Regulatory Matters (Tables)

12 Months Ended

Dec. 31, 2022

Regulated Operations [Abstract]

Schedule Of Capital Structure And Cost Of Capital, Regulatory Matter

the following proposed capital structure and costs of capital:

	Capital Structure		Cost of Capital
Long-term debt	48.07	%	3.85	%
Common stock equity	51.93	%	10.25	%
Weighted-average cost of capital			7.17	%

the following proposed capital structure and costs of capital:

	Capital Structure		Cost of Capital
Long-term debt	45.3	%	4.10	%
Common stock equity	54.7	%	10.15	%
Weighted-average cost of capital			7.41	%

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 for 2022 and 2021 (dollars in thousands):

	Twelve Months Ended December 31,
	2022		2021
Beginning balance	$	388,148	$	175,835
Deferred fuel and purchased power costs — current period	291,992		256,871
Amounts charged to customers	(219,579)		(44,558)
Ending balance	$	460,561	$	388,148

Schedule of regulatory assets

The detail of regulatory assets is as follows (dollars in thousands):

S		December 31,
	Amortization Through	2022		2021
Pension	(a)	$	637,656	$	509,751
Deferred fuel and purchased power (b) (c)	2023	460,561		388,148
Income taxes — AFUDC equity	2052	179,631		172,393
Ocotillo deferral (e)	2031	138,143		147,650
Retired power plant costs	2033	98,692		114,841
SCR deferral (e) (f)	2031	97,624		105,771
Deferred property taxes	2027	41,057		49,626
Deferred compensation	2036	33,660		33,997
Income taxes — investment tax credit basis adjustment	2056	23,977		24,768
Palo Verde VIEs (Note 17)	2046	20,933		21,094
Active union medical trust	(g)	18,226		1,175
Four Corners cost deferral	2024	15,999		24,075
Navajo coal reclamation	2026	13,862		16,840
Lost fixed cost recovery (b)	2023	9,547		63,889
Loss on reacquired debt	2038	9,468		11,020
Mead-Phoenix transmission line — contributions in aid of construction	2050	9,048		9,380
Tax expense adjustor mechanism (b)	2031	5,845		6,501
Other	Various	8,171		10,592
Total regulatory assets (d)		$	1,822,100	$	1,711,511
Less: current regulatory assets		$	538,879	$	518,524
Total noncurrent regulatory assets		$	1,283,221	$	1,192,987

(a)This asset represents the future recovery of pension benefit obligations and expense through retail rates.  If these costs are disallowed by the ACC, this regulatory asset would be charged to OCI and result in lower future revenues.  As a result of the 2019 Rate Case Decision, the amount authorized for inclusion in rate base was determined using an averaging methodology, which resulted in a reduced return in retail rates. See Note 7 for further discussion.

(b)See “Cost Recovery Mechanisms” discussion above.

(c)Subject to a carrying charge.

(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)Balance includes amounts for future regulatory consideration and amortization period determination.

(f)See “Four Corners SCR Cost Recovery” discussion above.

(g)Collected in retail rates.

Schedule of regulatory liabilities

The detail of regulatory liabilities is as follows (dollars in thousands):

		December 31,
	Amortization Through	2022		2021
Excess deferred income taxes - ACC — Tax Cuts and Jobs Act (a)	2046	$	971,545	$	1,012,448
Excess deferred income taxes - FERC — Tax Cuts and Jobs Act (a)	2058	221,877		229,116
Asset retirement obligations	2057	354,002		614,683
Other postretirement benefits	(d)	270,604		374,816
Removal costs	(c)	106,889		119,580
Deferred fuel and purchased power — mark-to-market (Note 15)	2024	96,367		107,601
Income taxes — change in rates	2051	64,806		67,678
Four Corners coal reclamation	2038	52,592		55,392
Income taxes — deferred investment tax credit	2056	48,035		49,601
Spent nuclear fuel	2027	39,217		45,282
Renewable energy standard (b)	2024	35,720		38,640
FERC transmission true up (b)	2024	22,895		34,303
Property tax deferral (e)	2024	15,521		20,192
Sundance maintenance	2031	16,893		13,797
Demand side management (b)	2023	8,461		5,417
Tax expense adjustor mechanism (b) (e)	N/A	4,835		4,835
Other	Various	3,092		2,103
Total regulatory liabilities		$	2,333,351	$	2,795,484
Less: current regulatory liabilities		$	271,575	$	296,271
Total noncurrent regulatory liabilities		$	2,061,776	$	2,499,213

(a)For purposes of presentation on the Statement of Cash Flows, amortization of the regulatory liabilities for excess deferred income taxes are reflected as “Deferred income taxes” under Cash Flows From Operating Activities.

(b)See “Cost Recovery Mechanisms” discussion above.

(c)In accordance with regulatory accounting, APS accrues removal costs for its regulated assets, even if there is no legal obligation for removal.

(d)See Note 7.

(e)Balance includes amounts for future regulatory consideration and amortization period determination.