Revenue

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Sources of Revenue

We derive our revenues from contracts with customers primarily from sales of electricity to our regulated retail customers. Our retail electric services and tariff rates are regulated by the ACC. Revenues from wholesale energy sales and transmission services for others represent energy and transmission sales to wholesale customers. Our wholesale activities and tariff rates are regulated by the United States Federal Energy Regulatory Commission ("FERC").

The following table provides detail of Pinnacle West's consolidated revenue disaggregated by revenue sources (dollars in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Retail residential electric service	$	432,568	$	500,247	$	784,134	$	816,922
Retail non-residential electric service	395,929		435,500		728,597		778,689
Wholesale energy sales	21,991		15,392		58,443		27,481
Transmission services for others	15,157		15,489		30,406		30,334
Other sources	3,856		7,495		8,451		13,411
Total operating revenues	$	869,501	$	974,123	$	1,610,031	$	1,666,837

Revenue Activities

Our revenues are primarily derived from activities that are classified as revenues from contracts with customers. This includes sales of electricity to our regulated retail customers and wholesale and transmission activities. Our revenues from contracts with customers for the three and six months ended June 30, 2019 were $858 million and $1,578 million, and for the three and six months ended June 30, 2018 were $954 million and $1,640 million, respectively.

We have certain revenues that do not meet the specific accounting criteria to be classified as revenues from contracts with customers. For the three and six months ended June 30, 2019, our revenues that do not qualify as revenue from contracts with customers were $12 million and $32 million, and for the three and six months ended June 30, 2018 were $20 million and $27 million, respectively. This relates primarily to certain regulatory cost recovery mechanisms that are considered alternative revenue programs. We recognize revenue associated with alternative revenue programs when specific events permitting recognition are completed. Certain amounts associated with alternative revenue programs will subsequently be billed to customers; however, we do not reclassify billed amounts into revenue from contracts with customers. See Note 4 for a discussion of our regulatory cost recovery mechanisms.

Contract Assets and Liabilities from Contracts with Customers

There were no material contract assets, contract liabilities, or deferred contract costs recorded on the Condensed Consolidated Balance Sheets as of June 30, 2019 or December 31, 2018.