v3.26.1
Fair Value Measurements (Tables)
 6 Months Ended
Jun. 30, 2026
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 June 30, 2026 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$103 $— $— $— $103 
Risk management activities — derivative instruments:
Commodity contracts— 1,744 268 (2,007)(a)5 
Nuclear decommissioning trusts:
Equity securities14,214 — — 8,971 (b)23,185 
U.S. commingled equity funds— — — 549,368 (c)549,368 
U.S. Treasury debt394,337 — — — 394,337 
Corporate debt— 250,143 — — 250,143 
Mortgage-backed securities— 213,368 — — 213,368 
Municipal bonds— 18,146 — — 18,146 
Other fixed income— 19,411 — — 19,411 
Subtotal nuclear decommissioning trusts408,551 501,068 — 558,339 1,467,958 
Other special use funds:
Equity securities54,944 — — 6,968 (b)61,912 
U.S. Treasury debt369,957 — — — 369,957 
Subtotal other special use funds (d)424,901 — — 6,968 431,869 
Total assets$833,555 $502,812 $268 $563,300 $1,899,935 
LIABILITIES
Risk management activities — derivative instruments:
Commodity contracts$— $(47,713)$(33,130)$(284)(a)$(81,127)
(a)Represents counterparty netting, margin, and collateral. See Note 10.
(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 $42.2 million related to Pinnacle West’s Captive investments that are classified within Level 1 equity securities and $4.0 million classified as Other equity securities. See
Note 9.
 The following table presents the fair value as of December 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
Risk management activities — derivative instruments:
Commodity contracts$— $19,347 $— $(10,960)(a)$8,387 
Nuclear decommissioning trusts:
Equity securities18,970 — — (3,799)(b)15,171 
U.S. commingled equity funds— — — 500,592 (c)500,592 
U.S. Treasury debt364,943 — — — 364,943 
Corporate debt— 242,176 — — 242,176 
Mortgage-backed securities— 230,695 — — 230,695 
Municipal bonds— 37,572 — — 37,572 
Other fixed income— 23,017 — — 23,017 
Subtotal nuclear decommissioning trusts383,913 533,460 — 496,793 1,414,166 
Other special use funds:
Equity securities62,573 — — 3,199 (b)65,772 
U.S. Treasury debt369,055 — — — 369,055 
Subtotal other special use funds (d)431,628 — — 3,199 434,827 
Total assets$815,541 $552,807 $— $489,032 $1,857,380 
LIABILITIES
Risk management activities — derivative instruments:
Commodity contracts$— $(21,325)$(23,710)$8,399 (a)$(36,636)
(a)Represents counterparty netting, margin, and collateral. See Note 10.
(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 $40.3 million related to Pinnacle West’s Captive investments that are classified within Level 1 equity securities. See Note 9.
The following table shows the changes in fair value for our risk management activities’ assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs (dollars in thousands):
Three Months Ended June 30,Six Months Ended June 30,
Commodity Contracts2026202520262025
Balance at beginning of period$(33,456)$(22,840)$(23,710)$(15,039)
Total net losses realized/unrealized:
Deferred as a regulatory asset or liability(2,285)2,194 (16,862)(3,629)
Settlements885 1,883 5,716 (404)
Transfers into Level 3 from Level 2— (329)— (388)
Transfers from Level 3 into Level 21,994 300 1,994 668 
Balance at end of period$(32,862)$(18,792)$(32,862)$(18,792)
Net unrealized gains/losses included in earnings related to instruments still held at end of period$— $— $— $— 
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 June 30, 2026 and December 31, 2025 (dollars in thousands):

June 30, 2026
 Fair Value 		ValuationSignificantWeighted-Average
Commodity ContractsAssetsLiabilitiesTechniqueUnobservable InputRange (b)
Electricity:
Electricity Forward Contracts (a)$— $23,980 Discounted cash flowsElectricity forward price (per MWh)
$42.50
-
$91.17
$62.82
Natural Gas Forward Contracts (a)268 9,150 Discounted cash flowsNatural gas forward price (per Million British Thermal Units (“MMBtu”))
$(0.59)
-
$0.26
$(0.02)
Total$268 $33,130 
(a)Includes swaps and physical and financial contracts.
(b)Unobservable inputs were weighted by the relative fair value of the instrument.

December 31, 2025
 Fair Value 		ValuationSignificantWeighted-Average
Commodity ContractsAssetsLiabilitiesTechniqueUnobservable InputRange(b)
Electricity Forward Contracts (a)$— $21,913 Discounted cash flowsElectricity forward price (per MWh)$41.51 -$149.37$80.20
Natural Gas Forward Contracts (a)— 1,797 Discounted cash flowsNatural gas forward price (per MMBtu)$(0.07)-$0.36$0.04
Total$— $23,710 
(a)Includes swaps and physical and financial contracts.
(b)Unobservable inputs were weighted by the relative fair value of the instrument.