Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2024

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 for 2024 and 2023 (dollars in thousands):

	Year Ended December 31,
	2024		2023
Balance at beginning of period	$	463,195	$	460,561
Deferred fuel and purchased power costs	250,288		549,877
Amounts charged to customers	(425,886)		(547,243)
Balance at end of period	$	287,597	$	463,195

Schedule of Regulatory Assets

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

		December 31,
	Amortization Through	2024		2023
Pension	(a)	$	750,976	$	696,476
Deferred fuel and purchased power (b) (c)	2025	287,597		463,195
Income taxes — AFUDC equity	2054	192,936		189,058
Ocotillo deferral	2034	114,775		128,636
SCR deferral (e)	2038	83,123		89,477
Lease incentives	(g)	70,541		46,615
Retired power plant costs	2033	68,380		83,536
Deferred fuel and purchased power — mark-to-market (Note 15)	2027	42,275		120,214
FERC Transmission true up	2026	35,159		616
Income taxes — investment tax credit basis adjustment	2056	34,834		34,230
Deferred compensation	2036	33,108		33,972
Deferred property taxes	2027	23,918		32,488
Palo Verde VIEs (Note 17)	2046	20,611		20,772
Power supply adjustor - interest	2025	11,525		19,416
Active Union Medical Trust	(f)	9,673		12,747
Mead-Phoenix transmission line contributions in aid of construction (“CIAC”)	2050	8,384		8,716
Navajo coal reclamation	2026	7,905		10,883
Loss on reacquired debt	2038	6,682		7,965
Tax expense adjustor mechanism (b)	2031	4,534		5,190
Four Corners cost deferral	2024	—		7,922
Other	Various	3,522		3,912
Total regulatory assets (d)		$	1,810,458	$	2,016,036
Less: current regulatory assets		$	420,969	$	625,757
Total non-current regulatory assets		$	1,389,489	$	1,390,279

(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. The 2022 Rate Case decision allows for the full return on the pension asset in rate base. See Note 7 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)See “Four Corners SCR Cost Recovery” discussion above.

(f)Collected in retail rates.

(g)Amortization periods vary based on specific terms of lease contract.

Schedule of Regulatory Liabilities

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

		December 31,
	Amortization Through	2024		2023
Excess deferred income taxes - ACC — Tax Cuts and Jobs Act (a)	2046	$	888,896	$	930,344
Excess deferred income taxes - FERC — Tax Cuts and Jobs Act (a)	2058	207,400		214,667
Asset retirement obligations and removal costs	(d)	358,403		486,751
Other postretirement benefits	(c)	238,113		226,726
Four Corners coal reclamation	2038	77,532		68,521
Renewable energy standard (b)	2025	68,523		60,667
Income taxes — deferred investment tax credit	2056	66,327		55,917
Income taxes — change in rates	2053	59,133		43,251
Spent nuclear fuel	2027	26,818		33,154
Demand side management (b)	2025	23,927		14,374
Sundance maintenance	2031	23,086		19,989
TCA Balancing Account (b)	2026	14,834		3,425
Property tax deferral	2027	4,785		10,850
Tax expense adjustor mechanism (b)	2032	4,343		4,835
Other	Various	113		2,317
Total regulatory liabilities		$	2,062,233	$	2,175,788
Less: current regulatory liabilities		$	206,955	$	209,923
Total non-current regulatory liabilities		$	1,855,278	$	1,965,865

(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)See Note 7.

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