XML 43 R31.htm IDEA: XBRL DOCUMENT v3.22.1
Regulatory Matters (Tables)
 3 Months Ended
Mar. 31, 2022
Regulated Operations [Abstract]  
Schedule of capital structure and cost of capital the following proposed capital structure and costs of capital:
  Capital Structure Cost of Capital 
Long-term debt 45.3 %4.10 %
Common stock equity 54.7 %10.15 %
Weighted-average cost of capital   7.41 %
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 for 2022 and 2021 (dollars in thousands):
 
 Three Months Ended
March 31,
 20222021
Beginning balance$388,148 $175,835 
Deferred fuel and purchased power costs — current period6,110 52,210 
Amounts (charged) refunded to customers(39,442)564 
Ending balance$354,816 $228,609 
Schedule of regulatory assets
The detail of regulatory assets is as follows (dollars in thousands): 
 Amortization ThroughMarch 31, 2022December 31, 2021
 CurrentNon-CurrentCurrentNon-Current
Pension(a)$— $506,280 $— $509,751 
Deferred fuel and purchased power (b) (c)2023354,816 — 388,148 — 
Income taxes — allowance for funds used during construction (“AFUDC”) equity20527,625 165,071 7,625 164,768 
Ocotillo deferral (e)20319,507 135,766 9,507 138,143 
Retired power plant costs203315,455 94,902 15,160 99,681 
SCR deferral (e)(f)20318,147 95,588 8,147 97,624 
Lost fixed cost recovery (b)202357,808 — 63,889 — 
Deferred property taxes20278,569 38,915 8,569 41,057 
Deferred compensation2036— 35,355 — 33,997 
Income taxes — investment tax credit basis adjustment2056826 23,899 1,129 23,639 
Four Corners cost deferral20248,077 13,979 8,077 15,998 
Palo Verde VIEs (Note 6)2046— 21,053 — 21,094 
Coal reclamation20262,978 13,118 2,978 13,862 
Loss on reacquired debt20381,648 8,976 1,648 9,372 
Active Union Medical Trust(g)— 10,453 — 1,175 
TCA balancing account (b)20238,205 2,038 170 3,663 
Mead-Phoenix transmission line contributions in aid of construction (“CIAC”)2050332 8,965 332 9,048 
Tax expense adjustor mechanism (b)2031656 5,681 656 5,845 
Tax expense of Medicare subsidy20241,235 2,406 1,235 2,469 
OtherVarious376 1,801 1,254 1,801 
Total regulatory assets (d) $486,260 $1,184,246 $518,524 $1,192,987 

(a)This asset represents the future recovery of pension benefit obligations and expense through retail rates.  If these costs are disallowed by the ACC, this regulatory asset would be charged to OCI and result in lower future revenues.  As a result of the 2019 Rate Case decision, the amount authorized for inclusion in rate base was determined using an averaging methodology, which resulted in a reduced return in retail rates. See Note 5 for further discussion.
(b)See “Cost Recovery Mechanisms” discussion above.
(c)Subject to a carrying charge.
(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.”
(e)Balance includes amounts for future regulatory consideration and amortization period determination.
(f)See “Four Corners SCR Cost Recovery” discussion above.
(g)Collected in retail rates.
Schedule of regulatory liabilities
The detail of regulatory liabilities is as follows (dollars in thousands):
 
 Amortization ThroughMarch 31, 2022December 31, 2021
 CurrentNon-CurrentCurrentNon-Current
Excess deferred income taxes — ACC - Tax Act (a)2046$40,903 $969,459 $40,903 $971,545 
Excess deferred income taxes — FERC - Tax Act (a)20587,239 221,508 7,239 221,877 
Asset retirement obligations2057— 537,720 — 614,683 
Other postretirement benefits(d)37,789 324,697 37,789 337,027 
Deferred fuel and purchased power — mark-to-market (Note 7)2024214,571 91,521 60,693 46,908 
Removal costs(c)69,054 48,302 69,476 50,104 
Income taxes — change in rates20512,876 64,655 2,876 64,802 
Four Corners coal reclamation20382,316 51,629 2,316 53,076 
Income taxes — deferred investment tax credit20562,264 47,253 2,264 47,337 
Spent nuclear fuel20276,631 37,136 6,701 38,581 
Renewable energy standard (b)202330,729 452 38,453 187 
FERC transmission true up (b)202427,595 375 21,379 12,924 
Property tax deferral (e)20244,671 14,353 4,671 15,521 
Sundance maintenance2031— 14,571 — 13,797 
Demand side management (b)20231,111 9,216 — 5,417 
Tax expense adjustor mechanism (b) (e)N/A— 4,835 — 4,835 
OtherVarious1,029 990 1,511 592 
Total regulatory liabilities $448,778 $2,438,672 $296,271 $2,499,213 

(a)For purposes of presentation on the Statement of Cash Flows, amortization of the regulatory liabilities for excess deferred income taxes are reflected as “Deferred income taxes” under Cash Flows From Operating Activities.
(b)See “Cost Recovery Mechanisms” discussion above.
(c)In accordance with regulatory accounting guidance, APS accrues removal costs for its regulated assets, even if there is no legal obligation for removal.
(d)See Note 5.
(e)Balance includes amounts for future regulatory consideration and amortization period determination.