As filed with the Securities and Exchange Commission on
               May 21, 1998. 
                               Registration No. 333-________





             SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C. 20549
                     ___________________

                          FORM S-8
                   REGISTRATION STATEMENT
                            UNDER
                 THE SECURITIES ACT OF 1933
                     ___________________

                UNISOURCE ENERGY CORPORATION
   (Exact name of registrant as specified in its charter)
                     ___________________

     Arizona                                86-0786732
(State or other jurisdiction of         (I.R.S. Employer
incorporation or organization)         Identification No.)

                    220 West Sixth Street
                   Tucson, Arizona  85701
                       ______________
          (Address of principal executive offices)
                     ___________________

                UNISOURCE ENERGY CORPORATION
      MANAGEMENT AND DIRECTORS DEFERRED COMPENSATION PLAN
                  (Full title of the plan)

             Dennis R. Nelson, General Counsel 
                UniSource Energy Corporation
                    220 West Sixth Street
                   Tucson, Arizona  85701
                      _________________
           (Name and address of agent for service)
Telephone number, including area code, of agent for service:
(520) 571-4000
                     ___________________

              CALCULATION  OF REGISTRATION  FEE


<TABLE> 

<S>                <C>            <C>            <C>              <C>
                                  Proposed       Proposed
                                  maximum        maximum 
Title of           Amount         offering       aggregate        Amount of
securities         to be          price          offering         registration
to be registered   registered     per unit       price            fee   

Deferred           $3,000,000     100%(2)        $3,000,000(2)    $885(2)
Compensation 
Obligations(1)


_________________

(1) The Deferred Compensation Obligations being registered
    are general unsecured obligations of UniSource Energy
    Corporation to pay deferred compensation in the future to
    participating members of a select group of directors,
    management or highly compensated employees in accordance
    with the terms of the UniSource Energy Corporation
    Management and Directors Deferred Compensation Plan (As
    Amended and Restated Effective January 1, 1998) (formerly
    the Tucson Electric Power Company Management and
    Directors Deferred Compensation Plan).

(2) Estimated solely for the purpose of determining the
    registration fee.

(3) Calculated pursuant to Rule 457(h).

   The Exhibit Index for this Registration Statement is at
   page S-4.


</TABLE> 
<PAGE>
                           PART I

                 INFORMATION REQUIRED IN THE
                  SECTION 10(a) PROSPECTUS


       The documents containing the information specified in
Part I of Form S-8 (plan information and registrant
information) will be sent or given to employees and directors
as specified by Rule 428(b)(1) of the Securities Act of 1933,
as amended (the "Securities Act").  Such documents need not be
filed with the Securities and Exchange Commission (the
"Commission") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424
of the Securities Act.  These documents, which include the
statement of availability required by Item 2 of Form S-8, and
the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Form S-8 (Part II hereof),
taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.


<PAGE>
                           PART II

                 INFORMATION REQUIRED IN THE
                   REGISTRATION STATEMENT


ITEM 3.     INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

       The following documents filed with the Commission by
UniSource Energy Corporation (the "Company") are incorporated
herein by reference: 

       (a)  Annual Report on Form 10-K filed with the
            Commission on March 3, 1998 for the Company's
            fiscal year ended December 31, 1997, as amended
            March 6, 1998;

       (b)  Quarterly Report on Form 10-Q filed with the
            Commission on May 13, 1998 for the Company's
            fiscal quarter ended March 31, 1998; and

       (c)  The description of the Company's Common Stock
            contained in the Company's Registration Statement
            on Form 8-A, filed with the Commission on
            December 23, 1997.

       All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference into the prospectus
and to be a part hereof from the date of filing of such
documents.  Any statement contained herein or in a document,
all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be
modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or
supersedes such statement.  Any such statement so modified or
superseded shall not be deemed, except as so modified or
amended, to constitute a part of this Registration Statement.


ITEM 4.     DESCRIPTION OF SECURITIES

       The UniSource Energy Corporation Management and
Directors Deferred Compensation Plan (As Amended and Restated
Effective January 1, 1998) (the "Plan") provides a select
group of management or highly compensated employees ("Eligible
Employees") and non-employee directors ("Directors") of the
Company and certain of its subsidiaries with the opportunity
to defer the receipt of certain pre-tax cash compensation. 
The obligations of the Company under the Plan (the "Deferred
Compensation Obligations") will be general unsecured
obligations of the Company to pay deferred compensation in the
future to participating Eligible Employees and Directors
("Participants") in accordance with the terms of the Plan from
the general assets of the Company or in shares of Company
Common Stock (depending on the elections made by Participants)
and will rank pari passu with other unsecured and
unsubordinated indebtedness of the Company from time to time
outstanding.  The Deferred Compensation Obligations will be
denominated and payable in United States dollars or shares of
Company Common Stock, depending on the elections made by
Participants.  The Common Stock issuable pursuant to the Plan
was registered on a Form S-8 Registration Statement (No. 333-
43769) filed with the Commission on January 6, 1998.

       Subject to certain limits set forth in the Plan, each
Participant may elect to defer up to 100% of his or her salary
or director's fees and/or up to 100% of his or her bonus, if
any, payable with respect to a particular calendar year ("Plan
Year").  Each Participant also elects to have his or her
deferrals credited in the form of cash or "Deferred Shares."
Deferred Shares are non-voting units of measurement that, for
bookkeeping purposes only, are deemed to be equivalent to one
outstanding share of the Company's Common Stock, without par
value ("Common Stock").

       The Company maintains bookkeeping accounts to which
Participants' deferrals are credited -- cash deferrals are
credited to a Participant's "Deferral Account" and Deferred
Shares are credited to a Participant's "Stock Account."  A
Participant is 100% vested in his or her Deferral Account
and/or Stock Account at all times.  A Participant's Deferral
Account is credited on a monthly basis with salary and bonus
deferrals and a deemed rate of earnings.  A Participant's
Stock Account is credited on a quarterly basis with a number
of Deferred Shares equal to the total of the Participant's
salary and bonus deferrals (which the Participant has elected
to be credited in the form of Deferred Shares), divided by the
fair market value of the Company's Common Stock as of the
crediting date.  A deemed rate of earnings is credited on
deferred amounts to be credited as Deferred Shares until such
time as such amounts are actually credited to the
Participant's Stock Account.  Stock Accounts are also credited
on a quarterly basis with dividend equivalents (if any) in the
form of additional Deferred Shares, which represent the amount
of dividends paid on the number of shares of Common Stock
represented by Deferred Shares credited to the Participant's
Stock Account at the time of payment, divided by the fair
market value of the Company's Common Stock as of the crediting
date.  Stock Accounts are subject to adjustment in the event
of certain mergers, stock splits or other events affecting the
Common Stock.  A Participant may elect to have amounts
credited to his or her Stock Account transferred to his or her
Deferral Account in the form of cash, but Deferral Account
balances may not be transferred to a Stock Account.

       If a Participant's employment or services with the
Company or any of its subsidiaries terminate as a result of
retirement or disability, the Deferred Compensation
Obligations will be paid in substantially equal quarterly
installments over fifteen years beginning on the Participant's
Payment Eligibility Date, which is the date as soon as
administratively feasible following the date the Participant
terminates from employment or services with the Company or any
of its subsidiaries.  If a Participant timely elects, he or
she may instead receive a lump sum payment and/or
distribution, or receive the quarterly installments over a
period of five or ten years.  If a Participant's employment or
services terminate for reasons other than retirement or
disability, or if the total value of a Participant's accounts
is less than $25,000, the Deferred Compensation Obligations
will be paid and/or distributed in one lump sum.  Deferral
Accounts will be paid in the form of cash.  Deferred Shares
credited to a Participant's Stock Account will be paid in an
equivalent whole number of shares of Common Stock.  The Plan
limits the number of shares of Common Stock that may be issued
or delivered under the Plan.  If a Participant reaches this
limit, any shares above such limit will instead be paid in
cash.

       No amount payable or deliverable under the Plan will
be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, voluntary or
involuntary.  Any attempt to dispose of any rights to benefits
payable under the Plan shall be void.

       The Deferred Compensation Obligations are not subject
to redemption, in whole or in part, prior to the individual
payment dates selected by the Participants.  A Participant may
withdraw up to 90% of the value of his or her Plan accounts;
however, the remaining 10% will be forfeited to the Company
upon such a withdrawal, and the Participant will not be
eligible to participate in the Plan for the remainder of that
Plan Year and the following Plan Year.  In addition, the
Company reserves the right to amend or terminate the Plan at
any time.

       The total amount of the Deferred Compensation
Obligations are not determinable because the amount will vary
depending upon the level of participation by Eligible
Employees and Directors and the amounts of their salaries,
bonuses or fees.  The duration of the Plan is indefinite.

       The Deferred Compensation Obligations are not
convertible into another security of the Company (subject to
certain investment elections that a Participant may make to
have amounts deemed to be invested, and eventually paid, in
the form of Company Common Stock).  The Deferred Compensation
Obligations will not have the benefit of a negative pledge or
any other affirmative or negative covenant on the part of the
Company.  Each Participant will be responsible for acting
independently with respect to, among other things, the giving
of notices, responding to any requests for consents, waivers
or amendments pertaining to the Deferred Compensation
Obligations, enforcing covenants and taking action upon a
default by the Company.


ITEM 5.     INTERESTS OF NAMED EXPERTS AND COUNSEL

       The validity of the original issuance of Common Stock
registered hereby is passed on for the Company by Dennis R.
Nelson.  Mr. Nelson is the General Counsel of the Company and
is compensated as an employee of the Company.


ITEM 6.     INDEMNIFICATION OF DIRECTORS AND OFFICERS

       Arizona corporate law generally authorizes, on a non-
exclusive basis, indemnification of officers and directors who
have acted or failed to act, in good faith, in a manner
believed to be in or not opposed to the best interest of the
Company (with certain limitations in the case of actions by or
in the right of the Company) and mandates such indemnification
in the case of an officer or director who is successful on the
merits or otherwise in defense of claims by reason of the fact
or such status as an officer or director.

       Article SIXTH of the Amended and Restated Articles of
Incorporation of the Company provides, in part, as follows:

            (B) No director of the Company shall be
  personally liable to the Company or its shareholders for
  money damages for any action taken or any failure to take
  any action as a Director; provided, however, that nothing
  herein shall be deemed to eliminate or limit any liability
  which may not be so eliminated or limited under the laws of
  the State of Arizona, as in effect at the effective date of
  this paragraph (B) of Article SIXTH or as thereafter
  amended.  No amendment, modification or repeal of this
  paragraph (B) shall eliminate or limit the protection
  afforded by this paragraph (B) to a director with respect
  to any act or omission occurring before the effective date
  thereof.

            (C) (1)  The Company shall, to the maximum extent
  permitted by applicable law, as from time to time in
  effect, indemnify any individual who is or was a party to
  or otherwise involved in (or threatened to be made a party
  to or otherwise involved in) any Proceeding (as hereinafter
  defined) because such individual is or was a director or
  officer of the Company, or, while a director or officer of
  the Company, is or was serving at the request of the
  Company as a director, officer, partner, trustee, employee
  or agent of another foreign or domestic corporation,
  partnership, joint venture, trust, employee benefit plan or
  other enterprise, against all Liability (as hereinafter
  defined) incurred by such individual in connection with
  such Proceeding.

                As used in this paragraph (C) of Article
  SIXTH, (a) the term "Expenses" includes attorneys' fees and
  all other costs and expenses reasonably related to a
  Proceeding, (b) the term "Liability" means the obligation
  to pay a judgment, settlement, penalty or fine (including
  any excise tax assessed with respect to an employee benefit
  plan) and reasonable Expenses incurred with respect to a
  Proceeding, and includes without limitation obligations and
  Expenses that have not yet been paid but that have been or
  may be incurred, and (c) the term "Proceeding" means any
  threatened, pending or completed action, suit or
  proceeding, whether civil, criminal, administrative or
  investigative and whether formal or informal, including
  without limitation any action, suit or proceeding by or in
  the right of the Company and including, further, any appeal
  in connection with any such action, suit or proceeding.

                (2)  The Company shall, to the maximum extent
  permitted by applicable law, pay any Expenses incurred by
  a director or officer of the Company in defending any such
  Proceeding in advance of the final disposition thereof upon
  receipt of any undertaking by or on behalf of such
  individual to repay such advances if it is ultimately
  determined that such individual did not meet any standard
  of conduct prescribed by applicable law and upon the
  satisfaction of such other conditions as may be imposed by
  applicable law.

                (3)  The Company by resolution of the Board
  of Directors, may extend the benefits of this paragraph (C)
  of Article SIXTH to employees and agents of the Company
  (each individual entitled to benefits under this paragraph
  (C) being hereinafter sometimes called an "Indemnified
  Person").

                (4)  All rights to indemnification and to the
  advancement of expenses granted under or pursuant to this
  paragraph (C) shall be deemed to arise out of a contract
  between the Company and each person who is an Indemnified
  Person at any time while this paragraph (C) is in effect
  any may be evidenced by a separate contract between the
  Company and each Indemnified Person; and such rights shall
  be effective in respect of all Proceedings commenced after
  the effective date of this paragraph (C), whether arising
  from acts or omissions occurring before or after such date. 
  No amendment, modification or repeal of this Article shall
  affect any rights or obligations theretofore existing.

                (5)  The Company may purchase and maintain
  insurance on behalf of, or insure or cause to be insured,
  any individual who is an Indemnified Person against any
  Liability asserted against or incurred by him in any
  capacity in respect of which he is an Indemnified Person,
  or arising out of his status in such capacity, whether or
  not the Company would have the power to indemnify him
  against such liability under this Article.  The Company's
  indemnity of any individual who is an Indemnified Person
  shall be reduced by any amounts such individual may collect
  with respect to such liability (a) under any policy of
  insurance purchased and maintained on his behalf by the
  Company or (b) from any other entity or enterprise served
  by such individual.

                (6)  The rights to indemnification and to the
  advancement of Expenses and all other benefits provided by,
  or granted pursuant to, this Article shall continue as to
  a person who has ceased to serve in the capacity in respect
  of which such person was an Indemnified Person and shall
  inure to the benefit of the heirs, executors and
  administrators of such person.

                (7)  The Board of Directors shall have the
  power and authority to make, alter, amend and repeal such
  procedural rules and regulations relating to
  indemnification and the advancement of Expenses as it, in
  its discretion, may deem necessary or expedient in order to
  carry out the purposes of this Article, such rules and
  regulations, if any, to be set forth in the Bylaws of the
  Company or in a resolution of the Board of Directors.


ITEM 7.     EXEMPTION FROM REGISTRATION CLAIMED

       Not applicable.



ITEM 8.     EXHIBITS

       See the attached Exhibit Index on page S-3.


ITEM 9.     UNDERTAKINGS

  (a)  The undersigned registrant hereby undertakes: 

            (1) To file, during any period in which offers or
  sales are being made, a post-effective amendment to this
  Registration Statement:

                      (i)      To include any prospectus
            required by Section 10(a)(3) of the Securities
            Act;

                     (ii)      To reflect in the prospectus
            any facts or events arising after the effective
            date of this Registration Statement (or the most
            recent post-effective amendment thereof) which,
            individually or in the aggregate, represent a
            fundamental change in the information set forth
            in this Registration Statement; and

                     (iii)     To include any material
            information with respect to the plan of
            distribution not previously disclosed in this
            Registration Statement or any material change to
            such information in this Registration Statement;

            Provided, however, that paragraphs (a)(1)(i) and
  (a)(1)(ii) do not apply if the information required to be
  included in a post-effective amendment by those paragraphs
  is contained in periodic reports filed by the registrant
  with or furnished to the Commission pursuant to Section 13
  or Section 15(d) of the Exchange Act that are incorporated
  by reference in this Registration Statement;

            (2) That, for the purpose of determining any
  liability under the Securities Act, each such post-
  effective amendment shall be deemed to be a new regis-
  tration statement relating to the securities offered
  therein, and the offering of such securities at that time
  shall be deemed to be the initial bona fide offering
  thereof; and

            (3) To remove from registration by means of a
  post-effective amendment any of the securities being
  registered which remain unsold at the termination of the
  offering.

  (b)  The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.

  (h)  Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the provisions described in Item 6 above, or otherwise, the
registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable.  In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue. 
<PAGE>
                         SIGNATURES

       The Registrant.  Pursuant to the requirements of the
Securities Act of 1933, the registrant certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Tucson,
State of Arizona, on the 8th day of May, 1998.

                     UNISOURCE ENERGY CORPORATION



                     By:  /s/ Charles E. Bayless     
                          Charles E. Bayless

                     Its:      Chairman, President and Chief
                               Executive Officer



                      POWER OF ATTORNEY

       Each person whose signature appears below constitutes
and appoints Charles E. Bayless and Dennis Nelson, or each of
them individually, his or her true and lawful attorney-in-fact
and agent with full powers of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and
to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any
of them individually, or his or her substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.

       Pursuant to the requirements of the Act, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.


xx
<TABLE>
<S>                      <C>                              <C>
SIGNATURE                TITLE                            DATE

/s/ Charles E. Bayless   Chairman, President and         May 8, 1998
Charles E. Bayless       Chief Executive Officer 
                         (Principal Executive Officer)

/s/ Ira R. Adler         Senior Vice President and       May 8, 1998
Ira R. Adler             Chief Financial Officer
                         (Principal Financial Officer)

/s/ Karen G. Kissinger   Vice President and              May 8, 1998
Karen G. Kissinger       Controller  

/s/ Elizabeth T. Bilby   Director                        May 8, 1998
Elizabeth T. Bilby

/s/ Jose L.Canchola      Director                        May 8, 1998
Jose L. Canchola

/s/ John L. Carter       Director                        May 8, 1998
John L. Carter

/s/ John A. Jeter        Director                        May 8, 1998
John A. Jeter

/s/ R.B. O'Rielly        Director                        May 8, 1998
R.B. (Buck) O'Rielly

/s/ Martha R. Seger      Director                        May 8, 1998
Martha R. Seger, Ph.D.

/s/ Donald G. Shropshire Director                        May 8, 1998
Donald G. Shropshire

/s/ H. Wilson Sundt      Director                        May 8, 1998
H. Wilson Sundt


</TABLE>
<PAGE>

                        EXHIBIT INDEX


Exhibit
Number           Description
4.          UniSource Energy Corporation Management
            and Directors Deferred Compensation Plan
            (As Amended and Restated Effective January 1, 1998).

5.          Opinion of Counsel (opinion re legality).  

15.1        Price Waterhouse LLP letter re unaudited interim 
            financial information.

15.2        Deloitte & Touche LLP letter re unaudited interim 
            financial information.

23.1        Consent of Deloitte & Touche LLP (consent
            of independent auditors).  

23.2        Consent of Counsel (included in Exhibit 5).

24.         Power of Attorney (included in this  
            Registration Statement under "Signatures").


<PAGE>
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As filed with the Securities and Exchange Commission on
               May 21, 1998. 
                               Registration No. 333-________

             SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C. 20549
                     ___________________

                          FORM S-8
                   REGISTRATION STATEMENT
                            UNDER
                 THE SECURITIES ACT OF 1933
                     ___________________

                UNISOURCE ENERGY CORPORATION
   (Exact name of registrant as specified in its charter)
                     ___________________

     Arizona                                86-0786732
(State or other jurisdiction of         (I.R.S. Employer
incorporation or organization)         Identification No.)

                    220 West Sixth Street
                   Tucson, Arizona  85701
                       ______________
          (Address of principal executive offices)
                     ___________________

                UNISOURCE ENERGY CORPORATION
      MANAGEMENT AND DIRECTORS DEFERRED COMPENSATION PLAN
                  (Full title of the plan)

             Dennis R. Nelson, General Counsel 
                UniSource Energy Corporation
                    220 West Sixth Street
                   Tucson, Arizona  85701
                      _________________
           (Name and address of agent for service)
Telephone number, including area code, of agent for service:
(520) 571-4000
                     ___________________

              CALCULATION  OF REGISTRATION  FEE
Proposed       Proposed
                                  maximum        maximum 
Title of           Amount         offering       aggregate        Amount of
securities         to be          price          offering         registration
to be registered   registered     per unit       price            fee   

Deferred           $3,000,000     100%(2)        $3,000,000(2)    $885(2)
Compensation 
Obligations(1)

_________________

(1) The Deferred Compensation Obligations being registered
    are general unsecured obligations of UniSource Energy
    Corporation to pay deferred compensation in the future to
    participating members of a select group of directors,
    management or highly compensated employees in accordance
    with the terms of the UniSource Energy Corporation
    Management and Directors Deferred Compensation Plan (As
    Amended and Restated Effective January 1, 1998) (formerly
    the Tucson Electric Power Company Management and
    Directors Deferred Compensation Plan).

(2) Estimated solely for the purpose of determining the
    registration fee.

(3) Calculated pursuant to Rule 457(h).

   The Exhibit Index for this Registration Statement is at
   page S-4.
PART I

                 INFORMATION REQUIRED IN THE
                  SECTION 10(a) PROSPECTUS

       The documents containing the information specified in
Part I of Form S-8 (plan information and registrant
information) will be sent or given to employees and directors
as specified by Rule 428(b)(1) of the Securities Act of 1933,
as amended (the "Securities Act").  Such documents need not be
filed with the Securities and Exchange Commission (the
"Commission") either as part of this Registration Statement or
as prospectuses or prospectus supplements pursuant to Rule 424
of the Securities Act.  These documents, which include the
statement of availability required by Item 2 of Form S-8, and
the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Form S-8 (Part II hereof),
taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
PART II

                 INFORMATION REQUIRED IN THE
                   REGISTRATION STATEMENT

ITEM 3.     INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

       The following documents filed with the Commission by
UniSource Energy Corporation (the "Company") are incorporated
herein by reference: 

       (a)  Annual Report on Form 10-K filed with the
            Commission on March 3, 1998 for the Company's
            fiscal year ended December 31, 1997, as amended
            March 6, 1998;

       (b)  Quarterly Report on Form 10-Q filed with the
            Commission on May 13, 1998 for the Company's
            fiscal quarter ended March 31, 1998; and

       (c)  The description of the Company's Common Stock
            contained in the Company's Registration Statement
            on Form 8-A, filed with the Commission on
            December 23, 1997.

       All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall
be deemed to be incorporated by reference into the prospectus
and to be a part hereof from the date of filing of such
documents.  Any statement contained herein or in a document,
all or a portion of which is incorporated or deemed to be
incorporated by reference herein, shall be deemed to be
modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or
supersedes such statement.  Any such statement so modified or
superseded shall not be deemed, except as so modified or
amended, to constitute a part of this Registration Statement.

ITEM 4.     DESCRIPTION OF SECURITIES

       The UniSource Energy Corporation Management and
Directors Deferred Compensation Plan (As Amended and Restated
Effective January 1, 1998) (the "Plan") provides a select
group of management or highly compensated employees ("Eligible
Employees") and non-employee directors ("Directors") of the
Company and certain of its subsidiaries with the opportunity
to defer the receipt of certain pre-tax cash compensation. 
The obligations of the Company under the Plan (the "Deferred
Compensation Obligations") will be general unsecured
obligations of the Company to pay deferred compensation in the
future to participating Eligible Employees and Directors
("Participants") in accordance with the terms of the Plan from
the general assets of the Company or in shares of Company
Common Stock (depending on the elections made by Participants)
and will rank pari passu with other unsecured and
unsubordinated indebtedness of the Company from time to time
outstanding.  The Deferred Compensation Obligations will be
denominated and payable in United States dollars or shares of
Company Common Stock, depending on the elections made by
Participants.  The Common Stock issuable pursuant to the Plan
was registered on a Form S-8 Registration Statement (No. 333-
43769) filed with the Commission on January 6, 1998.

       Subject to certain limits set forth in the Plan, each
Participant may elect to defer up to 100% of his or her salary
or director's fees and/or up to 100% of his or her bonus, if
any, payable with respect to a particular calendar year ("Plan
Year").  Each Participant also elects to have his or her
deferrals credited in the form of cash or "Deferred Shares."
Deferred Shares are non-voting units of measurement that, for
bookkeeping purposes only, are deemed to be equivalent to one
outstanding share of the Company's Common Stock, without par
value ("Common Stock").

       The Company maintains bookkeeping accounts to which
Participants' deferrals are credited -- cash deferrals are
credited to a Participant's "Deferral Account" and Deferred
Shares are credited to a Participant's "Stock Account."  A
Participant is 100% vested in his or her Deferral Account
and/or Stock Account at all times.  A Participant's Deferral
Account is credited on a monthly basis with salary and bonus
deferrals and a deemed rate of earnings.  A Participant's
Stock Account is credited on a quarterly basis with a number
of Deferred Shares equal to the total of the Participant's
salary and bonus deferrals (which the Participant has elected
to be credited in the form of Deferred Shares), divided by the
fair market value of the Company's Common Stock as of the
crediting date.  A deemed rate of earnings is credited on
deferred amounts to be credited as Deferred Shares until such
time as such amounts are actually credited to the
Participant's Stock Account.  Stock Accounts are also credited
on a quarterly basis with dividend equivalents (if any) in the
form of additional Deferred Shares, which represent the amount
of dividends paid on the number of shares of Common Stock
represented by Deferred Shares credited to the Participant's
Stock Account at the time of payment, divided by the fair
market value of the Company's Common Stock as of the crediting
date.  Stock Accounts are subject to adjustment in the event
of certain mergers, stock splits or other events affecting the
Common Stock.  A Participant may elect to have amounts
credited to his or her Stock Account transferred to his or her
Deferral Account in the form of cash, but Deferral Account
balances may not be transferred to a Stock Account.

       If a Participant's employment or services with the
Company or any of its subsidiaries terminate as a result of
retirement or disability, the Deferred Compensation
Obligations will be paid in substantially equal quarterly
installments over fifteen years beginning on the Participant's
Payment Eligibility Date, which is the date as soon as
administratively feasible following the date the Participant
terminates from employment or services with the Company or any
of its subsidiaries.  If a Participant timely elects, he or
she may instead receive a lump sum payment and/or
distribution, or receive the quarterly installments over a
period of five or ten years.  If a Participant's employment or
services terminate for reasons other than retirement or
disability, or if the total value of a Participant's accounts
is less than $25,000, the Deferred Compensation Obligations
will be paid and/or distributed in one lump sum.  Deferral
Accounts will be paid in the form of cash.  Deferred Shares
credited to a Participant's Stock Account will be paid in an
equivalent whole number of shares of Common Stock.  The Plan
limits the number of shares of Common Stock that may be issued
or delivered under the Plan.  If a Participant reaches this
limit, any shares above such limit will instead be paid in
cash.

       No amount payable or deliverable under the Plan will
be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, voluntary or
involuntary.  Any attempt to dispose of any rights to benefits
payable under the Plan shall be void.

       The Deferred Compensation Obligations are not subject
to redemption, in whole or in part, prior to the individual
payment dates selected by the Participants.  A Participant may
withdraw up to 90% of the value of his or her Plan accounts;
however, the remaining 10% will be forfeited to the Company
upon such a withdrawal, and the Participant will not be
eligible to participate in the Plan for the remainder of that
Plan Year and the following Plan Year.  In addition, the
Company reserves the right to amend or terminate the Plan at
any time.

       The total amount of the Deferred Compensation
Obligations are not determinable because the amount will vary
depending upon the level of participation by Eligible
Employees and Directors and the amounts of their salaries,
bonuses or fees.  The duration of the Plan is indefinite.

       The Deferred Compensation Obligations are not
convertible into another security of the Company (subject to
certain investment elections that a Participant may make to
have amounts deemed to be invested, and eventually paid, in
the form of Company Common Stock).  The Deferred Compensation
Obligations will not have the benefit of a negative pledge or
any other affirmative or negative covenant on the part of the
Company.  Each Participant will be responsible for acting
independently with respect to, among other things, the giving
of notices, responding to any requests for consents, waivers
or amendments pertaining to the Deferred Compensation
Obligations, enforcing covenants and taking action upon a
default by the Company.

ITEM 5.     INTERESTS OF NAMED EXPERTS AND COUNSEL

       The validity of the original issuance of Common Stock
registered hereby is passed on for the Company by Dennis R.
Nelson.  Mr. Nelson is the General Counsel of the Company and
is compensated as an employee of the Company.

ITEM 6.     INDEMNIFICATION OF DIRECTORS AND OFFICERS

       Arizona corporate law generally authorizes, on a non-
exclusive basis, indemnification of officers and directors who
have acted or failed to act, in good faith, in a manner
believed to be in or not opposed to the best interest of the
Company (with certain limitations in the case of actions by or
in the right of the Company) and mandates such indemnification
in the case of an officer or director who is successful on the
merits or otherwise in defense of claims by reason of the fact
or such status as an officer or director.

       Article SIXTH of the Amended and Restated Articles of
Incorporation of the Company provides, in part, as follows:

            (B) No director of the Company shall be
  personally liable to the Company or its shareholders for
  money damages for any action taken or any failure to take
  any action as a Director; provided, however, that nothing
  herein shall be deemed to eliminate or limit any liability
  which may not be so eliminated or limited under the laws of
  the State of Arizona, as in effect at the effective date of
  this paragraph (B) of Article SIXTH or as thereafter
  amended.  No amendment, modification or repeal of this
  paragraph (B) shall eliminate or limit the protection
  afforded by this paragraph (B) to a director with respect
  to any act or omission occurring before the effective date
  thereof.

            (C) (1)  The Company shall, to the maximum extent
  permitted by applicable law, as from time to time in
  effect, indemnify any individual who is or was a party to
  or otherwise involved in (or threatened to be made a party
  to or otherwise involved in) any Proceeding (as hereinafter
  defined) because such individual is or was a director or
  officer of the Company, or, while a director or officer of
  the Company, is or was serving at the request of the
  Company as a director, officer, partner, trustee, employee
  or agent of another foreign or domestic corporation,
  partnership, joint venture, trust, employee benefit plan or
  other enterprise, against all Liability (as hereinafter
  defined) incurred by such individual in connection with
  such Proceeding.

                As used in this paragraph (C) of Article
  SIXTH, (a) the term "Expenses" includes attorneys' fees and
  all other costs and expenses reasonably related to a
  Proceeding, (b) the term "Liability" means the obligation
  to pay a judgment, settlement, penalty or fine (including
  any excise tax assessed with respect to an employee benefit
  plan) and reasonable Expenses incurred with respect to a
  Proceeding, and includes without limitation obligations and
  Expenses that have not yet been paid but that have been or
  may be incurred, and (c) the term "Proceeding" means any
  threatened, pending or completed action, suit or
  proceeding, whether civil, criminal, administrative or
  investigative and whether formal or informal, including
  without limitation any action, suit or proceeding by or in
  the right of the Company and including, further, any appeal
  in connection with any such action, suit or proceeding.

                (2)  The Company shall, to the maximum extent
  permitted by applicable law, pay any Expenses incurred by
  a director or officer of the Company in defending any such
  Proceeding in advance of the final disposition thereof upon
  receipt of any undertaking by or on behalf of such
  individual to repay such advances if it is ultimately
  determined that such individual did not meet any standard
  of conduct prescribed by applicable law and upon the
  satisfaction of such other conditions as may be imposed by
  applicable law.

                (3)  The Company by resolution of the Board
  of Directors, may extend the benefits of this paragraph (C)
  of Article SIXTH to employees and agents of the Company
  (each individual entitled to benefits under this paragraph
  (C) being hereinafter sometimes called an "Indemnified
  Person").

                (4)  All rights to indemnification and to the
  advancement of expenses granted under or pursuant to this
  paragraph (C) shall be deemed to arise out of a contract
  between the Company and each person who is an Indemnified
  Person at any time while this paragraph (C) is in effect
  any may be evidenced by a separate contract between the
  Company and each Indemnified Person; and such rights shall
  be effective in respect of all Proceedings commenced after
  the effective date of this paragraph (C), whether arising
  from acts or omissions occurring before or after such date. 
  No amendment, modification or repeal of this Article shall
  affect any rights or obligations theretofore existing.

                (5)  The Company may purchase and maintain
  insurance on behalf of, or insure or cause to be insured,
  any individual who is an Indemnified Person against any
  Liability asserted against or incurred by him in any
  capacity in respect of which he is an Indemnified Person,
  or arising out of his status in such capacity, whether or
  not the Company would have the power to indemnify him
  against such liability under this Article.  The Company's
  indemnity of any individual who is an Indemnified Person
  shall be reduced by any amounts such individual may collect
  with respect to such liability (a) under any policy of
  insurance purchased and maintained on his behalf by the
  Company or (b) from any other entity or enterprise served
  by such individual.

                (6)  The rights to indemnification and to the
  advancement of Expenses and all other benefits provided by,
  or granted pursuant to, this Article shall continue as to
  a person who has ceased to serve in the capacity in respect
  of which such person was an Indemnified Person and shall
  inure to the benefit of the heirs, executors and
  administrators of such person.

                (7)  The Board of Directors shall have the
  power and authority to make, alter, amend and repeal such
  procedural rules and regulations relating to
  indemnification and the advancement of Expenses as it, in
  its discretion, may deem necessary or expedient in order to
  carry out the purposes of this Article, such rules and
  regulations, if any, to be set forth in the Bylaws of the
  Company or in a resolution of the Board of Directors.

ITEM 7.     EXEMPTION FROM REGISTRATION CLAIMED

       Not applicable.

ITEM 8.     EXHIBITS

       See the attached Exhibit Index on page S-3.

ITEM 9.     UNDERTAKINGS

  (a)  The undersigned registrant hereby undertakes: 

            (1) To file, during any period in which offers or
  sales are being made, a post-effective amendment to this
  Registration Statement:

                      (i)      To include any prospectus
            required by Section 10(a)(3) of the Securities
            Act;

                     (ii)      To reflect in the prospectus
            any facts or events arising after the effective
            date of this Registration Statement (or the most
            recent post-effective amendment thereof) which,
            individually or in the aggregate, represent a
            fundamental change in the information set forth
            in this Registration Statement; and

                     (iii)     To include any material
            information with respect to the plan of
            distribution not previously disclosed in this
            Registration Statement or any material change to
            such information in this Registration Statement;

            Provided, however, that paragraphs (a)(1)(i) and
  (a)(1)(ii) do not apply if the information required to be
  included in a post-effective amendment by those paragraphs
  is contained in periodic reports filed by the registrant
  with or furnished to the Commission pursuant to Section 13
  or Section 15(d) of the Exchange Act that are incorporated
  by reference in this Registration Statement;

            (2) That, for the purpose of determining any
  liability under the Securities Act, each such post-
  effective amendment shall be deemed to be a new regis-
  tration statement relating to the securities offered
  therein, and the offering of such securities at that time
  shall be deemed to be the initial bona fide offering
  thereof; and

            (3) To remove from registration by means of a
  post-effective amendment any of the securities being
  registered which remain unsold at the termination of the
  offering.

  (b)  The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.

  (h)  Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the provisions described in Item 6 above, or otherwise, the
registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable.  In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act
and will be governed by the final adjudication of such issue.
SIGNATURES

       The Registrant.  Pursuant to the requirements of the
Securities Act of 1933, the registrant certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Tucson,
State of Arizona, on the 8th day of May, 1998.

                     UNISOURCE ENERGY CORPORATION

                     By:  /s/ Charles E. Bayless     
                          Charles E. Bayless

                     Its:      Chairman, President and Chief
                               Executive Officer

                      POWER OF ATTORNEY

       Each person whose signature appears below constitutes
and appoints Charles E. Bayless and Dennis Nelson, or each of
them individually, his or her true and lawful attorney-in-fact
and agent with full powers of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and
to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and
agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and
about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any
of them individually, or his or her substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.

       Pursuant to the requirements of the Act, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

xx
SIGNATURE                TITLE                            DATE

/s/ Charles E. Bayless   Chairman, President and         May 8, 1998
Charles E. Bayless       Chief Executive Officer 
                         (Principal Executive Officer)

/s/ Ira R. Adler         Senior Vice President and       May 8, 1998
Ira R. Adler             Chief Financial Officer
                         (Principal Financial Officer)

/s/ Karen G. Kissinger   Vice President and              May 8, 1998
Karen G. Kissinger       Controller  

/s/ Elizabeth T. Bilby   Director                        May 8, 1998
Elizabeth T. Bilby

/s/ Jose L.Canchola      Director                        May 8, 1998
Jose L. Canchola

/s/ John L. Carter       Director                        May 8, 1998
John L. Carter

/s/ John A. Jeter        Director                        May 8, 1998
John A. Jeter

/s/ R.B. O'Rielly        Director                        May 8, 1998
R.B. (Buck) O'Rielly

/s/ Martha R. Seger      Director                        May 8, 1998
Martha R. Seger, Ph.D.

/s/ Donald G. Shropshire Director                        May 8, 1998
Donald G. Shropshire

/s/ H. Wilson Sundt      Director                        May 8, 1998
H. Wilson Sundt
EXHIBIT INDEX

Exhibit
Number           Description
4.          UniSource Energy Corporation Management
            and Directors Deferred Compensation Plan
            (As Amended and Restated Effective January 1, 1998).

5.          Opinion of Counsel (opinion re legality).  

15.1        Price Waterhouse LLP letter re unaudited interim 
            financial information.

15.2        Deloitte & Touche LLP letter re unaudited interim 
            financial information.

23.1        Consent of Deloitte & Touche LLP (consent
            of independent auditors).  

23.2        Consent of Counsel (included in Exhibit 5).

24.         Power of Attorney (included in this  
            Registration Statement under "Signatures").