During the nine months ended September 30, 2023, the Company revised its cost estimates for existing Asset Retirement Obligations (“ARO”) for the following:

•Cholla coal-fired power plant related to the closure of ponds and facilities, which resulted in an increase to the ARO of approximately $36 million.

•Four Corners coal-fired power plant, which resulted in a decrease of approximately $7 million.

•Navajo coal-fired power plant, which resulted in an increase of approximately $8 million.

•Palo Verde received a new decommissioning study, which resulted in an increase to the ARO in the amount of $33 million, an increase in the plant in service of $34 million and an increase in the regulatory liability of $1 million.

APS battery energy storage systems may have asset retirement obligations for the removal of the asset. As of September 30, 2023, no asset retirement obligations have been recorded relating to these types of assets. We are evaluating these asset removal obligations, but do not expect the obligations will be significant.

The following schedule shows the change in our asset retirement obligations for the nine months ended September 30, 2023 (dollars in thousands):


	2023
Asset retirement obligations at January 1, 2023	$	797,762
Changes attributable to:
Accretion expense	32,763
Settlements	(5,750)
Estimated cash flow revisions	70,405
Asset retirement obligations at September 30, 2023	$	895,180

In accordance with regulatory accounting, APS accrues removal costs for its regulated utility assets, even if there is no legal obligation for removal. See Note 4 for detail of regulatory liabilities.