Asset Retirement Obligations

12 Months Ended

Dec. 31, 2019

Asset Retirement Obligation Disclosure [Abstract]

In 2019, APS received updated decommissioning estimates for the Navajo Plant closure in December 2019, which resulted in a decrease to the ARO in the amount of $8 million (see Note 4 for additional information). In addition, APS received a new decommissioning study for Palo Verde. This resulted in a decrease to the ARO in the amount of $89 million, a decrease in plant in service of $80 million and a reduction in the regulatory liability of $9 million.

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 11 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.

The following table shows the change in our asset retirement obligations for 2019 and 2018 (dollars in thousands):



	2019			2018
Asset retirement obligations at the beginning of year	$	726,545		$	679,529
Changes attributable to:
Accretion expense	39,726			36,876
Settlements	(12,591		)	(9,726		)
Estimated cash flow revisions	(96,462		)	2,002
Newly incurred or acquired obligations	—			17,864
Asset retirement obligations at the end of year	$	657,218		$	726,545

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 4.