790			10,425			N/M
Total Fuel and Purchased Energy		151,328			155,539			(4,211	)		(2.7	)
Other Operations and Maintenance		90,926			90,052			874			1.0
Depreciation		35,190			33,310			1,880			5.6
Amortization		9,112			7,253			1,859			25.6
Taxes Other Than Income Taxes		12,556			12,229			327			2.7
Total Operating Expenses		299,112			298,383			729			0.2
Operating Income		68,059			71,290			(3,231	)		(4.5	)
Other Income (Deductions)
Interest Income		383			826			(443	)		(53.6	)
Other Income		1,333			2,646			(1,313	)		(49.6	)
Other Expense		(828	)		(813	)		(15	)		(1.8	)
Total Other Income (Deductions)		888			2,659			(1,771	)		(66.6	)
Interest Expense
Long-Term Debt		17,602			18,203			(601	)		(3.3	)
Capital Leases		8,301			9,931			(1,630	)		(16.4	)
Other Interest Expense, Net of Interest Capitalized		(340	)		(109	)		(231	)		N/M
Total Interest Expense		25,563			28,025			(2,462	)		(8.8	)
Income Before Income Taxes		43,384			45,924			(2,540	)		(5.5	)
Income Tax Expense		17,111			17,320			(209	)		(1.2	)
Net Income	$	26,273		$	28,604		$	(2,331	)		(8.1	)
Weighted-Average Shares of Common Stock Outstanding (000)		40,471			36,950			3,521			9.5
Basic Earnings per Share	$	0.65		$	0.77		$	(0.12	)		(15.6	)
Diluted Earnings per Share	$	0.64		$	0.71		$	(0.07	)		(9.9	)
Dividends Declared per Share	$	0.43		$	0.42		$	0.01			2.4

N/M—Not Meaningful

Reclassifications have been made to prior periods to conform to the current period's presentation.

5

UNS ENERGY 2012 RESULTS

Condensed Consolidated Statements of Income	Six Months Ended
(in Thousands of Dollars, Except Per Share Amounts)	June 30,						Increase / (Decrease)
(UNAUDITED)	2012			2011			Amount			Percent
Operating Revenues
Electric Retail Sales	$	497,502		$	492,831		$	4,671			0.9
Electric Wholesale Sales		65,787			79,658			(13,871	)		(17.4	)
Gas Revenue		70,215			82,210			(11,995	)		(14.6	)
Other Revenues		52,540			59,740			(7,200	)		(12.1	)
Total Operating Revenues		686,044			714,439			(28,395	)		(4.0	)
Operating Expenses
Fuel		153,060			153,141			(81	)		(0.1	)
Purchased Energy		114,653			144,610			(29,957	)		(20.7	)
Transmission		6,238			5,966			272			4.6
Decrease to Reflect PPFAC/PGA Recovery Treatment		11,654			(1,599	)		13,253			N/M
Total Fuel and Purchased Energy		285,605			302,118			(16,513	)		(5.5	)
Other Operations and Maintenance		185,241			191,107			(5,866	)		(3.1	)
Depreciation		70,174			66,100			4,074			6.2
Amortization		17,776			14,631			3,145			21.5
Taxes Other Than Income Taxes		24,794			24,374			420			1.7
Total Operating Expenses		583,590			598,330			(14,740	)		(2.5	)
Operating Income		102,454			116,109			(13,655	)		(11.8	)
Other Income (Deductions)
Interest Income		641			1,820			(1,179	)		(64.8	)
Other Income		4,079			5,477			(1,398	)		(25.5	)
Other Expense		(937	)		(1,417	)		480			33.9
Total Other Income (Deductions)		3,783			5,880			(2,097	)		(35.7	)
Interest Expense
Long-Term Debt		36,737			36,296			441			1.2
Capital Leases		16,598			19,860			(3,262	)		(16.4	)
Other Interest Expense, Net of Interest Capitalized		(166	)		(1,030	)		864			83.9
Total Interest Expense		53,169			55,126			(1,957	)		(3.6	)
Income Before Income Taxes		53,068			66,863			(13,795	)		(20.6	)
Income Tax Expense		20,319			24,787			(4,468	)		(18.0	)
Net Income	$	32,749		$	42,076		$	(9,327	)		(22.2	)
Weighted-Average Shares of Common Stock Outstanding (000)		39,251			36,869			2,382			6.5
Basic Earnings Per Share	$	0.83		$	1.14		$	(0.31	)		(27.2	)
Diluted Earnings Per Share	$	0.81		$	1.07		$	(0.26	)		(24.3	)
Dividends Declared Per Share	$	0.86		$	0.84		$	0.02			2.4

N/M—Not Meaningful

Reclassifications have been made to prior periods to conform to the current period's presentation.

6

TUCSON ELECTRIC POWER COMPANY 2012 RESULTS

Condensed Consolidated Statements of Income	Three Months Ended
(in Thousands of Dollars)	June 30,						Increase / (Decrease)
(UNAUDITED)	2012			2011			Amount			Percent
Operating Revenues
Electric Retail Sales	$	247,770		$	231,652		$	16,118			7.0
Electric Wholesale Sales		22,274			31,759			(9,485	)		(29.9	)
Other Revenues		29,375			31,822			(2,447	)		(7.7	)
Total Operating Revenues		299,419			295,233			4,186			1.4
Operating Expenses
Fuel		79,554			80,217			(663	)		(0.8	)
Purchased Power		20,862			26,445			(5,583	)		(21.1	)
Transmission		1,401			1,232			169			13.7
Increase (Decrease) to Reflect PPFAC Recovery Treatment		12,811			2,675			10,136			N/M
Total Fuel and Purchased Energy		114,628			110,569			4,059			3.7
Other Operations and Maintenance		78,683			78,094			589			0.8
Depreciation		27,545			25,850			1,695			6.6
Amortization		10,028			8,180			1,848			22.6
Taxes Other Than Income Taxes		10,324			10,043			281			2.8
Total Operating Expenses		241,208			232,736			8,472			3.6
Operating Income		58,211			62,497			(4,286	)		(6.9	)
Other Income (Deductions)
Interest Income		43			582			(539	)		(92.6	)
Other Income		1,209			1,719			(510	)		(29.7	)
Other Expense		(1,984	)		(2,490	)		506			20.3
Total Other Income (Deductions)		(732	)		(189	)		(543	)		N/M
Interest Expense
Long-Term Debt		13,378			12,157			1,221			10.0
Capital Leases		8,301			9,930			(1,629	)		(16.4	)
Other Interest Expense, Net of Interest Capitalized		(352	)		(91	)		(261	)		N/M
Total Interest Expense		21,327			21,996			(669	)		(3.0	)
Income Before Income Taxes		36,152			40,312			(4,160	)		(10.3	)
Income Tax Expense		14,242			15,154			(912	)		(6.0	)
Net Income	$	21,910		$	25,158		$	(3,248	)		(12.9	)
	Three Months Ended
Tucson Electric Power	June 30,						Increase / (Decrease)
Electric MWh Sales:	2012			2011			Amount			Percent
Retail Sales		2,439,980			2,331,563			108,417			4.6
Long-Term Wholesale Sales		156,400			208,046			(51,646	)		(24.8	)

N/M—Not Meaningful

Reclassifications have been made to prior periods to conform to the current period's presentation.

7

TUCSON ELECTRIC POWER COMPANY 2012 RESULTS

Condensed Consolidated Statements of Income	Six Months Ended
(in Thousands of Dollars)	June 30,						Increase / (Decrease)
(UNAUDITED)	2012			2011			Amount			Percent
Operating Revenues
Electric Retail Sales	$	414,101		$	405,354		$	8,747			2.2
Electric Wholesale Sales		52,040			67,015			(14,975	)		(22.3	)
Other Revenues		57,256			62,452			(5,196	)		(8.3	)
Total Operating Revenues		523,397			534,821			(11,424	)		(2.1	)
Operating Expenses
Fuel		149,528			150,587			(1,059	)		(0.7	)
Purchased Power		34,488			43,680			(9,192	)		(21.0	)
Transmission		2,363			1,927			436			22.6
Decrease to Reflect PPFAC Recovery Treatment		5,125			(6,262	)		11,387			N/M
Total Fuel and Purchased Energy		191,504			189,932			1,572			0.8
Other Operations and Maintenance		161,149			166,587			(5,438	)		(3.3	)
Depreciation		55,012			51,583			3,429			6.6
Amortization		19,620			16,484			3,136			19.0
Taxes Other Than Income Taxes		20,009			19,947			62			0.3
Total Operating Expenses		447,294			444,533			2,761			0.6
Operating Income		76,103			90,288			(14,185	)		(15.7	)
Other Income (Deductions)
Interest Income		69			1,317			(1,248	)		(94.8	)
Other Income		3,327			4,367			(1,040	)		(23.8	)
Other Expense		(3,128	)		(4,996	)		1,868			37.4
Total Other Income (Deductions)		268			688			(420	)		(61.0	)
Interest Expense
Long-Term Debt		27,294			24,412			2,882			11.8
Capital Leases		16,598			19,859			(3,261	)		(16.4	)
Other Interest Expense, Net of Interest Capitalized		(243	)		(837	)		594			71.0
Total Interest Expense		43,649			43,434			215			0.5
Income Before Income Taxes		32,722			47,542			(14,820	)		(31.2	)
Income Tax Expense		12,273			17,681			(5,408	)		(30.6	)
Net Income	$	20,449		$	29,861		$	(9,412	)		(31.5	)
	Six Months Ended
Tucson Electric Power	June 30,						Increase / (Decrease)
Electric MWh Sales:	2012			2011			Amount			Percent
Retail Sales		4,358,023			4,286,300			71,723			1.7
Long-Term Wholesale Sales		326,857			438,384			(111,527	)		(25.4	)

N/M—Not Meaningful

Reclassifications have been made to prior periods to conform to the current period's presentation.

8