Regulatory Matters (Tables)

3 Months Ended

Mar. 31, 2016

Regulated Operations [Abstract]

Schedule of changes in the deferred fuel and purchased power regulatory asset

The following table shows the changes in the deferred fuel and purchased power regulatory asset (liability) for 2016 and 2015 (dollars in thousands):

	Three Months Ended   March 31,
	2016			2015
Beginning balance	$	(9,688	)	$	6,925
Deferred fuel and purchased power costs — current period	(1,007		)	(17,671		)
Amounts charged to customers	(2,388		)	(5,614		)
Ending balance	$	(13,083	)	$	(16,360	)

Schedule of regulatory assets

The detail of regulatory assets is as follows (dollars in thousands):

	Amortization Through	March 31, 2016				December 31, 2015
		Current		Non-Current		Current		Non-Current
Pension	(a)	$	—	$	610,569	$	—	$	619,223
Retired power plant costs	2033	9,913		125,037		9,913		127,518
Income taxes — allowance for funds used during construction ("AFUDC") equity	2046	5,419		132,149		5,495		133,712
Deferred fuel and purchased power — mark-to-market (Note 6)	2019	86,160		69,708		71,852		69,697
Four Corners cost deferral (b)	2024	6,689		61,910		6,689		63,582
Income taxes — investment tax credit basis adjustment	2045	1,852		48,347		1,766		48,462
Lost fixed cost recovery (b)	2017	48,702		—		45,507		—
Palo Verde VIEs (Note 5)	2046	—		18,311		—		18,143
Deferred compensation	2036	—		35,871		—		34,751
Deferred property taxes	(c)	—		56,589		—		50,453
Loss on reacquired debt	2034	1,515		15,996		1,515		16,375
Tax expense of Medicare subsidy	2024	1,512		12,073		1,520		12,163
Transmission vegetation management	2016	2,272		—		4,543		—
Mead-Phoenix transmission line CIAC	2050	332		10,957		332		11,040
Transmission cost adjustor (b)	2018	3,969		462		—		2,942
Coal reclamation	2026	418		5,495		418		6,085
Other	Various	—		—		5		—
Total regulatory assets (d)		$	168,753	$	1,203,474	$	149,555	$	1,214,146

(a) This asset represents the future recovery of pension benefit obligations through retail rates.  If these costs are disallowed by the ACC, this regulatory asset would be charged to Other Comprehensive Income ("OCI") and result in lower future revenues.  See Note 4 for further discussion.

(b) See "Cost Recovery Mechanisms" discussion above.

(c) Per the provision of the 2012 Settlement Agreement.

(d) There are no regulatory assets for which the ACC has allowed recovery of costs, but not allowed a return by exclusion from rate base.  FERC rates are set using a formula rate as described in "Transmission Rates, Transmission Cost Adjustor and Other Transmission Matters."

Schedule of regulatory liabilities

The detail of regulatory liabilities is as follows (dollars in thousands):

	Amortization Through	March 31, 2016				December 31, 2015
		Current		Non-Current		Current		Non-Current
Asset retirement obligations	2057	$	—	$	289,485	$	—	$	277,554
Removal costs	(a)	32,473		244,724		39,746		240,367
Other postretirement benefits	(d)	34,100		171,029		34,100		179,521
Income taxes — deferred investment tax credit	2045	3,774		96,940		3,604		97,175
Income taxes — change in rates	2046	1,771		71,756		1,113		72,454
Spent nuclear fuel	2047	31		71,235		3,051		67,437
Renewable energy standard (b)	2017	41,518		3,274		43,773		4,365
Demand side management (b)	2017	6,628		19,115		6,079		19,115
Sundance maintenance	2030	—		14,080		—		13,678
Deferred fuel and purchased power (b) (c)	2017	13,083		—		9,688		—
Deferred gains on utility property	2019	2,062		5,501		2,062		6,001
Four Corners coal reclamation	2031	—		14,725		—		8,920
Other	Various	114		7,554		2,550		7,565
Total regulatory liabilities		$	135,554	$	1,009,418	$	145,766	$	994,152

(a) In accordance with regulatory accounting guidance, APS accrues for removal costs for its regulated assets, even if there is no legal obligation for removal.

(b) See "Cost Recovery Mechanisms" discussion above.

(c) Subject to a carrying charge.

(d) See Note 4.