v3.25.1
Regulatory Matters (Tables)
 3 Months Ended
Mar. 31, 2025
Regulated Operations [Abstract]  
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 (dollars in thousands):
 Three Months Ended March 31,
 20252024
Balance at beginning of period$287,597 $463,195 
Deferred fuel and purchased power costs25,228 33,094 
Amounts charged to customers
(84,789)(108,552)
Balance at end of period$228,036 $387,737 
Schedule of Regulatory Assets
The detail of regulatory assets is as follows (dollars in thousands):
Amortization ThroughMarch 31,
2025		December 31,
2024
Pension(a)$739,549 $750,976 
Deferred fuel and purchased power (b) (c)2026228,036 287,597 
Income taxes — allowance for funds used during construction equity2054192,894 192,936 
Ocotillo deferral2034111,064 114,775 
Lease incentives(g)84,483 70,541 
SCR deferral (e)203881,639 83,123 
Retired power plant costs203364,591 68,380 
FERC Transmission true up202744,253 35,159 
Income taxes — investment tax credit basis adjustment205634,839 34,834 
Deferred compensation203634,423 33,108 
Deferred property taxes202721,776 23,918 
Palo Verde VIEs (Note 8)
204620,571 20,611 
Mead-Phoenix transmission line contributions in aid of construction (“CIAC”)20508,301 8,384 
Active Union Medical Trust(f)6,664 9,673 
Loss on reacquired debt20386,425 6,682 
Navajo coal reclamation20265,747 7,905 
Tax expense adjustor mechanism (b)20314,370 4,534 
PSA - interest20261,712 11,525 
Deferred fuel and purchased power — mark-to-market (Note 9)
— 42,275 
OtherVarious3,493 3,522 
Total regulatory assets (d)$1,694,830 $1,810,458 
Less: current regulatory assets$322,070 $420,969 
Total non-current regulatory assets$1,372,760 $1,389,489 

(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 other comprehensive income 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. Subsequently, the 2022 Rate Case decision allowed for the full return on the pension asset in rate base. 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)See “Court Resolution Surcharge” discussion above.
(f)Collected in retail rates.
(g)Amortization periods vary based on specific terms of lease contract.
Schedule of Regulatory Liabilities
The detail of regulatory liabilities is as follows (dollars in thousands):
Amortization ThroughMarch 31,
2025		December 31,
2024
Excess deferred income taxes - ACC — Tax Cuts and Jobs Act (a)2046$889,034 $888,896 
Excess deferred income taxes - FERC — Tax Cuts and Jobs Act (a)2058207,424 207,400 
Asset retirement obligations and removal costs(d)330,787 358,403 
Other postretirement benefits(c)233,978 238,113 
Four Corners coal reclamation203897,532 77,532 
Deferred fuel and purchased power — mark-to-market (Note 9)
202885,540 — 
Renewable energy standard (b)202670,217 68,523 
Income taxes — deferred investment tax credit205666,336 66,327 
Income taxes — change in rates205359,142 59,133 
Demand side management (b)202527,157 23,927 
Spent nuclear fuel202725,355 26,818 
Sundance maintenance203123,860 23,086 
TCA Balancing Account (b)202611,189 14,834 
Property tax deferral20274,238 4,785 
Tax expense adjustor mechanism (b)20324,192 4,343 
OtherVarious115 113 
Total regulatory liabilities$2,136,096 $2,062,233 
Less: current regulatory liabilities$225,332 $206,955 
Total non-current regulatory liabilities$1,910,764 $1,855,278 
(a)For purposes of presentation on the Statements 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)See Note 7.
(d)In accordance with regulatory accounting, APS accrues removal costs for its regulated assets, even if there is no legal obligation for removal.