Retirement Plans and Other Benefits (Tables)

12 Months Ended

Dec. 31, 2017

Retirement Benefits [Abstract]

Schedule of net periodic benefit costs and the portion of these costs charged to expense (including administrative costs and excluding amounts capitalized as overhead construction, billed to electric plant participants or charged or amortized to the regulatory asset)

The following table provides details of the plans’ net periodic benefit costs and the portion of these costs charged to expense (including administrative costs and excluding amounts capitalized as overhead construction, billed to electric plant participants or charged to the regulatory asset or liability) (dollars in thousands):

	Pension									Other Benefits
	2017			2016			2015			2017			2016			2015
Service cost-benefits earned during the period	$	54,858		$	53,792		$	59,627		$	17,119		$	14,993		$	16,827
Interest cost on benefit obligation	129,756			131,647			123,983			29,959			29,721			28,102
Expected return on plan assets	(174,271		)	(173,906		)	(179,231		)	(53,401		)	(36,495		)	(36,855		)
Amortization of:
Prior service cost (credit)	81			527			594			(37,842		)	(37,883		)	(37,968		)
Net actuarial loss	47,900			40,717			31,056			5,118			4,589			4,881
Net periodic benefit cost	$	58,324		$	52,777		$	36,029		$	(39,047	)	$	(25,075	)	$	(25,013	)
Portion of cost charged to expense	$	27,295		$	26,172		$	20,036		$	(18,274	)	$	(12,435	)	$	(10,391	)

Schedule of changes in the benefit obligations and funded status

The following table shows the plans’ changes in the benefit obligations and funded status for the years 2017 and 2016 (dollars in thousands):

	Pension						Other Benefits
	2017			2016			2017			2016
Change in Benefit Obligation
Benefit obligation at January 1	$	3,204,462		$	3,033,803		$	716,445		$	647,020
Service cost	54,858			53,792			17,119			14,993
Interest cost	129,756			131,647			29,959			29,721
Benefit payments	(166,342		)	(142,247		)	(30,144		)	(26,231		)
Actuarial loss	171,452			127,467			20,014			50,942
Benefit obligation at December 31	3,394,186			3,204,462			753,393			716,445
Change in Plan Assets
Fair value of plan assets at January 1	2,675,357			2,542,774			882,651			833,017
Actual return on plan assets	428,374			166,408			139,367			63,463
Employer contributions	100,000			100,000			353			819
Benefit payments	(146,704		)	(133,825		)	—			(14,648		)
Fair value of plan assets at December 31	3,057,027			2,675,357			1,022,371			882,651
Funded Status at December 31	$	(337,159	)	$	(529,105	)	$	268,978		$	166,206

Schedule of projected benefit obligation and the accumulated benefit obligation for pension plans with an accumulated obligation in excess of plan assets

The following table shows the projected benefit obligation and the accumulated benefit obligation for pension plans with an accumulated obligation in excess of plan assets as of December 31, 2017 and 2016 (dollars in thousands):

	2017		2016
Projected benefit obligation	$	3,394,186	$	3,204,462
Accumulated benefit obligation	3,227,233		3,049,406
Fair value of plan assets	3,057,027		2,675,357

Schedule of amounts recognized on the Consolidated Balance Sheets

The following table shows the amounts recognized on the Consolidated Balance Sheets as of December 31, 2017 and 2016 (dollars in thousands):

	Pension						Other Benefits
	2017			2016			2017		2016
Noncurrent asset	$	—		$	—		$	268,978	$	166,206
Current liability	(9,859		)	(19,795		)	—		—
Noncurrent liability	(327,300		)	(509,310		)	—		—
Net amount recognized	$	(337,159	)	$	(529,105	)	$	268,978	$	166,206

Schedule of accumulated other comprehensive loss

The following table shows the details related to accumulated other comprehensive loss as of December 31, 2017 and 2016 (dollars in thousands): 

	Pension						Other Benefits
	2017			2016			2017			2016
Net actuarial loss	$	643,199		$	773,750		$	75,439		$	146,509
Prior service cost (credit)	—			81			(265,575		)	(303,417		)
APS’s portion recorded as a regulatory (asset) liability	(576,188		)	(711,059		)	189,627			156,575
Income tax expense (benefit)	(24,915		)	(24,202		)	853			833
Accumulated other comprehensive loss	$	42,096		$	38,570		$	344		$	500

Schedule of estimated amounts that will be amortized from accumulated other comprehensive loss and regulatory assets into net periodic benefit cost

The following table shows the estimated amounts that will be amortized from accumulated other comprehensive loss and regulatory assets and liabilities into net periodic benefit cost in 2018 (dollars in thousands):

	Pension		Other Benefits
Net actuarial loss	$	28,334	$	—
Prior service credit	—		(37,842		)
Total amounts estimated to be amortized from accumulated other comprehensive loss (gain) and regulatory assets (liabilities) in 2018	$	28,334	$	(37,842	)

Schedule of weighted-average assumptions used for both the pension and other benefits to determine benefit obligations and net periodic benefit costs

The following table shows the weighted-average assumptions used for both the pension and other benefits to determine benefit obligations and net periodic benefit costs:

	Benefit Obligations As of December 31,				Benefit Costs For the Years Ended December 31,
	2017		2016		2017		2016		2015
Discount rate – pension	3.65	%	4.08	%	4.08	%	4.37	%	4.02	%
Discount rate – other benefits	3.71	%	4.17	%	4.17	%	4.52	%	4.14	%
Rate of compensation increase	4.00	%	4.00	%	4.00	%	4.00	%	4.00	%
Expected long-term return on plan assets - pension	N/A		N/A		6.55	%	6.90	%	6.90	%
Expected long-term return on plan assets - other benefits	N/A		N/A		6.05	%	4.45	%	4.45	%
Initial healthcare cost trend rate (pre-65 participants)	7.00	%	7.00	%	7.00	%	7.00	%	7.00	%
Initial healthcare cost trend rate (post-65 participants)	4.75	%	5.00	%	5.00	%	5.00	%	5.00	%
Ultimate healthcare cost trend rate	4.75	%	5.00	%	5.00	%	5.00	%	5.00	%
Number of years to ultimate trend rate (pre-65 participants)	8		4		4		4		4

Schedule of effects of one percentage point change in the assumed initial and ultimate health care cost trend rates

A one percentage point change in the assumed initial and ultimate healthcare cost trend rates would have the following effects on our December 31, 2017 amounts (dollars in thousands): 

	1% Increase		1% Decrease
Effect on other postretirement benefits expense, after consideration of amounts capitalized or billed to electric plant participants	$	8,424	$	(5,616	)
Effect on service and interest cost components of net periodic other postretirement benefit costs	9,145		(7,037		)
Effect on the accumulated other postretirement benefit obligation	128,203		(98,143		)

Schedule of fair value of pension plan and other postretirement benefit plan assets, by asset category

The fair value of Pinnacle West’s pension plan and other postretirement benefit plan assets at December 31, 2016, by asset category, are as follows (dollars in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Other (a)		Balance at December 31, 2016
Pension Plan:
Cash and cash equivalents	$	13,995	$	—	$	—	$	13,995
Fixed income securities:
Corporate	—		1,210,453		—		1,210,453
U.S. Treasury	112,583		—		—		112,583
Other (b)	—		102,170		—		102,170
Common stock equities (c)	235,109		—		—		235,109
Mutual funds (d)	251,506		—		—		251,506
Common and collective trusts:
Equities	—		—		266,840		266,840
Real estate	—		—		161,449		161,449
Partnerships	—		—		208,915		208,915
Short-term investments and other (e)	—		—		112,337		112,337
Total	$	613,193	$	1,312,623	$	749,541	$	2,675,357
Other Benefits:
Cash and cash equivalents	$	304	$	—	$	—	$	304
Fixed income securities:
Corporate	—		268,193		—		268,193
U.S. Treasury	145,255		—		—		145,255
Other (b)	—		34,506		—		34,506
Common stock equities (c)	243,741		—		—		243,741
Mutual funds (d)	67,418		—		—		67,418
Common and collective trusts:
Equities	—		—		95,814		95,814
Real estate	—		—		14,509		14,509
Partnerships	—		—		3,060		3,060
Short-term investments and other (e)	—		—		9,851		9,851
Total	$	456,718	$	302,699	$	123,234	$	882,651

(a) These investments primarily represent assets valued using net asset value as a practical expedient, and have not been classified in the fair value hierarchy.

(b) This category consists primarily of debt securities issued by municipalities.

(c) This category primarily consists of U.S. common stock equities.

(d) These funds invest in U.S. and international common stock equities.

(e) This category includes plan receivables and payable

The following table presents the actual allocations of the investment for the other postretirement benefit plan at December 31, 2017:

	Other Benefits
	Actual Allocation
Long-term fixed income assets	67	%
Return-generating assets	33	%
Total	100	%

Based on the IPS, and given the pension plan's funded status at year-end 2017, the target and actual allocation for the pension plan at December 31, 2017 are as follows:

	Pension
	Target Allocation		Actual Allocation
Long-term fixed income assets	62	%	58	%
Return-generating assets	38	%	42	%
Total	100	%	100	%

The permissible range is within +/- 3% of the target allocation shown in the above table, and also considers the Plan's funded status.

The following table presents the additional target allocations, as a percent of total pension plan assets, for the return-generating assets:

Asset Class	Target Allocation
Equities in US and other developed markets	18	%
Equities in emerging markets	6	%
Alternative investments	14	%
Total	38	%

The fair value of Pinnacle West’s pension plan and other postretirement benefit plan assets at December 31, 2017, by asset category, are as follows (dollars in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Other (a)		Balance at December 31, 2017
Pension Plan:
Cash and cash equivalents	$	3,830	$	—	$	—	$	3,830
Fixed income securities:
Corporate	—		1,365,194		—		1,365,194
U.S. Treasury	221,291		—		—		221,291
Other (b)	—		100,599		—		100,599
Common stock equities (c)	228,088		—		—		228,088
Mutual funds (d)	233,732		—		—		233,732
Common and collective trusts:
Equities	—		—		408,763		408,763
Real estate	—		—		171,569		171,569
Fixed Income	—		—		90,869		90,869
Partnerships	—		—		133,379		133,379
Short-term investments and other (e)	—		1,208		98,505		99,713
Total	$	686,941	$	1,467,001	$	903,085	$	3,057,027
Other Benefits:
Cash and cash equivalents	$	143	$	—	$	—	$	143
Fixed income securities:
Corporate	—		306,008		—		306,008
U.S. Treasury	336,963		—		—		336,963
Other (b)	—		32,508		—		32,508
Common stock equities (c)	196,153		—		—		196,153
Mutual funds (d)	39,269		—		—		39,269
Common and collective trusts:
Equities	—		—		75,310		75,310
Real estate	—		—		15,422		15,422
Short-term investments and other (e)	11,268		149		9,178		20,595
Total	$	583,796	$	338,665	$	99,910	$	1,022,371

(a) These investments primarily represent assets valued using net asset value as a practical expedient, and have not been classified in the fair value hierarchy.

(b) This category consists primarily of debt securities issued by municipalities.

(c) This category primarily consists of U.S. common stock equities.

(d) These funds invest in U.S. and international common stock equities.

(e) This category includes plan receivables and payables.

Schedule of estimated future benefit payments, which reflect estimated future employee service, for the next five years and the succeeding five years thereafter

Benefit payments, which reflect estimated future employee service, for the next five years and the succeeding five years thereafter, are estimated to be as follows (dollars in thousands):

Year	Pension		Other Benefits
2018	$	175,383	$	31,891
2019	181,902		34,000
2020	191,586		35,658
2021	196,583		37,090
2022	201,463		37,860
Years 2023-2027	1,068,568		191,207