Asset Retirement Obligations

12 Months Ended

Dec. 31, 2018

Asset Retirement Obligation Disclosure [Abstract]

In 2018, APS recognized an ARO for the removal of hazardous waste containing solar panels at all of our utility scale solar plants, which resulted in an increase to the ARO in the amount of $14 million. In addition, due to the sale of 4CA assets to NTEC in 2018 (see Note 10 for more information on 4CA matters) there was a decrease to the ARO of $9 million. APS recognized an ARO of $7 million for rooftop solar removals in accordance with the obligations included in the customer contracts, which requires APS to remove the panels at the end of the contract life and includes the costs for the disposal of hazardous materials in accordance with environmental regulations. Finally, APS has other ARO adjustments resulting in a net decrease of $1 million.

In 2017, APS received a new decommissioning study for the Navajo Plant. This resulted in an increase to the ARO in the amount of $22 million, an increase in regulatory asset of $2 million and a reduction of the regulatory liability of $20 million.

The following table shows the change in our asset retirement obligations for 2018 and 2017 (dollars in thousands):



	2018			2017
Asset retirement obligations at the beginning of year	$	679,529		$	624,475
Changes attributable to:
Accretion expense	36,876			33,104
Settlements	(9,726		)	—
Estimated cash flow revisions	2,002			21,950
Newly incurred or acquired obligations	17,864			—
Asset retirement obligations at the end of year	$	726,545		$	679,529

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.