Retirement Plans and Other Benefits (Tables)

12 Months Ended

Dec. 31, 2011

Retirement Plans and Other Benefits

Net periodic benefit costs and the portion of these costs charged to expense

	Pension									Other Benefits
	2011			2010			2009			2011			2010			2009
Service cost-benefitsearned during theperiod	$	57,605		$	59,064		$	54,288		$	21,856		$	19,236		$	18,285
Interest cost on benefitobligation	124,727			122,724			118,282			46,807			42,428			39,180
Expected return on planassets	(133,678		)	(124,161		)	(116,535		)	(41,536		)	(39,257		)	(34,428		)
Amortization of:
Transitionobligation	—			—			—			452			452			3,005
Prior servicecost (credit)	1,400			1,705			2,080			(179		)	(539		)	(125		)
Net actuarialloss	25,956			18,833			14,216			15,015			10,317			10,320
Net periodic benefitcost	$	76,010		$	78,165		$	72,331		$	42,415		$	32,637		$	36,237
Portion of cost chargedto expense	$	29,312		$	37,933		$	36,484		$	15,208		$	15,839		$	18,278

Schedule of changes in the benefit obligations and funded status

	Pension						Other Benefits
	2011			2010			2011			2010
Change in Benefit Obligation
Benefit obligation at January 1	$	2,345,060		$	2,074,131		$	827,897		$	700,535
Service cost	57,605			59,064			21,856			19,236
Interest cost	124,727			122,724			46,807			42,428
Benefit payments	(104,257		)	(93,776		)	(24,877		)	(20,421		)
Actuarial loss	275,991			183,365			171,674			98,094
Plan amendments	—			(448		)	3,737			(11,975		)
Benefit obligation at December 31	2,699,126			2,345,060			1,047,094			827,897
Change in Plan Assets
Fair value of plan assets atJanuary 1	1,775,596			1,461,808			567,410			490,455
Actual return on plan assets	162,042			190,380			58,367			60,255
Employer contributions	—			200,000			18,769			16,700
Benefit payments	(87,088		)	(76,592		)	(35,883		)	—
Fair value of plan assets atDecember 31	1,850,550			1,775,596			608,663			567,410
Funded Status at December 31	$	(848,576	)	$	(569,464	)	$	(438,431	)	$	(260,487	)

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

	2011		2010
Projected benefit obligation	$	2,699,126	$	2,345,060
Accumulated benefit obligation	2,396,575		2,065,091
Fair value of plan assets	1,850,550		1,775,596

Amounts recognized on the Consolidated Balance Sheets

	Pension						Other Benefits
	2011			2010			2011			2010
Current liability	$	(18,097	)	$	(16,830	)	$	—		$	—
Noncurrent liability	(830,479		)	(552,634		)	(438,431		)	(260,487		)
Net amount recognized	$	(848,576	)	$	(569,464	)	$	(438,431	)	$	(260,487	)

Details related to accumulated other comprehensive loss

	Pension						Other Benefits
	2011			2010			2011			2010
Net actuarial loss	$	724,605		$	502,938		$	400,892		$	261,071
Prior service cost (credit)	4,312			5,712			(655		)	(4,571		)
Transition obligation	—			—			452			903
APS’s portion recorded as a regulatoryasset	(632,099		)	(419,774		)	(390,521		)	(249,255		)
Income tax benefit	(38,243		)	(35,106		)	(3,296		)	(2,498		)
Accumulated other comprehensive loss	$	58,575		$	53,770		$	6,872		$	5,650

Estimated amounts that will be amortized from accumulated other comprehensive loss and regulatory assets into net periodic benefit cost in next fiscal year

	Pension		Other Benefits
Net actuarial loss	$	43,070	$	23,638
Prior service cost (credit)	1,143		(179		)
Transition obligation	—		452
Total amounts estimated to be amortized from accumulated other comprehensive loss and regulatory assets in 2012	$	44,213	$	23,911

Weighted-average assumptions used to determine benefit obligations and net periodic benefit costs

	Benefit ObligationsAs of December 31,				Benefit CostsFor the Years Ended December 31,
	2011		2010		2011		2010		2009
Discount rate-pension	4.42	%	5.31	%	5.31	%	5.90	%	6.11	%
Discount rate-other benefits	4.59	%	5.49	%	5.49	%	6.00	%	6.13	%
Rate of compensationincrease	4.00	%	4.00	%	4.00	%	4.00	%	4.00	%
Expected long-term returnon plan assets	N/A		N/A		7.75	%	8.25	%	8.25	%
Initial health care cost trendrate	7.50	%	8.00	%	8.00	%	8.00	%	8.00	%
Ultimate health care costtrend rate	5.00	%	5.00	%	5.00	%	5.00	%	5.00	%
Number of years to ultimatetrend rate	4		4		4		4		4

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

	1% Increase		1% Decrease
Effect on other postretirement benefits expense, after consideration of amounts capitalized or billed to electric plant participants	$	11	$	(9	)
Effect on service and interest cost components of net periodic other postretirement benefit costs	14		(11		)
Effect on the accumulated other postretirement benefit obligation	187		(148		)

Fair value of Pinnacle West's 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, 2011, by asset category, are as follows (dollars in thousands):

	Quoted Pricesin ActiveMarkets forIdenticalAssets(Level 1)		Significant Other Observable Inputs (Level 2)		Other (a)		Balance at December 31, 2011
Pension Plan:
Assets:
Cash and cash equivalents	$	1,441	$	—	$	—	$	1,441
Fixed Income Securities:
Corporate	—		584,619		—		584,619
U.S. Treasury	207,862		—		—		207,862
Other (b)	—		62,906		—		62,906
Equities:
U.S. Companies	436,393		—		—		436,393
International Companies	118,263		—		—		118,263
Common and collective trusts:
U.S. Equities	—		139,321		—		139,321
International Equities	—		156,407		—		156,407
Real estate	—		106,147		—		106,147
Short-term investments and other	—		29,913		7,278		37,191
Total Pension Plan	$	763,959	$	1,079,313	$	7,278	$	1,850,550
Other Benefits:
Assets:
Cash and cash equivalents	$	160	$	—	$	—	$	160
Fixed Income Securities:
Corporate	—		148,417		—		148,417
U.S. Treasury	103,321		—		—		103,321
Other (b)	—		30,105		—		30,105
Equities:
U.S. Companies	179,235		—		—		179,235
International Companies	22,486		—		—		22,486
Common and collective trusts:
U.S. Equities	—		52,507		—		52,507
International Equities	—		53,504		—		53,504
Real Estate	—		8,446		—		8,446
Short-term investments and other	—		8,516		1,966		10,482
Total Other Benefits	$	305,202	$	301,495	$	1,966	$	608,663

(a)Represents plan receivables and payables.

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

The fair value of Pinnacle West’s pension plan and other postretirement benefit plan assets at December 31, 2010, by asset category, are as follows (dollars in thousands):

	Quoted Pricesin ActiveMarkets forIdenticalAssets(Level 1)		Significant Other Observable Inputs (Level 2)		Other (a)		Balance at December 31, 2010
Pension Plan:
Assets:
Cash and cash equivalents	$	2,375	$	—	$	—	$	2,375
Fixed Income Securities:
Corporate	—		508,946		—		508,946
U.S. Treasury	163,313		—		—		163,313
Other (b)	—		53,358		—		53,358
Equities:
U.S. Companies	462,973		—		—		462,973
International Companies	129,094		—		—		129,094
Other investments	—		5,549		8,071		13,620
Common and collective trusts:
U.S. Equities	—		146,705		—		146,705
International Equities	—		177,114		—		177,114
Real estate	—		92,454		—		92,454
Short-term investments	—		25,644		—		25,644
Total Pension Plan	$	757,755	$	1,009,770	$	8,071	$	1,775,596
Other Benefits:
Assets:
Cash and cash equivalents	$	243	$	—	$	—	$	243
Fixed Income Securities:
Corporate	—		118,660		—		118,660
U.S. Treasury	74,049		—		—		74,049
Other (b)	—		24,456		—		24,456
Equities:
U.S. Companies	179,655		—		—		179,655
International Companies	25,121		—		—		25,121
Other investments	—		365		2,034		2,399
Common and collective trusts:
U.S. Equities	—		54,144		—		54,144
International Equities	—		61,455		—		61,455
Real Estate	—		7,357		—		7,357
Short-term investments	—		19,871		—		19,871
Total Other Benefits	$	279,068	$	286,308	$	2,034	$	567,410

(a)Represents plan receivables and payables.

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

Changes in fair value for assets that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3)

	Year EndedDecember 31, 2010
Common and Collective Trusts — Real Estate	Pension			Other Benefits
Beginning balance at January 1	$	64,212		$	6,504
Actual return on assets still held (a)	(204		)	(23		)
Purchases, sales, and settlements	18,003			45
Transfers in and/or out of Level 3 (b)	(82,011		)	(6,526		)
Ending balance at December 31	$	—		$	—

(a)The return for December 31, 2010 represents the return on assets held as of March 31, 2010, the beginning of the period in which all the assets were transferred out of Level 3.

(b)Transfers into and out of Level 3 are measured at the beginning of the period in which the transfer occurs.  Transfers out of Level 3 during 2010 relate to our Real Estate Common and Collective Trust being transferred to a Level 2 investment.  During 2009 the Real Estate Common and Collective Trust had special redemption restrictions in place, which limited our ability to transact at the trust’s NAV.  During 2010 these special redemption restrictions were lifted, and in 2010 and 2011 we were able to transact at the NAV according to the trust’s contractual redemption policy.

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

Year	Pension		Other Benefits (a)
2012	$	113,075	$	27,610
2013	122,750		30,562
2014	132,302		33,451
2015	141,516		36,489
2016	154,379		39,525
Years 2017-2021	941,377		246,091

(a)The estimated future other benefit payments take into account the Medicare Part D subsidy.