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UTILITY PLANT AND JOINTLY-OWNED FACILITIES
 12 Months Ended
Dec. 31, 2019
Regulated Operations [Abstract]  
UTILITY PLANT AND JOINTLY-OWNED FACILITIES UTILITY PLANT AND JOINTLY-OWNED FACILITIES
UTILITY PLANT
The following table shows Plant in Service on the Consolidated Balance Sheets by major class:
 
Annual Depreciation Rate (3)
 
Average Remaining Life in Years (3)
 
December 31,
($ in millions)
 
 
2019
 
2018
Plant in Service
 
 
 
 
 
 
 
Generation Plant
3.19%
 
20
 
$
3,065

 
$
2,667

Transmission Plant
1.69%
 
37
 
1,060

 
1,010

Distribution Plant
1.56%
 
31
 
1,784

 
1,692

General Plant
5.89%
 
20
 
477

 
409

Intangible Plant, Software Costs, and Other (1)
Various
 
Various
 
271

 
239

Plant Held for Future Use
—
 
—
 
7

 
3

Total Plant in Service (2)
 
 
 
 
$
6,664

 
$
6,020

(1) 
Primarily represents computer software. Unamortized computer software costs were $78 million and $73 million as of December 31, 2019 and 2018, respectively. Amortized computer software costs were $26 million in 2019, $24 million in 2018, and $19 million in 2017. Computer software is being amortized over its expected useful life ranging from three to five years for smaller application software and average remaining life of three years for large enterprise software.
(2) 
Includes plant acquisition adjustments of $(211) million and $(134) million as of December 31, 2019 and 2018, respectively.
(3) 
Based on the 2015 depreciation study available for the major classes of Plant in Service, effective March 1, 2017, as approved by the ACC as part of the 2017 TEP Rate Order. TEP implemented new depreciation rates for Transmission Plant, based on the 2018 depreciation study, effective August 1, 2019, as approved in the 2019 FERC Rate Case.
Gila River Unit 2
In 2017, TEP entered into a 20-year tolling PPA with SRP to purchase and receive all 550 MW of capacity, power, and ancillary services from Gila River Unit 2, which included a three-year option to purchase the unit. The Tolling PPA was accounted for as a finance lease. See Note 8 for additional information regarding TEP's leases. In December 2019, TEP completed its purchase of Gila River Unit 2 for $165 million. The purchase increased Plant in Service and Material and Supplies and decreased Utility Plant Under Finance Leases on the Consolidated Balance Sheets as of December 31, 2019.
RICE Units
Under the air permit approved by the Pima County Department of Environmental Quality, TEP placed in service five natural gas RICE units in December 2019. As a result, Plant in Service on the Consolidated Balance Sheets increased by $82 million. An additional five units are scheduled to be placed in service in the first quarter of 2020. The 10 units have a planned total nominal generation capacity of 188 MW.
JOINTLY-OWNED FACILITIES
As of December 31, 2019, TEP was a participant in the following jointly-owned generation facilities and transmission systems:
(in millions)
Ownership Percentage
 
Plant in Service
 
Construction Work in Progress
 
Accumulated Depreciation
 
Net Book Value
San Juan Unit 1
50.0%
 
$
289

 
$
1

 
$
(193
)
 
$
97

Four Corners Units 4 and 5
7.0%
 
175

 
5

 
(77
)
 
103

Luna
33.3%
 
57

 
—

 
(1
)
 
56

Gila River Unit 3
75.0%
 
200

 
2

 
(61
)
 
141

Gila River Common Facilities
43.8%
 
71

 
—

 
(23
)
 
48

Springerville Coal Handling Facilities
83.0%
 
208

 
—

 
(90
)
 
118

Transmission Facilities
Various
 
545

 
5

 
(295
)
 
255

Total
 
 
$
1,545

 
$
13

 
$
(740
)
 
$
818


As participants in these jointly-owned facilities, TEP is responsible for its share of operating and capital costs for the above facilities. The Company accounts for its share of operating expenses and utility plant costs related to these facilities using proportionate consolidation.
ASSET RETIREMENT OBLIGATIONS
The liability accrual of AROs is primarily related to generation and PV assets and is included in Other on the Consolidated Balance Sheets. The following table reconciles the beginning and ending aggregate carrying amounts of ARO accruals on the Consolidated Balance Sheets:
 
December 31,
(in millions)
2019
 
2018
Beginning of Period
$
72

 
$
46

Liabilities Incurred
—

 
10

Liabilities Settled (1)
(2
)
 
—

Regulatory Deferral/Accretion Expense
2

 
3

Revisions to the Present Value of Estimated Cash Flows (2)
35

 
13

End of Period
$
107

 
$
72

(1) 
Primarily related to the retirement of Navajo.
(2) 
Primarily related to changes due to revised estimates of the timing of cash flows required to settle future liabilities of certain generation facilities.