Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2016

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 (liability) for 2016 and 2015 (dollars in thousands):

	Year Ended December 31,
	2016			2015
Beginning balance	$	(9,688	)	$	6,926
Deferred fuel and purchased power costs - current period	60,303			(14,997		)
Amounts charged to customers	(38,150		)	(1,617		)
Ending balance	$	12,465		$	(9,688	)

Schedule of regulatory assets

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

S	Amortization Through	December 31, 2016				December 31, 2015
		Current		Non-Current		Current		Non-Current
Pension	(a)	$	—	$	711,059	$	—	$	619,223
Retired power plant costs	2033	9,913		117,591		9,913		127,518
Income taxes - AFUDC equity	2046	6,305		152,118		5,495		133,712
Deferred fuel and purchased power — mark-to-market (Note 16)	2020	—		42,963		71,852		69,697
Four Corners cost deferral	2024	6,689		56,894		6,689		63,582
Income taxes — investment tax credit basis adjustment	2046	2,120		54,356		1,766		48,462
Lost fixed cost recovery	2017	61,307		—		45,507		—
Palo Verde VIEs (Note 18)	2046	—		18,775		—		18,143
Deferred compensation	2036	—		35,595		—		34,751
Deferred property taxes	(d)	—		73,200		—		50,453
Loss on reacquired debt	2038	1,637		16,942		1,515		16,375
AG-1 deferral	2018	—		5,868		—		—
Demand side management (b)	2017	3,744		—		—		—
Tax expense of Medicare subsidy	2024	1,513		10,589		1,520		12,163
Transmission vegetation management	2016	—		—		4,543		—
Mead-Phoenix transmission line CIAC	2050	332		10,708		332		11,040
Deferred fuel and purchased power (b) (c)	2017	12,465		—		—		—
Coal reclamation	2026	418		5,182		418		6,085
Other	Various	432		1,588		5		2,942
Total regulatory assets (e)		$	106,875	$	1,313,428	$	149,555	$	1,214,146

(a) This asset represents the future recovery of pension benefit obligations 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.  See Note 7 for further discussion.

(b) See “Cost Recovery Mechanisms” discussion above.

(c) Subject to a carrying charge.

(d) Per the provision of the 2012 Settlement Agreement.

(e) 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.”

Schedule of regulatory liabilities

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

	Amortization Through	December 31, 2016				December 31, 2015
		Current		Non-Current		Current		Non-Current
Asset retirement obligations	2057	$	—	$	279,976	$	—	$	277,554
Removal costs	(a)	29,899		223,145		39,746		240,367
Other postretirement benefits	(d)	32,662		123,913		34,100		179,521
Income taxes — deferred investment tax credit	2046	4,368		108,827		3,604		97,175
Income taxes - change in rates	2045	1,771		70,898		1,113		72,454
Spent nuclear fuel	2047	—		71,726		3,051		67,437
Renewable energy standard (b)	2017	26,809		—		43,773		4,365
Demand side management (b)	2019	—		20,472		6,079		19,115
Sundance maintenance	2030	—		15,287		—		13,678
Deferred fuel and purchased power (b) (c)	2016	—		—		9,688		—
Deferred gains on utility property	2018	2,063		8,895		2,062		6,001
Four Corners coal reclamation	2031	—		18,248		—		8,920
Other	Various	2,327		7,529		2,550		7,565
Total regulatory liabilities		$	99,899	$	948,916	$	145,766	$	994,152

(a) In accordance with regulatory accounting guidance, APS accrues for removal costs for its regulated assets, even if there is no legal obligation for removal (see Note 11).

(b) See “Cost Recovery Mechanisms” discussion above.

(c) Subject to a carrying charge.

(d) See Note 7.