v3.25.1
Fair Value Measurements (Tables)
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Schedule of Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents the fair value as of March 31, 2025 of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands):

Level 1Level 2Level 3OtherTotal
ASSETS
Cash equivalents$23 $— $— $— $23 
Risk management activities — derivative instruments:
Commodity contracts— 110,047 1,189 (2,311)(a)108,925 
Nuclear decommissioning trusts:
Equity securities11,490 — — 2,690 (b)14,180 
U.S. commingled equity funds— — — 405,263 (c)405,263 
U.S. Treasury debt359,911 — — — 359,911 
Corporate debt— 220,641 — — 220,641 
Mortgage-backed securities— 224,983 — — 224,983 
Municipal bonds— 33,817 — — 33,817 
Other fixed income— 27,306 — — 27,306 
Subtotal nuclear decommissioning trusts371,401 506,747 — 407,953 1,286,101 
Other special use funds:
Equity securities37,234 — — 2,030 (b)39,264 
U.S. Treasury debt376,137 — — — 376,137 
Subtotal other special use funds (d)413,371 — — 2,030 415,401 
Total assets$784,795 $616,794 $1,189 $407,672 $1,810,450 
LIABILITIES
Risk management activities — derivative instruments:
Commodity contracts$— $(1,667)$(24,029)$(1,880)(a)$(27,576)
(a)Represents counterparty netting, margin, and collateral. See Note 9.
(b)Represents net pending securities sales and purchases.
(c)Valued using NAV as a practical expedient and, therefore, are not classified in the fair value hierarchy.
(d)All amounts relate to APS, with the exception of $35.1 million related to Pinnacle West’s Captive investments that are classified within Level 1, $10.0 million related to equity securities and $25.1 million related to U.S. treasury debt. See Note 8.
 The following table presents the fair value at December 31, 2024 of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands):
 
Level 1Level 2Level 3OtherTotal
ASSETS
Cash equivalents$23 $— $— $— $23 
Risk management activities — derivative instruments:
Commodity contracts— 13,152 7,176 (3,770)(a)16,558 
Nuclear decommissioning trusts:
Equity securities11,859 542 — 3,335 (b)15,736 
U.S. commingled equity funds— — — 423,069 (c)423,069 
U.S. Treasury debt367,396 — — — 367,396 
Corporate debt— 203,180 — — 203,180 
Mortgage-backed securities— 208,533 — — 208,533 
Municipal bonds— 37,429 — — 37,429 
Other fixed income— 27,502 — — 27,502 
Subtotal nuclear decommissioning trusts379,255 477,186 — 426,404 1,282,845 
Other special use funds:
Cash equivalents25,000 — — — (d)25,000 
Equity securities24,962 — — 2,851 (b) (d)27,813 
U.S. Treasury debt355,544 — — — 355,544 
Subtotal other special use funds (d)405,506 — — 2,851 408,357 
Total assets$784,784 $490,338 $7,176 $425,485 $1,707,783 
LIABILITIES
Risk management activities — derivative instruments:
Commodity contracts$— $(40,388)$(22,215)$817 (a)$(61,786)
(a)Represents counterparty netting, margin, and collateral. See Note 9.
(b)Represents net pending securities sales and purchases.
(c)Valued using NAV as a practical expedient and, therefore, are not classified in the fair value hierarchy.
(d)All amounts relate to APS, with the exception of $34.2 million related to Pinnacle West’s Captive investments that are classified within Level 1, $25.0 million in cash equivalents and $9.2 million related to equity securities. See Note 8.
The following table shows the changes in fair value for our risk management activities’ assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs (dollars in thousands):

 Three Months Ended March 31,
Commodity Contracts20252024
Balance at beginning of period$(15,039)$4,921 
Total net losses realized/unrealized:
Deferred as a regulatory asset or liability(5,823)(23,600)
Settlements(2,287)2,708 
Transfers into Level 3 from Level 2(59)— 
Transfers from Level 3 into Level 2368 — 
Balance at end of period$(22,840)$(15,971)
Net unrealized gains/losses included in earnings related to instruments still held at end of period$— $— 
Schedule of Fair Value Measurement Inputs and Valuation Techniques
The following tables provide information regarding our significant unobservable inputs used to value our risk management derivative Level 3 instruments as of March 31, 2025 and December 31, 2024:

March 31, 2025
 Fair Value (thousands) 		ValuationSignificantWeighted-Average
Commodity ContractsAssetsLiabilitiesTechniqueUnobservable InputRange (b)
Electricity Forward Contracts (a)$703 $23,218 Discounted cash flowsElectricity forward price (per MWh)
$26.23
-
$151.56
$90.74
Natural Gas Forward Contracts (a)486 811 Discounted cash flowsNatural gas forward price (per MMBtu)
$(1.92)
-
$0.09
$0.02
Total$1,189 $24,029 
(a)Includes swaps and physical and financial contracts.
(b)Unobservable inputs were weighted by the relative fair value of the instrument.

December 31, 2024
 Fair Value (thousands) 		ValuationSignificantWeighted-Average
Commodity ContractsAssetsLiabilitiesTechniqueUnobservable InputRange(b)
Electricity Forward Contracts (a)$708 $21,890 Discounted cash flowsElectricity forward price (per MWh)$25.25 -$151.11$106.06
Natural Gas Forward Contracts (a)6,468 325 Discounted cash flowsNatural gas forward price (per MMBtu)$(0.89)-$1.47$0.71
Total$7,176 $22,215 
(a)Includes swaps and physical and financial contracts.
(b)Unobservable inputs were weighted by the relative fair value of the instrument.