Item 2.03 – Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On October 5, 2010, The Industrial Development Authority of the County of Pima (Authority) issued and sold in a public offering for the benefit of Tucson Electric Power Company (TEP) $100,000,000 aggregate principal amount of tax-exempt industrial development revenue bonds (Bonds). The Bonds bear interest at the rate of 5.25%, payable semi-annually on April 1 and October 1 of each year, commencing April 1, 2011, and mature on October 1, 2040.  

The Bonds were issued under an Indenture of Trust, dated as of October 1, 2010 (Indenture), between the Authority and U.S. Bank Trust National Association, as Trustee (Trustee). The Bonds are payable solely from payments to be made by TEP pursuant to a Loan Agreement, dated as of October 1, 2010, between TEP and the Authority (Loan Agreement), pursuant to which the Authority has loaned the proceeds of the Bonds to TEP. Pursuant to the Loan Agreement, TEP is obligated to make payments in such amounts and at such times as will be sufficient to pay, when due, the principal of, and premium, if any, and interest on the Bonds. TEP’s obligations under the Loan Agreement are unsecured.

The proceeds of the sale of the Bonds will be applied to the costs of construction of certain of TEP’s transmission and distribution facilities used to provide retail electric utility services in Pima County.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the complete text of the Indenture and Loan Agreement.

Item 9.01 — Financial Statements and Exhibits.

(d) Exhibits