Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2017

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 2017 and 2016 (dollars in thousands):

	Twelve Months Ended December 31,
	2017		2016
Beginning balance	$	12,465	$	(9,688	)
Deferred fuel and purchased power costs — current period	48,405		60,303
Amounts refunded/(charged) to customers	14,767		(38,150		)
Ending balance	$	75,637	$	12,465

Schedule of regulatory assets

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

S		December 31, 2017				December 31, 2016
	Amortization Through	Current		Non-Current		Current		Non-Current
Pension	(a)	$	—	$	576,188	$	—	$	711,059
Retired power plant costs	2033	27,402		188,843		9,913		117,591
Income taxes - AFUDC equity	2047	3,828		142,852		6,305		152,118
Deferred fuel and purchased power — mark-to-market (Note 16)	2020	52,100		34,845		—		42,963
Four Corners cost deferral	2024	8,077		48,305		6,689		56,894
Income taxes — investment tax credit basis adjustment	2046	1,066		26,218		2,120		54,356
Lost fixed cost recovery (b)	2018	59,844		—		61,307		—
Palo Verde VIEs (Note 18)	2046	—		19,395		—		18,775
Deferred compensation	2036	—		36,413		—		35,595
Deferred property taxes	2027	8,569		74,926		—		73,200
Loss on reacquired debt	2038	1,637		15,305		1,637		16,942
AG-1 deferral	2022	2,654		8,472		—		5,868
Demand side management (b)	2017	—		—		3,744		—
Tax expense of Medicare subsidy	2024	1,236		7,415		1,513		10,589
Mead-Phoenix transmission line CIAC	2050	332		10,376		332		10,708
Deferred fuel and purchased power (b) (c)	2018	75,637		—		12,465		—
Coal reclamation	2026	1,068		12,396		418		5,182
Other	Various	4,638		353		432		1,588
Total regulatory assets (d)		$	248,088	$	1,202,302	$	106,875	$	1,313,428

(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) 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):

		December 31, 2017				December 31, 2016
	Amortization Through	Current		Non-Current		Current		Non-Current
Excess deferred income taxes - Tax Cuts and Jobs Act	(a)	$	—	$	1,520,274	$	—	$	—
Asset retirement obligations	2057	—		332,171		—		279,976
Removal costs	(b)	18,238		209,191		29,899		223,145
Other post retirement benefits	(d)	37,642		151,985		32,662		123,913
Income taxes - deferred investment tax credit	2046	2,164		52,497		4,368		108,827
Income taxes - change in rates	2046	2,573		70,537		1,771		70,898
Spent nuclear fuel	2027	6,924		62,132		—		71,726
Renewable energy standard (c)	2018	23,155		—		26,809		—
Demand side management (c)	2019	3,066		4,921		—		20,472
Sundance maintenance	2030	—		16,897		—		15,287
Deferred gains on utility property	2022	4,423		10,988		2,063		8,895
Four Corners coal reclamation	2038	1,858		18,921		—		18,248
Other	Various	43		2,022		2,327		7,529
Total regulatory liabilities		$	100,086	$	2,452,536	$	99,899	$	948,916

(a) See Note 4. While the majority of the excess deferred tax balance shown is subject to special amortization rules under federal income tax laws, which require amortization of the balance over the remaining regulatory life of the related property, treatment of a portion of the liability, and the month in which pass-through of the excess deferred tax balance will begin is subject to regulatory approval. This approval will be sought through the Company's TEAM adjustor mechanism and FERC filings in 2018. As a result, the Company cannot estimate the amount of this regulatory liability which is expected to reverse within the next 12 months.

(b) 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).

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

(d) See Note 7.