Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2024

Schedule of Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the fair value at December 31, 2024, of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands):


	Level 1		Level 2		Level 3		Other			Total
ASSETS
Cash equivalents	$	23	$	—	$	—	$	—		$	23
Risk management activities — derivative instruments:
Commodity contracts	—		13,152		7,176		(3,770)		(a)	16,558

Nuclear decommissioning trusts:
Equity securities	11,859		542		—		3,335		(b)	15,736
U.S. commingled equity funds	—		—		—		423,069		(c)	423,069
U.S. Treasury debt	367,396		—		—		—			367,396
Corporate debt	—		203,180		—		—			203,180
Mortgage-backed securities	—		208,533		—		—			208,533
Municipal bonds	—		37,429		—		—			37,429
Other fixed income	—		27,502		—		—			27,502
Subtotal nuclear decommissioning trusts	379,255		477,186		—		426,404			1,282,845

Other special use funds:
Cash equivalents	25,000		—		—		—		(d)	$	25,000
Equity securities	24,962		—		—		2,851		(b,d)	27,813
U.S. Treasury debt	355,544		—		—		—			355,544

Subtotal other special use funds (d)	405,506		—		—		2,851			408,357

Total assets	$	784,784	$	490,338	$	7,176	$	425,485		$	1,707,783

LIABILITIES
Risk management activities — derivative instruments:
Commodity contracts	$	—	$	(40,388)	$	(22,215)	$	817	(a)	$	(61,786)

(a)Represents counterparty netting, margin, and collateral. See Note 15.

(b)Represents net pending securities sales and purchases.

(c)Valued using NAV as a practical expedient and, therefore, are not classified in the fair value hierarchy.

(d)All amounts relate to APS, with the exception of $34.2 million related to Pinnacle West’s Captive investments that are classified within Level 1, $25.0 million in cash equivalents and $9.2 million related to equity securities. See Note 17.

The following table presents the fair value at December 31, 2023, of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands):


	Level 1		Level 2		Level 3		Other			Total
ASSETS
Cash equivalents	$	10	$	—	$	—	$	—		$	10
Risk management activities — derivative instruments:
Commodity contracts	—		1,881		6,616		(1,689)		(a)	6,808


Nuclear decommissioning trusts:
Equity securities	11,064		—		—		(767)		(b)	10,297
U.S. commingled equity funds	—		—		—		409,616		(c)	409,616
U.S. Treasury debt	319,734		—		—		—			319,734
Corporate debt	—		188,317		—		—			188,317
Mortgage-backed securities	—		208,306		—		—			208,306
Municipal bonds	—		59,323		—		—			59,323
Other fixed income	—		5,653		—		—			5,653
Subtotal nuclear decommissioning trusts	330,798		461,599		—		408,849			1,201,246

Other special use funds:
Equity securities	40,991		—		—		2,196		(b)	43,187
U.S. Treasury debt	319,594		—		—		—			319,594

Subtotal other special use funds	360,585		—		—		2,196			362,781

Total assets	$	691,393	$	463,480	$	6,616	$	409,356		$	1,570,845
LIABILITIES
Risk management activities — derivative instruments:
Commodity contracts	$	—	$	(127,016)	$	(1,695)	$	4,823	(a)	$	(123,888)

(a)Represents counterparty netting, margin, and collateral. See Note 15.

(b)Represents net pending securities sales and purchases.

(c)Valued using NAV as a practical expedient and, therefore, are not classified in the fair value hierarchy.

The following table shows the changes in fair value for our risk management activities’ assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs (dollars in thousands):


	Year Ended December 31,
Commodity Contracts		2024		2023
Balance at beginning of period		$	4,921	$	(4,888)
Total net losses realized/unrealized:


Deferred as a regulatory asset or liability		(60,965)		(70,214)
Settlements		44,156		69,706
Transfers into Level 3 from Level 2		(4,635)		(1,289)
Transfers from Level 3 into Level 2		1,484		11,606
Balance at end of period		$	(15,039)	$	4,921
Net unrealized gains/losses included in earnings related to instruments still held at end of period		$	—	$	—

Schedule of Fair Value Measurement Inputs and Valuation Techniques

The following tables provide information regarding our significant unobservable inputs used to value our risk management derivative Level 3 instruments at December 31, 2024, and December 31, 2023:


	December 31, 2024 Fair Value (thousands)				Valuation	Significant				Weighted-Average
Commodity Contracts	Assets		Liabilities		Technique	Unobservable Input	Range			(b)

Electricity Forward Contracts (a)	$	708	$	21,890	Discounted cash flows	Electricity forward price (per MWh)	$25.25	-	$151.11	$106.06





Natural Gas Forward Contracts (a)	6,468		325		Discounted cash flows	Natural gas forward price (per MMBtu)	$(0.89)	-	$1.47	$0.71
Total	$	7,176	$	22,215

(a)Includes swaps and physical and financial contracts.

(b)Unobservable inputs were weighted by the relative fair value of the instrument.


	December 31, 2023 Fair Value (thousands)				Valuation	Significant					Weighted-Average
Commodity Contracts	Assets		Liabilities		Technique	Unobservable Input	Range				(b)

Electricity Forward Contracts (a)	$	6,587	$	658	Discounted cash flows	Electricity forward price (per MWh)	$	37.79	-	$259.04	$158.08

Natural Gas Forward Contracts (a)	29		1,037		Discounted cash flows	Natural gas forward price (per MMBtu)	$0.00		-	$0.08	$0.03
Total	$	6,616	$	1,695

(a)Includes swaps and physical and financial contracts.

(b)Unobservable inputs were weighted by the relative fair value of the instrument.