Asset Retirement Obligations

12 Months Ended

Dec. 31, 2021

Asset Retirement Obligation Disclosure [Abstract]

In 2021, APS revised its cost estimates for existing AROs at Cholla related to updated estimates for the closure of ponds and facilities, which resulted in an increase to the ARO of approximately $28 million. See additional details in Notes 4 and 11.

In 2020, APS revised its cost estimates for existing AROs at Cholla relating to updated estimates for the closure of ponds and facilities, and at Four Corners and the Navajo Plant relating to corrective action and water monitoring costs, which resulted in an increase to the ARO of $6 million. Also in 2020, an updated Four Corners decommissioning study was finalized for the updated closure date of 2031, which resulted in an increase to the ARO of $13 million.

The following table shows the change in our AROs (dollars in thousands):


	2021		2020
Asset retirement obligations at the beginning of year	$	705,083	$	657,218
Changes attributable to:
Accretion expense	38,437		38,652
Settlements	(4,111)		(9,710)

Estimated cash flow revisions	27,973		18,923
Asset retirement obligations at the end of year	$	767,382	$	705,083

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