Regulatory Matters (Tables)
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9 Months Ended |
Sep. 30, 2016 |
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| Regulated Operations [Abstract] |
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| Proposed capital structure and cost of capital |
the following proposed capital structure and costs of capital: | | | | | | | | | Capital Structure | | Cost of Capital | | Long-term debt | | 44.2 | % | 5.13 | % | Common stock equity | | 55.8 | % | 10.50 | % | Weighted-average cost of capital | | | | 8.13 | % |
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| 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 2016 and 2015 (dollars in thousands): | | | | | | | | | | Nine Months Ended
September 30, | | 2016 | | 2015 | Beginning balance | $ | (9,688 | ) | | $ | 6,925 |
| Deferred fuel and purchased power costs — current period | 46,185 |
| | 137 |
| Amounts charged to customers | (28,365 | ) | | (19,284 | ) | Ending balance | $ | 8,132 |
| | $ | (12,222 | ) |
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| Schedule of regulatory assets |
The detail of regulatory assets is as follows (dollars in thousands): | | | | | | | | | | | | | | | | | | | | Amortization Through | | September 30, 2016 | | December 31, 2015 | | | Current | | Non-Current | | Current | | Non-Current | Pension | (a) | | $ | — |
| | $ | 608,312 |
| | $ | — |
| | $ | 619,223 |
| Retired power plant costs | 2033 | | 9,913 |
| | 120,072 |
| | 9,913 |
| | 127,518 |
| Income taxes — allowance for funds used during construction ("AFUDC") equity | 2046 | | 5,419 |
| | 151,451 |
| | 5,495 |
| | 133,712 |
| Deferred fuel and purchased power — mark-to-market (Note 6) | 2019 | | 30,748 |
| | 53,350 |
| | 71,852 |
| | 69,697 |
| Deferred fuel and purchased power (c) (e) | 2017 | | 8,132 |
| | — |
| | — |
| | — |
| Four Corners cost deferral | 2024 | | 6,689 |
| | 58,566 |
| | 6,689 |
| | 63,582 |
| Income taxes — investment tax credit basis adjustment | 2045 | | 1,852 |
| | 46,699 |
| | 1,766 |
| | 48,462 |
| Lost fixed cost recovery (b) | 2017 | | 55,297 |
| | — |
| | 45,507 |
| | — |
| Palo Verde VIEs (Note 5) | 2046 | | — |
| | 18,620 |
| | — |
| | 18,143 |
| Deferred compensation | 2036 | | — |
| | 36,071 |
| | — |
| | 34,751 |
| Deferred property taxes | (c) | | — |
| | 67,547 |
| | — |
| | 50,453 |
| Loss on reacquired debt | 2034 | | 1,592 |
| | 16,521 |
| | 1,515 |
| | 16,375 |
| Tax expense of Medicare subsidy | 2024 | | 1,512 |
| | 10,774 |
| | 1,520 |
| | 12,163 |
| Transmission vegetation management | 2016 | | — |
| | — |
| | 4,543 |
| | — |
| Mead-Phoenix transmission line CIAC | 2050 | | 332 |
| | 10,791 |
| | 332 |
| | 11,040 |
| Transmission cost adjustor (b) | 2018 | | — |
| | 4,687 |
| | — |
| | 2,942 |
| Coal reclamation | 2026 | | 418 |
| | 5,286 |
| | 418 |
| | 6,085 |
| Other | Various | | 316 |
| | 3,403 |
| | 5 |
| | — |
| Total regulatory assets (d) | | | $ | 122,220 |
| | $ | 1,212,150 |
| | $ | 149,555 |
| | $ | 1,214,146 |
|
| | (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 Other Comprehensive Income ("OCI") and result in lower future revenues. See Note 4 for further discussion. |
| | (b) | See "Cost Recovery Mechanisms" discussion above. |
| | (c) | Per the provision of the 2012 Settlement Agreement. |
| | (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." |
| | (e) | Subject to a carrying charge. |
|
| Schedule of regulatory liabilities |
The detail of regulatory liabilities is as follows (dollars in thousands): | | | | | | | | | | | | | | | | | | | | Amortization Through | | September 30, 2016 | | December 31, 2015 | | | Current | | Non-Current | | Current | | Non-Current | Asset retirement obligations | 2057 | | $ | — |
| | $ | 305,862 |
| | $ | — |
| | $ | 277,554 |
| Removal costs | (a) | | 27,626 |
| | 237,885 |
| | 39,746 |
| | 240,367 |
| Other postretirement benefits | (d) | | 33,294 |
| | 146,988 |
| | 34,100 |
| | 179,521 |
| Income taxes — deferred investment tax credit | 2045 | | 3,774 |
| | 93,578 |
| | 3,604 |
| | 97,175 |
| Income taxes — change in rates | 2046 | | 1,771 |
| | 70,233 |
| | 1,113 |
| | 72,454 |
| Spent nuclear fuel | 2047 | | — |
| | 71,884 |
| | 3,051 |
| | 67,437 |
| Renewable energy standard (b) | 2017 | | 28,921 |
| | 1,091 |
| | 43,773 |
| | 4,365 |
| Demand side management (b) | 2017 | | 4,261 |
| | 21,863 |
| | 6,079 |
| | 19,115 |
| Sundance maintenance | 2030 | | — |
| | 14,885 |
| | — |
| | 13,678 |
| Deferred fuel and purchased power (b) (c) | 2017 | | — |
| | — |
| | 9,688 |
| | — |
| Deferred gains on utility property | 2019 | | 2,063 |
| | 9,335 |
| | 2,062 |
| | 6,001 |
| Transmission cost adjustor (b) | 2017 | | 2,077 |
| | — |
| | — |
| | — |
| Four Corners coal reclamation | 2031 | | — |
| | 17,213 |
| | — |
| | 8,920 |
| Other | Various | | 526 |
| | 7,532 |
| | 2,550 |
| | 7,565 |
| Total regulatory liabilities | | | $ | 104,313 |
| | $ | 998,349 |
| | $ | 145,766 |
| | $ | 994,152 |
|
| | (a) | In accordance with regulatory accounting guidance, APS accrues for removal costs for its regulated assets, even if there is no legal obligation for removal. |
| | (b) | See "Cost Recovery Mechanisms" discussion above. |
| | (c) | Subject to a carrying charge. |
|