Asset Retirement Obligations

9 Months Ended

Sep. 30, 2014

Asset Retirement Obligation Disclosure [Abstract]

In the first quarter of 2014, an updated Four Corners Units 1-3 coal-fired power plant decommissioning study was finalized and approved and an adjustment to the asset retirement obligation was made in the amount of $24 million.

During the second quarter of 2014, an update to the 2013 decommissioning study was completed for Palo Verde nuclear generation facility to incorporate additional spent fuel related charges resulting in an adjustment to the asset retirement obligation in the amount of $20 million.

The following schedule shows the change in our asset retirement obligations for the nine months ended September 30, 2014 (dollars in millions):



Asset retirement obligations at January 1, 2014	$	347
Changes attributable to:
Accretion expense	18
Settlements	(19		)
Estimated cash flow revisions	44
Asset retirement obligations at September 30, 2014	$	390

Decommissioning activities for Four Corners Units 1-3 began in January 2014; thus, $39 million of the total asset retirement obligation of $390 million at September 30, 2014, is classified as a current liability on the balance sheet.

In accordance with regulatory accounting, APS accrues removal costs for its regulated utility assets, even if there is no legal obligation for removal. See detail of regulatory liabilities in Note 3.