Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 17, 2021 | Jun. 30, 2020 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-8962 | ||
Entity Registrant Name | PINNACLE WEST CAPITAL CORPORATION | ||
Entity Tax Identification Number | 86-0512431 | ||
Entity Address, Address Line One | 400 North Fifth Street, P.O. Box 53999 | ||
Entity Address, City or Town | Phoenix | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85072-3999 | ||
City Area Code | (602) | ||
Local Phone Number | 250-1000 | ||
Title of 12(b) Security | Common Stock,No Par Value | ||
Trading Symbol | PNW | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 8,231,813,171 | ||
Entity Common Stock, Shares Outstanding | 112,691,601 | ||
Documents Incorporated by Reference | Portions of Pinnacle West Capital Corporation’s definitive Proxy Statement relating to its Annual Meeting of Shareholders to be held on May 19, 2021 are incorporated by reference into Part III hereof. | ||
Entity Central Index Key | 0000764622 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State or Country Code | AZ | ||
ARIZONA PUBLIC SERVICE COMPANY | |||
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 1-4473 | ||
Entity Registrant Name | ARIZONA PUBLIC SERVICE COMPANY | ||
Entity Tax Identification Number | 86-0011170 | ||
Entity Address, Address Line One | 400 North Fifth Street, P.O. Box 53999 | ||
Entity Address, City or Town | Phoenix | ||
Entity Address, State or Province | AZ | ||
Entity Address, Postal Zip Code | 85072-3999 | ||
City Area Code | (602) | ||
Local Phone Number | 250-1000 | ||
Title of 12(g) Security | Common Stock | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 71,264,947 | ||
Documents Incorporated by Reference | Arizona Public Service Company meets the conditions set forth in General Instruction I(1)(a) and (b) of Form 10-K and is therefore filing this form with the reduced disclosure format allowed under that General Instruction. | ||
Entity Central Index Key | 0000007286 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Incorporation, State or Country Code | AZ |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
OPERATING REVENUES (NOTE 2) | $ 3,586,982 | $ 3,471,209 | $ 3,691,247 |
OPERATING EXPENSES | |||
Fuel and purchased power | 993,419 | 1,042,237 | 1,076,116 |
Operations and maintenance | 958,910 | 941,616 | 1,036,744 |
Depreciation and amortization | 614,378 | 590,929 | 582,354 |
Taxes other than income taxes | 224,835 | 218,579 | 212,849 |
Other expenses | 7,288 | 5,888 | 9,497 |
Total | 2,798,830 | 2,799,249 | 2,917,560 |
Operating loss | 788,152 | 671,960 | 773,687 |
OTHER INCOME (DEDUCTIONS) | |||
Allowance for equity funds used during construction (Note 1) | 33,776 | 31,431 | 52,319 |
Pension and other postretirement non-service credits - net (Note 8) | 56,341 | 22,989 | 49,791 |
Other income (Note 17) | 56,703 | 50,263 | 24,896 |
Other expense (Note 17) | (57,776) | (17,880) | (17,966) |
Total | 89,044 | 86,803 | 109,040 |
INTEREST EXPENSE | |||
Interest charges | 247,501 | 235,251 | 243,465 |
Allowance for borrowed funds used during construction (Note 1) | (18,530) | (18,528) | (25,180) |
Total | 228,971 | 216,723 | 218,285 |
INCOME BEFORE INCOME TAXES | 648,225 | 542,040 | 664,442 |
Income tax benefit | 78,173 | (15,773) | 133,902 |
NET INCOME | 570,052 | 557,813 | 530,540 |
Less: Net income attributable to noncontrolling interests (Note 18) | 19,493 | 19,493 | 19,493 |
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 550,559 | $ 538,320 | $ 511,047 |
Net effect of dilutive securities: | |||
Weighted Average common shares outstanding — basic (in shares) | 112,666 | 112,443 | 112,129 |
Weighted Average common shares outstanding — diluted (in shares) | 112,942 | 112,758 | 112,550 |
EARNINGS PER WEIGHTED-AVERAGE COMMON SHARE OUTSTANDING | |||
Net income attributable to common shareholders - basic (in dollars per share) | $ 4.89 | $ 4.79 | $ 4.56 |
Net income attributable to common shareholders — diluted (in dollars per share) | $ 4.87 | $ 4.77 | $ 4.54 |
ARIZONA PUBLIC SERVICE COMPANY | |||
OPERATING REVENUES (NOTE 2) | $ 3,586,982 | $ 3,471,209 | $ 3,688,342 |
OPERATING EXPENSES | |||
Fuel and purchased power | 993,419 | 1,042,237 | 1,094,020 |
Operations and maintenance | 945,181 | 926,716 | 969,227 |
Depreciation and amortization | 614,293 | 590,844 | 580,694 |
Taxes other than income taxes | 224,790 | 218,540 | 212,136 |
Other expenses | 7,288 | 5,888 | 2,497 |
Total | 2,784,971 | 2,784,225 | 2,858,574 |
Operating loss | 802,011 | 686,984 | 829,768 |
OTHER INCOME (DEDUCTIONS) | |||
Allowance for equity funds used during construction (Note 1) | 33,776 | 31,431 | 52,319 |
Pension and other postretirement non-service credits - net (Note 8) | 57,359 | 24,529 | 51,242 |
Other income (Note 17) | 51,755 | 46,884 | 22,746 |
Other expense (Note 17) | (53,694) | (12,990) | (15,292) |
Total | 89,196 | 89,854 | 111,015 |
INTEREST EXPENSE | |||
Interest charges | 233,452 | 220,174 | 231,391 |
Allowance for borrowed funds used during construction (Note 1) | (18,530) | (18,528) | (25,180) |
Total | 214,922 | 201,646 | 206,211 |
INCOME BEFORE INCOME TAXES | 676,285 | 575,192 | 734,572 |
Income tax benefit | 88,764 | (9,572) | 144,814 |
NET INCOME | 587,521 | 584,764 | 589,758 |
Less: Net income attributable to noncontrolling interests (Note 18) | 19,493 | 19,493 | 19,493 |
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 568,028 | $ 565,271 | $ 570,265 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
NET INCOME | $ 570,052 | $ 557,813 | $ 530,540 |
Derivative instruments: | |||
Net unrealized loss, net of tax benefit (expense) | (2,089) | 0 | (78) |
Reclassification of net realized gain, net of tax expense | 592 | 1,137 | 1,527 |
Pension and other postretirement benefits activity, net of tax benefit (expense) | (4,203) | (10,525) | 4,397 |
Total other comprehensive income (loss) | (5,700) | (9,388) | 5,846 |
COMPREHENSIVE INCOME | 564,352 | 548,425 | 536,386 |
Less: Comprehensive income attributable to noncontrolling interests | 19,493 | 19,493 | 19,493 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | 544,859 | 528,932 | 516,893 |
ARIZONA PUBLIC SERVICE COMPANY | |||
NET INCOME | 587,521 | 584,764 | 589,758 |
Derivative instruments: | |||
Net unrealized loss, net of tax benefit (expense) | (18) | 0 | (78) |
Reclassification of net realized gain, net of tax expense | 592 | 1,137 | 1,527 |
Pension and other postretirement benefits activity, net of tax benefit (expense) | (5,970) | (9,552) | 3,465 |
Total other comprehensive income (loss) | (5,396) | (8,415) | 4,914 |
COMPREHENSIVE INCOME | 582,125 | 576,349 | 594,672 |
Less: Comprehensive income attributable to noncontrolling interests | 19,493 | 19,493 | 19,493 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 562,632 | $ 556,856 | $ 575,179 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net unrealized loss, tax benefit (expense) | $ 662 | $ 0 | $ (78) |
Reclassification of net realized gain, tax expense | 171 | 375 | 473 |
Pension and other postretirement benefits activity, tax benefit (expense) | 1,371 | 3,452 | (1,585) |
ARIZONA PUBLIC SERVICE COMPANY | |||
Net unrealized loss, tax benefit (expense) | (18) | 0 | (78) |
Reclassification of net realized gain, tax expense | (171) | (375) | (473) |
Pension and other postretirement benefits activity, tax benefit (expense) | $ 1,955 | $ 3,136 | $ (1,159) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 59,968 | $ 10,283 |
Customer and other receivables | 313,576 | 266,426 |
Accrued unbilled revenues | 132,197 | 128,165 |
Allowance for doubtful accounts | (19,782) | (8,171) |
Materials and supplies (at average cost) | 314,745 | 331,091 |
Fossil fuel (at average cost) | 19,552 | 14,829 |
Income tax receivable (Note 5) | 6,792 | 21,727 |
Assets from risk management activities (Note 16) | 2,931 | 515 |
Deferred fuel and purchased power regulatory asset (Note 4) | 175,835 | 70,137 |
Other regulatory assets (Note 4) | 115,878 | 133,070 |
Other current assets | 76,627 | 61,958 |
Total current assets | 1,198,319 | 1,030,030 |
INVESTMENTS AND OTHER ASSETS | ||
Nuclear decommissioning trust (Notes 13 and 19) | 1,138,435 | 1,010,775 |
Other special use funds (Notes 13 and 19) | 254,509 | 245,095 |
Other assets | 92,922 | 96,953 |
Total investments and other assets | 1,485,866 | 1,352,823 |
PROPERTY, PLANT AND EQUIPMENT (Notes 1, 7 and 10) | ||
Plant in service and held for future use | 20,837,885 | 19,836,292 |
Accumulated depreciation and amortization | (7,110,310) | (6,637,857) |
Net | 13,727,575 | 13,198,435 |
Construction work in progress | 937,384 | 808,133 |
Palo Verde sale leaseback, net of accumulated depreciation | 98,036 | 101,906 |
Intangible assets, net of accumulated amortization | 282,570 | 290,564 |
Nuclear fuel, net of accumulated amortization | 113,645 | 123,500 |
Total property, plant and equipment | 15,159,210 | 14,522,538 |
DEFERRED DEBITS | ||
Regulatory assets (Notes 1, 4 and 5) | 1,133,987 | 1,304,073 |
Operating lease right-of-use assets (Note 9) | 505,064 | 145,813 |
Assets for pension and other postretirement benefits (Note 8) | 502,992 | 90,570 |
Other | 34,983 | 33,400 |
Total deferred debits | 2,177,026 | 1,573,856 |
Total Assets | 20,020,421 | 18,479,247 |
CURRENT LIABILITIES | ||
Accounts payable | 318,585 | 346,448 |
Accrued taxes | 159,551 | 144,899 |
Accrued interest | 56,962 | 53,534 |
Common dividends payable | 93,531 | 87,982 |
Short-term borrowings (Note 6) | 169,000 | 114,675 |
Current maturities of long-term debt (Note 7) | 0 | 800,000 |
Customer deposits | 48,340 | 64,908 |
Liabilities from risk management activities (Note 16) | 7,557 | 38,946 |
Liabilities for asset retirements (Note 12) | 15,586 | 11,025 |
Operating lease liabilities (Note 9) | 74,785 | 12,713 |
Regulatory liabilities (Note 4) | 229,088 | 234,912 |
Other current liabilities | 187,448 | 168,323 |
Total current liabilities | 1,360,433 | 2,078,365 |
LONG-TERM DEBT LESS CURRENT MATURITIES (Note 7) | 6,314,266 | 4,832,558 |
DEFERRED CREDITS AND OTHER | ||
Deferred income taxes (Note 5) | 2,135,403 | 1,992,339 |
Regulatory liabilities (Notes 1, 4, 5 and 8) | 2,450,169 | 2,267,835 |
Liabilities for asset retirements (Note 12) | 689,497 | 646,193 |
Liabilities for pension benefits (Note 8) | 166,484 | 280,185 |
Liabilities from risk management activities (Note 16) | 11,062 | 33,186 |
Customer advances | 221,032 | 215,330 |
Coal mine reclamation | 170,097 | 165,695 |
Deferred investment tax credit | 191,372 | 196,468 |
Unrecognized tax benefits (Note 5) | 5,834 | 6,189 |
Operating lease liabilities (Note 9) | 361,336 | 51,872 |
Other | 190,643 | 159,844 |
Total deferred credits and other | 6,592,929 | 6,015,136 |
COMMITMENTS AND CONTINGENCIES (SEE NOTES) | ||
EQUITY | ||
Common stock, no par value; authorized 150,000,000 shares, 112,760,051 and 112,540,126 issued at respective dates | 2,677,482 | 2,659,561 |
Treasury stock at cost; 72,006 shares at end of 2020 and 103,546 shares at end of 2019 | (6,289) | (9,427) |
Total common stock | 2,671,193 | 2,650,134 |
Retained earnings | 3,025,106 | 2,837,610 |
Accumulated other comprehensive loss | (62,796) | (57,096) |
Total shareholders’ equity | 5,633,503 | 5,430,648 |
Noncontrolling interests (Note 18) | 119,290 | 122,540 |
Total equity | 5,752,793 | 5,553,188 |
Total Liabilities and Equity | 20,020,421 | 18,479,247 |
ARIZONA PUBLIC SERVICE COMPANY | ||
CURRENT ASSETS | ||
Cash and cash equivalents | 57,310 | 10,169 |
Customer and other receivables | 312,644 | 255,479 |
Accrued unbilled revenues | 132,197 | 128,165 |
Allowance for doubtful accounts | (19,782) | (8,171) |
Materials and supplies (at average cost) | 314,745 | 331,091 |
Fossil fuel (at average cost) | 19,552 | 14,829 |
Income tax receivable (Note 5) | 0 | 7,313 |
Assets from risk management activities (Note 16) | 2,931 | 515 |
Deferred fuel and purchased power regulatory asset (Note 4) | 175,835 | 70,137 |
Other regulatory assets (Note 4) | 115,878 | 133,070 |
Other current assets | 47,593 | 38,895 |
Total current assets | 1,158,903 | 981,492 |
INVESTMENTS AND OTHER ASSETS | ||
Nuclear decommissioning trust (Notes 13 and 19) | 1,138,435 | 1,010,775 |
Other special use funds (Notes 13 and 19) | 254,509 | 245,095 |
Other assets | 46,010 | 43,781 |
Total investments and other assets | 1,438,954 | 1,299,651 |
PROPERTY, PLANT AND EQUIPMENT (Notes 1, 7 and 10) | ||
Plant in service and held for future use | 20,834,424 | 19,832,805 |
Accumulated depreciation and amortization | (7,107,058) | (6,634,597) |
Net | 13,727,366 | 13,198,208 |
Construction work in progress | 937,384 | 808,133 |
Palo Verde sale leaseback, net of accumulated depreciation | 98,036 | 101,906 |
Intangible assets, net of accumulated amortization | 282,415 | 290,409 |
Nuclear fuel, net of accumulated amortization | 113,645 | 123,500 |
Total property, plant and equipment | 15,158,846 | 14,522,156 |
DEFERRED DEBITS | ||
Regulatory assets (Notes 1, 4 and 5) | 1,133,987 | 1,304,073 |
Operating lease right-of-use assets (Note 9) | 503,475 | 144,024 |
Assets for pension and other postretirement benefits (Note 8) | 495,673 | 86,736 |
Other | 34,413 | 32,591 |
Total deferred debits | 2,167,548 | 1,567,424 |
Total Assets | 19,924,251 | 18,370,723 |
CURRENT LIABILITIES | ||
Accounts payable | 311,699 | 338,006 |
Accrued taxes | 148,970 | 136,328 |
Accrued interest | 56,322 | 52,619 |
Common dividends payable | 93,500 | 88,000 |
Current maturities of long-term debt (Note 7) | 0 | 350,000 |
Customer deposits | 48,340 | 64,908 |
Liabilities from risk management activities (Note 16) | 7,557 | 38,946 |
Liabilities for asset retirements (Note 12) | 15,586 | 11,025 |
Operating lease liabilities (Note 9) | 74,695 | 12,549 |
Regulatory liabilities (Note 4) | 229,088 | 234,912 |
Other current liabilities | 190,420 | 164,736 |
Total current liabilities | 1,176,177 | 1,492,029 |
LONG-TERM DEBT LESS CURRENT MATURITIES (Note 7) | 5,817,945 | 4,833,133 |
DEFERRED CREDITS AND OTHER | ||
Deferred income taxes (Note 5) | 2,143,673 | 2,033,096 |
Regulatory liabilities (Notes 1, 4, 5 and 8) | 2,450,169 | 2,267,835 |
Liabilities for asset retirements (Note 12) | 689,497 | 646,193 |
Liabilities for pension benefits (Note 8) | 148,943 | 262,243 |
Liabilities from risk management activities (Note 16) | 11,062 | 33,186 |
Customer advances | 221,032 | 215,330 |
Coal mine reclamation | 170,097 | 165,695 |
Deferred investment tax credit | 191,372 | 196,468 |
Unrecognized tax benefits (Note 5) | 39,410 | 40,188 |
Operating lease liabilities (Note 9) | 359,653 | 50,092 |
Other | 160,036 | 136,432 |
Total deferred credits and other | 6,584,944 | 6,046,758 |
COMMITMENTS AND CONTINGENCIES (SEE NOTES) | ||
EQUITY | ||
Common stock | 178,162 | 178,162 |
Additional paid-in capital | 2,871,696 | 2,721,696 |
Retained earnings | 3,216,955 | 3,011,927 |
Accumulated other comprehensive loss | (40,918) | (35,522) |
Total shareholders’ equity | 6,225,895 | 5,876,263 |
Noncontrolling interests (Note 18) | 119,290 | 122,540 |
Total equity | 6,345,185 | 5,998,803 |
Total capitalization | 12,163,130 | 10,831,936 |
Total Liabilities and Equity | $ 19,924,251 | $ 18,370,723 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
PROPERTY, PLANT AND EQUIPMENT | ||
Accumulated depreciation of Palo Verde sale leaseback | $ 253,014 | $ 249,144 |
Accumulated amortization on intangible assets | 698,500 | 647,276 |
Accumulated amortization on nuclear fuel | $ 137,207 | $ 137,330 |
EQUITY | ||
Common stock, authorized shares (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued shares (in shares) | 112,760,051 | 112,540,126 |
Treasury stock at cost, shares (in shares) | 72,006 | 103,546 |
ARIZONA PUBLIC SERVICE COMPANY | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Accumulated depreciation of Palo Verde sale leaseback | $ 253,014 | $ 249,144 |
Accumulated amortization on intangible assets | 697,366 | 646,142 |
Accumulated amortization on nuclear fuel | $ 137,207 | $ 137,330 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 570,052 | $ 557,813 | $ 530,540 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization including nuclear fuel | 686,253 | 664,140 | 650,955 |
Deferred fuel and purchased power | (93,651) | (82,481) | (78,277) |
Deferred fuel and purchased power amortization | (12,047) | 49,508 | 116,750 |
Allowance for equity funds used during construction | (33,776) | (31,431) | (52,319) |
Deferred income taxes | 69,469 | (1,479) | 117,355 |
Deferred investment tax credit | (5,096) | (3,938) | (5,170) |
Stock compensation | 18,292 | 18,376 | 19,547 |
Changes in current assets and liabilities: | |||
Customer and other receivables | (18,191) | (12,789) | 37,530 |
Accrued unbilled revenues | (4,032) | 9,005 | (24,736) |
Materials, supplies and fossil fuel | 11,623 | (51,826) | (6,103) |
Income tax receivable | 14,935 | (21,727) | 0 |
Other current assets | (30,640) | (3,507) | 33,844 |
Accounts payable | (6,059) | 50,641 | (14,602) |
Accrued taxes | 14,652 | (9,920) | 6,597 |
Other current liabilities | 22,520 | (84,651) | 28,174 |
Change in margin and collateral accounts — assets | 404 | (247) | 143 |
Change in margin and collateral accounts — liabilities | 100 | (125) | (2,211) |
Change in unrecognized tax benefits | 2,220 | 2,704 | (1,235) |
Change in long-term regulatory liabilities | 13,017 | 124,221 | (109,284) |
Change in other long-term assets | (67,453) | (82,895) | 78,604 |
Change in other long-term liabilities | (186,227) | (132,666) | (48,958) |
Net cash flow provided by operating activities | 966,365 | 956,726 | 1,277,144 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (1,326,584) | (1,191,447) | (1,178,169) |
Contributions in aid of construction | 62,503 | 70,693 | 27,716 |
Allowance for borrowed funds used during construction | (18,530) | (18,528) | (25,180) |
Proceeds from nuclear decommissioning trust sales and other special use funds | 819,518 | 719,034 | 653,033 |
Investment in nuclear decommissioning trust and other special use funds | (822,608) | (722,181) | (672,165) |
Other | 7,883 | 11,452 | 1,941 |
Net cash flow used for investing activities | (1,277,818) | (1,130,977) | (1,192,824) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Issuance of long-term debt | 1,596,672 | 1,092,188 | 445,245 |
Repayment of long-term debt | (915,150) | (600,000) | (182,000) |
Short-term borrowings and (repayments) — net | 73,325 | 54,275 | (7,000) |
Short-term debt borrowings under revolving credit facility | 751,690 | 49,000 | 45,000 |
Short-term debt repayments under revolving credit facility | (770,690) | (65,000) | (57,000) |
Dividends paid on common stock | (350,577) | (329,643) | (308,892) |
Common stock equity issuance and purchases — net | (1,389) | 692 | (5,055) |
Distributions to noncontrolling interests | (22,743) | (22,744) | (22,744) |
Net cash flow provided by (used for) financing activities | 361,138 | 178,768 | (92,446) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 49,685 | 4,517 | (8,126) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 10,283 | 5,766 | 13,892 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 59,968 | 10,283 | 5,766 |
ARIZONA PUBLIC SERVICE COMPANY | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | 587,521 | 584,764 | 589,758 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization including nuclear fuel | 686,168 | 664,055 | 649,295 |
Deferred fuel and purchased power | (93,651) | (82,481) | (78,277) |
Deferred fuel and purchased power amortization | (12,047) | 49,508 | 116,750 |
Allowance for equity funds used during construction | (33,776) | (31,431) | (52,319) |
Deferred income taxes | 36,462 | 48,367 | 59,927 |
Deferred investment tax credit | (5,096) | (3,938) | (5,170) |
Changes in current assets and liabilities: | |||
Customer and other receivables | (28,206) | (12,075) | 35,406 |
Accrued unbilled revenues | (4,032) | 9,005 | (24,736) |
Materials, supplies and fossil fuel | 11,623 | (51,826) | (6,206) |
Income tax receivable | 7,313 | (7,313) | 0 |
Other current assets | (24,669) | (1,461) | 31,707 |
Accounts payable | (4,503) | 53,258 | (15,608) |
Accrued taxes | 12,642 | (40,029) | 19,008 |
Other current liabilities | 29,587 | (82,138) | 25,070 |
Change in margin and collateral accounts — assets | 404 | (247) | 143 |
Change in margin and collateral accounts — liabilities | 100 | (125) | (2,211) |
Change in unrecognized tax benefits | 2,220 | 2,704 | (1,235) |
Change in long-term regulatory liabilities | 13,017 | 124,221 | (109,284) |
Change in other long-term assets | (65,139) | (85,725) | 77,952 |
Change in other long-term liabilities | (186,871) | (129,682) | (55,169) |
Net cash flow provided by operating activities | 929,067 | 1,007,411 | 1,254,801 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (1,326,584) | (1,191,447) | (1,169,061) |
Contributions in aid of construction | 62,503 | 70,693 | 27,716 |
Allowance for borrowed funds used during construction | (18,530) | (18,528) | (25,180) |
Proceeds from nuclear decommissioning trust sales and other special use funds | 819,518 | 719,034 | 653,033 |
Investment in nuclear decommissioning trust and other special use funds | (822,608) | (722,181) | (672,165) |
Other | (554) | 6,336 | (1,789) |
Net cash flow used for investing activities | (1,286,255) | (1,136,093) | (1,187,446) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Issuance of long-term debt | 1,099,722 | 1,092,188 | 295,245 |
Repayment of long-term debt | (465,150) | (600,000) | (182,000) |
Short-term debt borrowings under revolving credit facility | 540,000 | 0 | 25,000 |
Short-term debt repayments under revolving credit facility | (540,000) | 0 | (25,000) |
Dividends paid on common stock | (357,500) | (336,300) | (316,000) |
Equity infusion from Pinnacle West | 150,000 | 0 | 150,000 |
Distributions to noncontrolling interests | (22,743) | (22,744) | (22,744) |
Net cash flow provided by (used for) financing activities | 404,329 | 133,144 | (75,499) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 47,141 | 4,462 | (8,144) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 10,169 | 5,707 | 13,851 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 57,310 | $ 10,169 | $ 5,707 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | ARIZONA PUBLIC SERVICE COMPANY | ARIZONA PUBLIC SERVICE COMPANYCommon Stock | ARIZONA PUBLIC SERVICE COMPANYAdditional Paid-In Capital | ARIZONA PUBLIC SERVICE COMPANYRetained Earnings | ARIZONA PUBLIC SERVICE COMPANYAccumulated Other Comprehensive Income (Loss) | ARIZONA PUBLIC SERVICE COMPANYNoncontrolling Interests | |||||||
Beginning balance (in shares) at Dec. 31, 2017 | 111,816,170 | 64,463 | 71,264,947 | ||||||||||||||||
Beginning balance at Dec. 31, 2017 | $ 5,135,730 | $ 2,614,805 | $ (5,624) | $ 2,442,511 | $ (45,002) | $ 129,040 | $ 5,385,869 | $ 178,162 | $ 2,571,696 | $ 2,533,954 | $ (26,983) | $ 129,040 | |||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||||||
Net income | 530,540 | 511,047 | 19,493 | 589,758 | 570,265 | 19,493 | |||||||||||||
Other comprehensive income (loss) | 5,846 | 5,846 | 4,914 | 4,914 | |||||||||||||||
Dividends on common stock | (320,927) | (320,927) | (321,001) | (321,001) | |||||||||||||||
Issuance of common stock (in shares) | 343,726 | ||||||||||||||||||
Issuance of common stock | 19,460 | $ 19,460 | |||||||||||||||||
Purchase of treasury stock (in shares) | [1] | (129,903) | |||||||||||||||||
Purchase of treasury stock | [1] | (10,338) | $ (10,338) | ||||||||||||||||
Reissuance of treasury stock for stock-based compensation and other (in shares) | 136,231 | ||||||||||||||||||
Reissuance of treasury stock for stock-based compensation and other | 11,137 | $ 11,137 | |||||||||||||||||
Equity infusion from Pinnacle West | 150,000 | 150,000 | |||||||||||||||||
Reclassification of income tax effects related to new tax reform | 0 | [2] | 8,552 | [2] | (8,552) | [2] | 0 | [3] | 5,038 | [3] | (5,038) | [3] | |||||||
Capital activities by noncontrolling interests | (22,743) | (22,743) | (22,743) | (22,743) | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2018 | 112,159,896 | 58,135 | 71,264,947 | ||||||||||||||||
Ending balance at Dec. 31, 2018 | 5,348,705 | $ 2,634,265 | $ (4,825) | 2,641,183 | (47,708) | 125,790 | 5,786,797 | $ 178,162 | 2,721,696 | 2,788,256 | (27,107) | 125,790 | |||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||||||
Net income | 557,813 | 538,320 | 19,493 | 584,764 | 565,271 | 19,493 | |||||||||||||
Other comprehensive income (loss) | (9,388) | (9,388) | (8,415) | (8,415) | |||||||||||||||
Dividends on common stock | (341,893) | (341,893) | (341,600) | (341,600) | |||||||||||||||
Issuance of common stock (in shares) | 380,230 | ||||||||||||||||||
Issuance of common stock | 25,296 | $ 25,296 | |||||||||||||||||
Purchase of treasury stock (in shares) | [1] | (121,493) | |||||||||||||||||
Purchase of treasury stock | [1] | (11,202) | $ (11,202) | ||||||||||||||||
Reissuance of treasury stock for stock-based compensation and other (in shares) | 76,082 | ||||||||||||||||||
Reissuance of treasury stock for stock-based compensation and other | 6,600 | $ 6,600 | |||||||||||||||||
Capital activities by noncontrolling interests | $ (22,743) | (22,743) | (22,743) | (22,743) | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 112,540,126 | 112,540,126 | 103,546 | 71,264,947 | |||||||||||||||
Ending balance at Dec. 31, 2019 | $ 5,553,188 | $ 2,659,561 | $ (9,427) | 2,837,610 | (57,096) | 122,540 | 5,998,803 | $ 178,162 | 2,721,696 | 3,011,927 | (35,522) | 122,540 | |||||||
Increase (Decrease) in Shareholders' Equity | |||||||||||||||||||
Net income | 570,052 | 550,559 | 19,493 | 587,521 | 568,028 | 19,493 | |||||||||||||
Other comprehensive income (loss) | (5,700) | (5,700) | (5,396) | (5,396) | |||||||||||||||
Dividends on common stock | (363,063) | (363,063) | (363,000) | (363,000) | |||||||||||||||
Issuance of common stock (in shares) | 219,925 | ||||||||||||||||||
Issuance of common stock | 17,921 | $ 17,921 | |||||||||||||||||
Purchase of treasury stock (in shares) | [1] | (81,256) | |||||||||||||||||
Purchase of treasury stock | [1] | (7,181) | $ (7,181) | ||||||||||||||||
Reissuance of treasury stock for stock-based compensation and other (in shares) | 112,796 | ||||||||||||||||||
Reissuance of treasury stock for stock-based compensation and other | 10,319 | $ 10,319 | |||||||||||||||||
Equity infusion from Pinnacle West | 150,000 | 150,000 | |||||||||||||||||
Capital activities by noncontrolling interests | $ (22,743) | (22,743) | (22,743) | (22,743) | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 112,760,051 | 112,760,051 | 72,006 | 71,264,947 | |||||||||||||||
Ending balance at Dec. 31, 2020 | $ 5,752,793 | $ 2,677,482 | $ (6,289) | $ 3,025,106 | $ (62,796) | $ 119,290 | $ 6,345,185 | $ 178,162 | $ 2,871,696 | $ 3,216,955 | $ (40,918) | $ 119,290 | |||||||
[1] | Primarily represents shares of common stock withheld from certain stock awards for tax purposes. | ||||||||||||||||||
[2] | In 2018, the Company adopted new accounting guidance and elected to reclassify income tax effects of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) on items within accumulated other comprehensive income to retained earnings . | ||||||||||||||||||
[3] | In 2018, the Company adopted new accounting guidance and elected to reclassify income tax effects of the Tax Act on items within accumulated other comprehensive income to retained earnings. |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per common share (in dollars per share) | $ 3.23 | $ 3.04 | $ 2.87 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Description of Business and Basis of Presentation Pinnacle West is a holding company that conducts business through its subsidiaries, APS, El Dorado, BCE and 4CA. APS, our wholly-owned subsidiary, is a vertically-integrated electric utility that provides either retail or wholesale electric service to substantially all of the state of Arizona, with the major exceptions of about one-half of the Phoenix metropolitan area, the Tucson metropolitan area and Mohave County in northwestern Arizona. APS accounts for essentially all of our revenues and earnings, and is expected to continue to do so. El Dorado is an investment firm. BCE is a subsidiary that was formed in 2014 that focuses on growth opportunities that leverage the Company’s core expertise in the electric energy industry. 4CA is a subsidiary that was formed in 2016 as a result of the purchase of El Paso’s 7% interest in Four Corners. (See Note 11 for more information on 4CA matters.) Pinnacle West’s Consolidated Financial Statements include the accounts of Pinnacle West and our subsidiaries: APS, El Dorado, BCE and 4CA. APS’s Consolidated Financial Statements include the accounts of APS and certain VIEs relating to the Palo Verde sale leaseback. Intercompany accounts and transactions between the consolidated companies have been eliminated. We consolidate VIEs for which we are the primary beneficiary. We determine whether we are the primary beneficiary of a VIE through a qualitative analysis that identifies which variable interest holder has the controlling financial interest in the VIE. In performing our primary beneficiary analysis, we consider all relevant facts and circumstances, including the design and activities of the VIE, the terms of the contracts the VIE has entered into, and which parties participated significantly in the design or redesign of the entity. We continually evaluate our primary beneficiary conclusions to determine if changes have occurred which would impact our primary beneficiary assessments. We have determined that APS is the primary beneficiary of certain VIE lessor trusts relating to the Palo Verde sale leaseback, and therefore APS consolidates these entities. (See Note 18 for additional information.) Our consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments, except as otherwise disclosed in the notes) that we believe are necessary for the fair presentation of our financial position, results of operations and cash flows for the periods presented. Accounting Records and Use of Estimates Our accounting records are maintained in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Regulatory Accounting APS is regulated by the ACC and FERC. The accompanying financial statements reflect the rate-making policies of these commissions. As a result, we capitalize certain costs that would be included as expense in the current period by unregulated companies. Regulatory assets represent incurred costs that have been deferred because they are probable of future recovery in customer rates. Regulatory liabilities generally represent amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and are refundable to customers. Management judgments include continually assessing the likelihood of future recovery of regulatory assets and/or a disallowance of part of the cost of recently completed plant, by considering factors such as applicable regulatory environment changes and recent rate orders to other regulated entities in the same jurisdiction. This determination reflects the current political and regulatory climate in Arizona and is subject to change in the future. If future recovery of costs ceases to be probable, the assets would be written off as a charge in current period earnings. Management judgments also include assessing the impact of potential Commission-ordered refunds to customers on regulatory liabilities. See Note 4 for additional information. Electric Revenues Revenues primarily consist of activities that are classified as revenues from contracts with customers. Our electric revenues generally represent a single performance obligation delivered over time. We have elected to apply the practical expedient that allows us to recognize revenue based on the amount to which we have a right to invoice for services performed. We derive electric revenues primarily from sales of electricity to our regulated retail customers. Revenues related to the sale of electricity are generally recognized when service is rendered or electricity is delivered to customers. Unbilled revenues are estimated by applying an average revenue/kWh by customer class to the number of estimated kWhs delivered but not billed. Differences historically between the actual and estimated unbilled revenues are immaterial. We exclude sales taxes and franchise fees on electric revenues from both revenue and taxes other than income taxes. Revenues from our regulated retail customers and non-derivative instruments are reported on a gross basis on Pinnacle West’s Consolidated Statements of Income. In the electricity business, some contracts to purchase electricity are netted against other contracts to sell electricity. This is called a “book-out” and usually occurs for contracts that have the same terms (quantities, delivery points and delivery periods) and for which power does not flow. We net these book-outs, which reduces both wholesale revenues and fuel and purchased power costs. Some of our cost recovery mechanisms are alternative revenue programs. For alternative revenue programs that meet specified accounting criteria, we recognize revenues when the specific events permitting billing of the additional revenues have been completed. See Notes 2 and 4 for additional information. Allowance for Doubtful Accounts The allowance for doubtful accounts represents our best estimate of accounts receivable and accrued unbilled revenues that will ultimately be uncollectible due to credit loss risk. The allowance includes a write-off component that is calculated by applying an estimated write-off factor to retail electric revenues. The write-off factor used to estimate uncollectible accounts is based upon consideration of historical collections experience, the current and forecasted economic environment, changes to our collection policies, and management’s best estimate of future collections success. (See Note 2.) Property, Plant and Equipment Utility plant is the term we use to describe the business property and equipment that supports electric service, consisting primarily of generation, transmission and distribution facilities. We report utility plant at its original cost, which includes: • material and labor; • contractor costs; • capitalized leases; • construction overhead costs (where applicable); and • allowance for funds used during construction. Pinnacle West’s property, plant and equipment included in the December 31, 2020 and 2019 Consolidated Balance Sheets is composed of the following (dollars in thousands): Property, Plant and Equipment: 2020 2019 Generation $ 9,199,012 $ 8,916,872 Transmission 3,290,477 3,095,907 Distribution 7,107,007 6,690,697 General plant 1,241,389 1,132,816 Plant in service and held for future use 20,837,885 19,836,292 Accumulated depreciation and amortization (7,110,310) (6,637,857) Net 13,727,575 13,198,435 Construction work in progress 937,384 808,133 Palo Verde sale leaseback, net of accumulated depreciation 98,036 101,906 Intangible assets, net of accumulated amortization 282,570 290,564 Nuclear fuel, net of accumulated amortization 113,645 123,500 Total property, plant and equipment $ 15,159,210 $ 14,522,538 Property, plant and equipment balances and classes for APS are not materially different than Pinnacle West. We expense the costs of plant outages, major maintenance and routine maintenance as incurred. We charge retired utility plant to accumulated depreciation. Liabilities associated with the retirement of tangible long-lived assets are recognized at fair value as incurred and capitalized as part of the related tangible long-lived assets. Accretion of the liability due to the passage of time is an operating expense, and the capitalized cost is depreciated over the useful life of the long-lived asset. (See Note 12 for additional information.) APS records a regulatory liability for the excess that has been recovered in regulated rates over the amount calculated in accordance with guidance on accounting for asset retirement obligations. APS believes it is probable it will recover in regulated rates, the costs calculated in accordance with this accounting guidance. We record depreciation and amortization on utility plant on a straight-line basis over the remaining useful life of the related assets. The approximate remaining average useful lives of our utility property at December 31, 2020 were as follows: • Fossil plant — 17 years; • Nuclear plant — 20 years; • Other generation — 20 years; • Transmission — 38 years; • Distribution — 34 years; and • General plant — 7 years. Depreciation of utility property, plant and equipment is computed on a straight-line, remaining-life basis. Depreciation expense was $553 million in 2020, $522 million in 2019, and $486 million in 2018. For the years 2018 through 2020, the depreciation rates ranged from a low of 0.18% to a high of 32.43%. The weighted-average depreciation rate was 2.84% in 2020, 2.81% in 2019, and 2.81% in 2018. Asset Retirement Obligations APS has asset retirement obligations for its Palo Verde nuclear facilities and certain other generation assets. The Palo Verde asset retirement obligation primarily relates to final plant decommissioning. This obligation is based on the NRC’s requirements for disposal of radiated property or plant and agreements APS reached with the ACC for final decommissioning of the plant. The non-nuclear generation asset retirement obligations primarily relate to requirements for removing portions of those plants at the end of the plant life or lease term and coal ash pond closures. Some of APS’s transmission and distribution assets have asset retirement obligations because they are subject to right of way and easement agreements that require final removal. These agreements have a history of uninterrupted renewal that APS expects to continue. As a result, APS cannot reasonably estimate the fair value of the asset retirement obligation related to such transmission and distribution assets. Additionally, APS has aquifer protection permits for some of its generation sites that require the closure of certain facilities at those sites. See Note 12 for further information on Asset Retirement Obligations. Allowance for Funds Used During Construction AFUDC represents the approximate net composite interest cost of borrowed funds and an allowed return on the equity funds used for construction of regulated utility plant. Both the debt and equity components of AFUDC are non-cash amounts within the Consolidated Statements of Income. Plant construction costs, including AFUDC, are recovered in authorized rates through depreciation when completed projects are placed into commercial operation. AFUDC was calculated by using a composite rate of 6.72% for 2020, 6.98% for 2019, and 7.03% for 2018. APS compounds AFUDC semi-annually and ceases to accrue AFUDC when construction work is completed and the property is placed in service. On June 30, 2020, the United States Federal Energy Regulatory Commission (“FERC”) issued an order granting a waiver request related to the existing Allowance for Funds Used During Construction (“AFUDC”) rate calculation beginning March 1, 2020 through February 28, 2021. The order provides a simplified approach that companies may elect to implement in order to minimize the significant distorted effect on the AFUDC formula resulting from increased short-term debt financing during the COVID-19 pandemic. APS has adopted this simplified approach to computing the AFUDC composite rate by using a simple average of the actual historical short-term debt balances for 2019, instead of current period short-term debt balances, and has left all other aspects of the AFUDC formula composite rate calculation unchanged. This change impacts the AFUDC composite rate in 2020 but does not impact prior years. Furthermore, the change in the composite rate calculation does not impact our accounting treatment for these costs. The change did not have a material impact on our financial statements. Materials and Supplies APS values materials, supplies and fossil fuel inventory using a weighted-average cost method. APS materials, supplies and fossil fuel inventories are carried at the lower of weighted-average cost or market, unless evidence indicates that the weighted-average cost (even if in excess of market) will be recovered. Fair Value Measurements We apply recurring fair value measurements to cash equivalents, derivative instruments, investments held in the nuclear decommissioning trust and other special use funds. On an annual basis, we apply fair value measurements to plan assets held in our retirement and other benefits plans. Due to the short-term nature of short-term borrowings, the carrying values of these instruments approximate fair value. Fair value measurements may also be applied on a nonrecurring basis to other assets and liabilities in certain circumstances such as impairments. We also disclose fair value information for our long-term debt, which is carried at amortized cost. (See Note 7 for additional information.) Fair value is the price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market which we can access for the asset or liability in an orderly transaction between willing market participants on the measurement date. Inputs to fair value may include observable and unobservable data. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We determine fair market value using observable inputs such as actively-quoted prices for identical instruments when available. When actively-quoted prices are not available for the identical instruments, we use other observable inputs, such as prices for similar instruments, other corroborative market information, or prices provided by other external sources. For options, long-term contracts and other contracts for which observable price data are not available, we use models and other valuation methods, which may incorporate unobservable inputs to determine fair market value. The use of models and other valuation methods to determine fair market value often requires subjective and complex judgment. Actual results could differ from the results estimated through application of these methods. See Note 13 for additional information about fair value measurements. Derivative Accounting We are exposed to the impact of market fluctuations in the commodity price and transportation costs of electricity, natural gas, coal and in interest rates. We manage risks associated with market volatility by utilizing various physical and financial instruments including futures, forwards, options and swaps. As part of our overall risk management program, we may use derivative instruments to hedge purchases and sales of electricity and natural gas. The changes in market value of such contracts have a high correlation to price changes in the hedged transactions. We also enter into derivative instruments for economic hedging purposes. Contracts that have the same terms (quantities, delivery points and delivery periods) and for which power does not flow are netted, which reduces both revenues and fuel and purchased power expenses in our Consolidated Statements of Income, but does not impact our financial condition, net income or cash flows. We account for our derivative contracts in accordance with derivatives and hedging guidance, which requires all derivatives not qualifying for a scope exception to be measured at fair value on the balance sheet as either assets or liabilities. Transactions with counterparties that have master netting arrangements are reported net on the balance sheet. (See Note 16 for additional information about our derivative instruments.) Loss Contingencies and Environmental Liabilities Pinnacle West and APS are involved in certain legal and environmental matters that arise in the normal course of business. Contingent losses and environmental liabilities are recorded when it is determined that it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. When a range of the probable loss exists and no amount within the range is a better estimate than any other amount, Pinnacle West and APS record a loss contingency at the minimum amount in the range. Unless otherwise required by GAAP, legal fees are expensed as incurred. Retirement Plans and Other Postretirement Benefits Pinnacle West sponsors a qualified defined benefit and account balance pension plan for the employees of Pinnacle West and its subsidiaries, in addition to a non-qualified pension plan. We also sponsor another postretirement benefit plan for the employees of Pinnacle West and its subsidiaries that provides medical and life insurance benefits to retired employees. Pension and other postretirement benefit expense are determined by actuarial valuations, based on assumptions that are evaluated annually. (See Note 8 for additional information on pension and other postretirement benefits.) Nuclear Fuel APS amortizes nuclear fuel by using the unit-of-production method. The unit-of-production method is based on actual physical usage. APS divides the cost of the fuel by the estimated number of thermal units it expects to produce with that fuel. APS then multiplies that rate by the number of thermal units produced within the current period. This calculation determines the current period nuclear fuel expense. APS also charges nuclear fuel expense for the interim storage and permanent disposal of spent nuclear fuel. The DOE is responsible for the permanent disposal of spent nuclear fuel and charged APS $0.001 per kWh of nuclear generation through May 2014, at which point the DOE reduced the fee to zero. In accordance with a settlement agreement with the DOE in August 2014 for interim storage, we now accrue a receivable and an offsetting regulatory liability through the settlement period ending December of 2022. (See Note 11 for information on spent nuclear fuel disposal costs.) Income Taxes Income taxes are provided using the asset and liability approach prescribed by guidance relating to accounting for income taxes and are based on currently enacted tax rates. We file our federal income tax return on a consolidated basis, and we file our state income tax returns on a consolidated or unitary basis. In accordance with our intercompany tax sharing agreement, federal and state income taxes are allocated to each first-tier subsidiary as though each first-tier subsidiary filed a separate income tax return. Any difference between that method and the consolidated (and unitary) income tax liability is attributed to the parent company. The income tax accounts reflect the tax and interest associated with management’s estimate of the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement for all known and measurable tax exposures. (See Note 5 for additional discussion.) Cash and Cash Equivalents We consider cash equivalents to be highly liquid investments with a remaining maturity of three months or less at acquisition. The following table summarizes supplemental Pinnacle West cash flow information for each of the last three years (dollars in thousands): Year ended December 31, 2020 2019 2018 Cash paid (received) during the period for: Income taxes, net of refunds $ (3,019) $ 12,535 $ 21,173 Interest, net of amounts capitalized 216,951 218,664 208,479 Significant non-cash investing and financing activities: Accrued capital expenditures $ 113,502 $ 141,297 $ 132,620 Dividends declared but not paid 93,531 87,982 82,675 Sale of 4CA 7% interest in Four Corners — — 68,907 The following table summarizes supplemental APS cash flow information for each of the last three years (dollars in thousands): Year ended December 31, 2020 2019 2018 Cash paid (received) during the period for: Income taxes, net of refunds $ 41,176 $ (15,042) $ 77,942 Interest, net of amounts capitalized 206,328 204,261 196,419 Significant non-cash investing and financing activities: Accrued capital expenditures $ 113,502 $ 141,297 $ 132,620 Dividends declared but not paid 93,500 88,000 82,700 Intangible Assets We have no goodwill recorded and have separately disclosed other intangible assets, primarily APS’s software, on Pinnacle West’s Consolidated Balance Sheets. The intangible assets are amortized over their finite useful lives. Amortization expense was $70 million in 2020, $66 million in 2019, and $68 million in 2018. Estimated amortization expense on existing intangible assets over the next five years is $68 million in 2021, $56 million in 2022, $48 million in 2023, $33 million in 2024, and $25 million in 2025. At December 31, 2020, the weighted-average remaining amortization period for intangible assets was 7 years. Investments El Dorado holds investments in both debt and equity securities. Investments in debt securities are generally accounted for as held-to-maturity and investments in equity securities are accounted for using either the equity method (if significant influence) or the measurement alternative for investments without readily determinable fair values (if less than 20% ownership and no significant influence). Bright Canyon holds investments in equity securities. Investments in equity securities are accounted for using either the equity method (if significant influence) or the measurement alternative for investments without readily determinable fair values (if less than 20% ownership and no significant influence). Our investments in the nuclear decommissioning trusts, coal reclamation escrow accounts and active union employee medical account, are accounted for in accordance with guidance on accounting for investments in debt and equity securities. (See Notes 13 and 19 for more information on these investments.) Leases We determine if an agreement is a lease at contract inception. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To control the use of an identified asset an entity must have both a right to obtain substantially all of the benefits from the use of the asset and the right to direct the use of the asset. If we determine an agreement is a lease, and we are the lessee, we recognize a right-of-use lease asset and a lease liability at the lease commencement date. Lease liabilities are recognized based on the present value of the fixed lease payments over the lease term. To present value lease liabilities we use the implicit rate in the lease if the information is readily available, otherwise we use our incremental borrowing rate determined at lease commencement. Our incremental borrowing rate is based on the rate of interest we would have to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When measuring right-of-use assets and lease liabilities we exclude variable lease payments, other than those that depend on an index or rate or are in-substance fixed payments. For short-term leases with terms of 12 months or less, we do not recognize a right-of-use lease asset or lease liability. We recognize operating lease expense using a straight-line pattern over the periods of use. APS enters into purchased power contracts that may contain leases. This occurs when a purchased power agreement designates a specific power plant, APS obtains substantially all of the economic benefits from the use of the plant and has the right to direct the use of the plant. Lease costs relating to purchased power lease contracts are reported in fuel and purchased power on the Consolidated Statements of Income, and are subject to recovery under the PSA or RES (see Note 4 ). We also may enter into lease agreements related to vehicles, office space, land, and other equipment. (See Note 9 for information on our lease agreements.) Business Segments Pinnacle West’s reportable business segment is our regulated electricity segment, which consists of traditional regulated retail and wholesale electricity businesses (primarily electricity service to Native Load customers) and related activities and includes electricity generation, transmission and distribution. All other segment activities are insignificant. Preferred Stock At December 31, 2020, Pinnacle West had 10 million shares of serial preferred stock authorized with no par value, none of which was outstanding, and APS had 15,535,000 shares of various types of preferred stock authorized with $25, $50 and $100 par values, none of which was outstanding. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Sources of Revenue The following table provides detail of Pinnacle West’s consolidated revenue disaggregated by revenue sources (dollars in thousands): Year Ended December 31, Year Ended December 31, Year Ended December 31, 2020 2019 2018 Retail Electric Service Residential $ 1,929,178 (a) $ 1,761,122 $ 1,867,370 Non-Residential 1,486,098 1,509,514 1,628,891 Wholesale Energy Sales 93,345 121,805 109,198 Transmission Services for Others 65,859 62,460 60,261 Other Sources 12,502 16,308 25,527 Total Operating Revenues $ 3,586,982 $ 3,471,209 $ 3,691,247 (a) Residential revenues for the year ended December 31, 2020 reflect a $24 million reduction related to the Arizona Attorney General matter. (See Note 11). Retail Electric Revenue. Pinnacle West’s retail electric revenue is generated by our wholly owned regulated subsidiary APS’s sale of electricity to our regulated customers within the authorized service territory at tariff rates approved by the ACC and based on customer usage. Revenues related to the sale of electricity are generally recognized when service is rendered or electricity is delivered to customers. The billing of electricity sales to individual customers is based on the reading of their meters. We obtain customers’ meter data on a systematic basis throughout the month, and generally bill customers within a month from when service was provided. Customers are generally required to pay for services within 15 days of when the services are billed. See “Allowance for Doubtful Accounts” discussion below for additional details regarding payment terms. Wholesale Energy Sales and Transmission Services for Others. Revenues from wholesale energy sales and transmission services for others represent energy and transmission sales to wholesale customers. These activities primarily consist of managing fuel and purchased power risks in connection with the cost of serving our retail customers’ energy requirements. We may also sell into the wholesale markets generation that is not needed for APS’s retail load. Our wholesale activities and tariff rates are regulated by FERC. Revenue Activities Our revenues primarily consist of activities that are classified as revenues from contracts with customers. We derive our revenues from contracts with customers primarily from sales of electricity to our regulated retail customers. Revenues from contracts with customers also include wholesale and transmission activities. Our revenues from contracts with customers for the year ended December 31, 2020, 2019 and 2018 were $3,533 million, $3,415 million and $3,644 million, respectively. We have certain revenues that do not meet the specific accounting criteria to be classified as revenues from contracts with customers. For the year ended December 31, 2020, 2019 and 2018, our revenues that do not qualify as revenue from contracts with customers were $54 million, $56 million and $47 million, respectively. This relates primarily to certain regulatory cost recovery mechanisms that are considered alternative revenue programs. We recognize revenue associated with alternative revenue programs when specific events permitting recognition are completed. Certain amounts associated with alternative revenue programs will subsequently be billed to customers; however, we do not reclassify billed amounts into revenue from contracts with customers. (See Note 4 for a discussion of our regulatory cost recovery mechanisms.) Contract Assets and Liabilities from Contracts with Customers There were no material contract assets, contract liabilities, or deferred contract costs recorded on the Consolidated Balance Sheets as of December 31, 2020 and 2019. Allowance for Doubtful Accounts On March 13, 2020, due to the COVID-19 pandemic we voluntarily suspended disconnections of customers for nonpayment. The suspension of customer disconnections was extended from March 13, 2020 through December 31, 2020. Our disconnection policies are also impacted by the Summer Disconnection Moratorium. The suspension of disconnection of customers for nonpayment ended on January 1, 2021 and certain customers with past due balances were placed on eight-month payment arrangements. These circumstances and the on-going COVID-19 pandemic have impacted our allowance for doubtful accounts including our write-off factor. We continue to monitor the impacts of COVID-19, our disconnection policies, payment arrangements, among other considerations impacting our estimated write-off factor and allowance for doubtful accounts. (See Note 1 for our accounting policies on allowance for doubtful accounts. See Note 4 for additional discussion on the COVID-19 pandemic and the Summer Disconnection Moratorium.) The following table provides a rollforward of Pinnacle West’s allowance for doubtful accounts all of which primarily relates to APS (dollars in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018 Allowance for doubtful accounts, balance at beginning of period $ 8,171 $ 4,069 $ 2,513 Bad debt expense 20,633 11,819 10,870 Actual write-offs (9,022) (7,717) (9,314) Allowance for doubtful accounts, balance at end of period $ 19,782 $ 8,171 $ 4,069 |
New Accounting Standards
New Accounting Standards | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
New Accounting Standards | New Accounting Standards Standards Adopted in 2020 ASU 2016-13, Financial Instruments: Measurement of Credit Losses In June 2016, a new accounting standard was issued that amends the measurement of credit losses on certain financial instruments. The new standard requires entities to use a current expected credit loss model to measure impairment of certain investments in debt securities, trade accounts receivables and other financial instruments. Since the issuance of the new standard, various guidance has been issued that amends the new standard, including clarifications of certain aspects of the standard and targeted transition relief, among other changes. The new standard and related amendments were effective for us on January 1, 2020, and must be adopted using a modified retrospective approach for certain aspects of the standard, and a prospective approach for other aspects of the standard. We adopted the standard on January 1, 2020 using primarily the modified retrospective approach. While the adoption of this guidance changed our process and methodology for determining credit losses and resulted in additional disclosures, these changes did not have a material impact on our financial statements. (See Note 2 for allowance for doubtful accounts related credit loss disclosures.) ASU 2018-14, Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, a new accounting standard was issued that amends certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments remove disclosures that are no longer considered beneficial, clarifies specific disclosure requirements and adds new disclosure requirements relating to defined benefit plans. The new standard is effective for fiscal years ending after December 15, 2020. We adopted and implemented the standard on a retrospective basis in our financial statements for the year ended December 31, 2020. While the adoption of this guidance modified the disclosure requirements relating to defined benefit plans, these changes did not have a material impact on our financial statements. (See Note 8 for Retirement Plans and Other Postretirement Benefits disclosure.) |
Regulatory Matters
Regulatory Matters | 12 Months Ended |
Dec. 31, 2020 | |
Regulated Operations [Abstract] | |
Regulatory Matters | Regulatory Matters COVID-19 Pandemic Due to the COVID-19 pandemic, APS voluntarily suspended disconnections of customers for nonpayment beginning March 13, 2020. In addition, APS waived all late payment fees during this suspension period. On September 14, 2020, APS extended this suspension of disconnection of customers for nonpayment and waiver of late payment fees until December 31, 2020. The suspension of disconnection of customers for nonpayment ended on January 1, 2021 and customers were automatically placed on eight-month payment arrangements if they had past due balances at the end of the disconnection period of $75 or greater. APS will continue to waive late payment fees until October 15, 2021. APS has experienced and is continuing to experience an increase in bad debt expense associated with the COVID-19 pandemic. The Summer Disconnection Moratorium (see below for discussion of the Summer Disconnection Moratorium), the suspension of disconnections during the COVID-19 pandemic and the increased bad debt expense associated with both events resulted in a negative impact to its 2020 operating results of approximately $23 million pre-tax above the impact of disconnections on its operating results for years that did not have the Summer Disconnection Moratorium or COVID-19 pandemic. Additionally, due to COVID-19, APS delayed the reset of the EIS adjustor and suspended the discontinuation of TEAM Phase II to the first billing cycle in May 2020 rather than April 2020 and also delayed the reset of the PSA to the first billing cycle of April 2021 rather than February 2021 (see below for discussion of EIS, TEAM Phase II and PSA). On April 17, 2020, APS filed an application with the ACC requesting a COVID-19 emergency relief package to provide additional assistance to its customers. On May 5, 2020, the ACC approved APS returning $36 million that had been collected through the DSM Adjustor Charge, but not allocated for current DSM programs, directly to customers through a bill credit in June 2020. As of December 31, 2020, APS had refunded approximately $43 million to customers. The additional $7 million over the approved amount of $36 million was the result of the kWh credit being based on historic consumption, which was different than actual consumption in the refund period. This difference was recorded to the DSM balancing account and will be addressed in subsequent DSM filings (see below for discussion of the DSM Adjustor Charge). APS has spent more than $15 million to assist customers and local non-profits and community organizations to help with the impact of the COVID-19 pandemic, with $12.4 million of these dollars directly committed to bill assistance programs (the “COVID Customer Support Fund”). The COVID Customer Support Fund was comprised of a series of voluntary commitments of funds that are not recoverable through rates throughout 2020 of approximately $8.8 million. An additional $3.6 million in bill credits for limited income customers was ordered by the ACC in December 2020 of which 50%, up to a maximum of $2.5 million, was committed to be funds that are not recoverable through rates with the remaining being deferred for potential future recovery in rates. Included in the COVID Customer Support Fund were programs that assisted customers that had a delinquency of two or more months with a one-time credit of $100, an expanded credit of $300 for limited income customers, programs to assist extra small and small non-residential customers with a one-time credit of $1,000, and other targeted programs allocated to assist with other COVID-19 needs in support of utility bill assistance. The December 2020 ACC order further assisted delinquent limited income customers with an additional bill credit of up to $250 or their delinquent balance, whichever was less. As of December 31, 2020, APS had distributed all funds for all COVID Customer Support Fund programs combined. Beyond the COVID Customer Support Fund, APS has also provided $2.7 million to assist local non-profits and community organizations working to mitigate the impacts of the COVID-19 pandemic. 2019 Retail Rate Case Filing with the Arizona Corporation Commission In accordance with the requirements of the 2019 rate review order described below, APS filed an application with the ACC on October 31, 2019 seeking an annual increase in retail base rates of $69 million. This amount includes recovery of the deferral and rate base effects of the Four Corners selective catalytic reduction (“SCR”) project that is currently the subject of a separate proceeding (see “SCR Cost Recovery” below). It also reflects a net credit to base rates of approximately $115 million primarily due to the prospective inclusion of rate refunds currently provided through the TEAM. The proposed total annual revenue increase in APS’s application is $184 million. The average annual customer bill impact of APS’s request is an increase of 5.6% (the average annual bill impact for a typical APS residential customer is 5.4%). The principal provisions of APS’s application were: • a test year comprised of twelve months ended June 30, 2019, adjusted as described below; • an original cost rate base of $8.87 billion, which approximates the ACC-jurisdictional portion of the book value of utility assets, net of accumulated depreciation and other credits; • 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 % • a 1% return on the increment of fair value rate base above APS’s original cost rate base, as provided for by Arizona law; • a rate of $0.030168 per kWh for the portion of APS’s retail base rates attributable to fuel and purchased power costs (“Base Fuel Rate”); • authorization to defer until APS’s next general rate case the increase or decrease in its Arizona property taxes attributable to tax rate changes after the date the rate application is adjudicated; • a number of proposed rate and program changes for residential customers, including: ▪ a super off-peak period during the winter months for APS’s time-of-use with demand rates; ▪ additional $1.25 million in funding for APS’s limited-income crisis bill program; and ▪ a flat bill/subscription rate pilot program; • proposed rate design changes for commercial customers, including an experimental program designed to provide access to market pricing for up to 200 MW of medium and large commercial customers; • recovery of the deferral and rate base effects of the construction and operating costs of the Ocotillo modernization project (see discussion below of the 2017 Settlement Agreement); and • continued recovery of the remaining investment and other costs related to the retirement and closure of the Navajo Plant (see “Navajo Plant” below). APS requested that the increase become effective December 1, 2020. On October 2, 2020, the ACC Staff, the Residential Utility Consumer Office (“RUCO”) and other intervenors filed their initial written testimony with the ACC in this rate case. The ACC Staff recommends, among other things, a (i) $89.7 million revenue increase, (ii) average annual customer bill increase of 2.7%, (iii) return on equity of 9.4%, (iv) a 0.3% or, as an alternative, a 0% return on the increment of fair value rate base greater than original cost, (v) recovery of the deferral and rate base effects of the construction and operating costs of the Four Corners SCR project and (vi) recovery of the rate base effects of the construction and ongoing consideration of the deferral of the Ocotillo modernization project. RUCO recommends, among other things, a (i) $20.8 million revenue decrease, (ii) average annual customer bill decrease of 0.63%, (iii) return on equity of 8.74%, (iv) a 0% return on the increment of fair value rate base, (v) nonrecovery of the deferral and rate base effects of the construction and operating costs of the Four Corners SCR project pending further consideration, and (vi) recovery of the deferral and rate base effects of the construction and operating costs of the Ocotillo modernization project. The filed ACC Staff and intervenor testimony include additional recommendations, some of which materially differ from APS’s filed application. On November 6, 2020, APS filed its rebuttal testimony and the principal provisions which differ from its initial application include, among other things, a (i) $169 million revenue increase, (ii) average annual bill increase of 5.14%, (iii) return on equity of 10%, (iv) return on the increment of fair value rate base of 0.8%, (v) new cost recovery adjustor mechanism, the Advanced Energy Mechanism (“AEM”), to enable more timely recovery of clean investments as APS pursues its clean energy commitment, (vi) recognition that securitization is a potentially useful financing tool to recover the remaining book value of retiring assets and effectuate a transition to a cleaner energy future that APS intends to pursue, provided legislative hurdles are addressed, and (vii) a Coal Community Transition (“CCT”) plan related to the closure or future closure of coal-fired generation facilities, of which $25 million would be funds that are not recoverable through rates with a proposal that the remainder be funded by customers over 10 years. The CCT plan includes the following proposed components: (i) $100 million that will be paid over 10 years to the Navajo Nation for a sustainable transition to a post-coal economy, which would be funded by customers, (ii) $1.25 million that will be paid over five years to the Navajo Nation to fund an economic development organization, which would be funds not recoverable through rates, (iii) $10 million to facilitate electrification projects within the Navajo Nation, which would be funded equally by funds not recoverable through rates and by customers, (iv) $2.5 million per year in transmission revenue sharing to be paid to the Navajo Nation beginning after the closure of the Four Corners Power Plant through 2038, which would be funds not recoverable through rates, (v) $12 million that will be paid over five years to the Navajo County Communities surrounding Cholla Power Plant, which would primarily be funded by customers, and (vi) $3.7 million that will be paid over five years to the Hopi Tribe related to APS’s ownership interests in the Navajo Generating Station, which would primarily be funded by customers. The commitment of funds that would not be recoverable through rates of $25 million were recognized in our December 31, 2020 financials. The hearing began January 14, 2021. Unfavorable ACC Staff and intervenor positions and recommendations could have a material impact on APS’s financial statements if ultimately adopted by the ACC. APS cannot predict the outcome of this proceeding. 2016 Retail Rate Case Filing with the Arizona Corporation Commission On June 1, 2016, APS filed an application with the ACC for an annual increase in retail base rates. On March 27, 2017, a majority of the stakeholders in the general retail rate case, including the ACC Staff, the Residential Utility Consumer Office, limited income advocates and private rooftop solar organizations signed a settlement agreement (the “2017 Settlement Agreement”) and filed it with the ACC. The 2017 Settlement Agreement provides for a net retail base rate increase of $94.6 million, excluding the transfer of adjustor balances, consisting of: (1) a non-fuel, non-depreciation, base rate increase of $87.2 million per year; (2) a base rate decrease of $53.6 million attributable to reduced fuel and purchased power costs; and (3) a base rate increase of $61.0 million due to changes in depreciation schedules. The average annual customer bill impact under the 2017 Settlement Agreement was calculated as an increase of 3.28% (the average annual bill impact for a typical APS residential customer was calculated as an increase of 4.54%). Other key provisions of the agreement include the following: • an authorized return on common equity of 10.0%; • a capital structure comprised of 44.2% debt and 55.8% common equity; • a cost deferral order for potential future recovery in APS’s next general retail rate case for the construction and operating costs APS incurs for its Ocotillo modernization project; • a cost deferral and procedure to allow APS to request rate adjustments prior to its next general retail rate case related to its share of the construction costs associated with installing SCR equipment at Four Corners; • a deferral for future recovery (or credit to customers) of the Arizona property tax expense above or below a specified test year level caused by changes to the applicable Arizona property tax rate; • an expansion of the PSA to include certain environmental chemical costs and third-party energy storage costs; • a new AZ Sun II program (now known as APS Solar Communities) for utility-owned solar distributed generation (“DG”) with the purpose of expanding access to rooftop solar for low and moderate income Arizonans, recoverable through the RES, to be no less than $10 million per year in capital costs, and not more than $15 million per year in capital costs; • an increase to the per kWh cap for the environmental improvement surcharge from $0.00016 to $0.00050 and the addition of a balancing account; • rate design changes, including: ▪ a change in the on-peak time of use period from noon-7 p.m. to 3 p.m.-8 p.m. Monday through Friday, excluding holidays; ▪ non-grandfathered DG customers would be required to select a rate option that has time of use rates and either a new grid access charge or demand component; ▪ a Resource Comparison Proxy (“RCP”) for exported energy of 12.9 cents per kWh in year one; and • an agreement by APS not to pursue any new self-build generation (with certain exceptions) having an in-service date prior to January 1, 2022 (extended to December 31, 2027 for combined-cycle generating units), unless expressly authorized by the ACC. Through a separate agreement, APS, industry representatives, and solar advocates committed to stand by the 2017 Settlement Agreement and refrain from seeking to undermine it through ballot initiatives, legislation or advocacy at the ACC. On August 15, 2017, the ACC approved (by a vote of 4-1), the 2017 Settlement Agreement without material modifications. On August 18, 2017, the ACC issued a final written Opinion and Order reflecting its decision in APS’s general retail rate case (the “2017 Rate Case Decision”), which is subject to requests for rehearing and potential appeal. The new rates went into effect on August 19, 2017. On January 3, 2018, an APS customer filed a petition with the ACC that was determined by the ACC Staff to be a complaint filed pursuant to Arizona Revised Statute §40-246 (the “Complaint”). The Complaint was later amended alleging that the rates and charges in the 2017 Rate Case Decision are not just and reasonable. The ACC held a hearing on this matter, and the Administrative Law Judge issued a Recommended Opinion and Order recommending that the Complaint be dismissed. On July 3, 2019, the Administrative Law Judge issued an amendment to the Recommended Opinion and Order that incorporated the requirements of the rate review of the 2017 Rate Case Decision (see below discussion regarding the rate review). On July 10, 2019, the ACC adopted the Administrative Law Judge’s amended Recommended Opinion and Order along with several ACC Commissioner amendments and an amendment incorporating the results of the rate review and resolved the Complaint. See “Rate Plan Comparison Tool and Investigation” below for information regarding a review and investigation pertaining to the rate plan comparison tool offered to APS customers and other related issues. ACC Review of APS 2017 Rate Case Decision On December 24, 2018, certain ACC Commissioners filed a letter stating that because the ACC had received a substantial number of complaints that the rate increase authorized by the 2017 Rate Case Decision was much more than anticipated, they believe there is a possibility that APS is earning more than was authorized by the 2017 Rate Case Decision. Accordingly, the ACC Commissioners requested the ACC Staff to perform a rate review of APS using calendar year 2018 as a test year. The ACC Commissioners also asked the ACC Staff to evaluate APS’s efforts to educate its customers regarding the new rates approved in the 2017 Rate Case Decision. On June 4, 2019, the ACC Staff filed a proposed order regarding the rate review of the 2017 Rate Case Decision. On June 11, 2019, the ACC Commissioners approved the proposed ACC Staff order with amendments. The key provisions of the amended order include the following: • APS must file a rate case no later than October 31, 2019, using a June 30, 2019 test-year; • until the conclusion of the rate case being filed no later than October 31, 2019, APS must provide information on customer bills that shows how much a customer would pay on their most economical rate given their actual usage during each month; • APS customers can switch rate plans during an open enrollment period of six months; • APS must identify customers whose bills have increased by more than 9% and that are not on the most economical rate and provide such customers with targeted education materials and an opportunity to switch rate plans; • APS must provide grandfathered net metering customers on legacy demand rates an opportunity to switch to another legacy rate to enable such customers to fully benefit from legacy net metering rates; • APS must fund and implement a supplemental customer education and outreach program to be developed with and administered by ACC Staff and a third-party consultant; and • APS must fund and organize, along with the third-party consultant, a stakeholder group to suggest better ways to communicate the impact of changes to adjustor cost recovery mechanisms (see below for discussion on cost recovery mechanisms), including more effective ways to educate customers on rate plans and to reduce energy usage. APS filed its rate case on October 31, 2019 (see “2019 Retail Rate Case Filing with the Arizona Corporation Commission” above for more information). APS does not believe that the implementation of the other key provisions of the amended order regarding the rate review will have a material impact on its financial position, results of operations or cash flows. On May 19, 2020, the ACC Staff filed a third-party consultant’s report which evaluated the effectiveness of APS’s customer outreach and education program related to the 2017 Rate Case Decision. On May 29, 2020, the Chairman of the ACC filed a letter with the ACC in response to this report and is alleging that APS is out of compliance with the 2017 Rate Case Decision and is over-earning. The Chairman proposed that the current rates should be classified as interim rates and customers held harmless if APS’s activities have caused the rates set in the 2017 Rate Case Decision to not be just and reasonable. Also, on May 29, 2020, a second commissioner filed a letter with the ACC agreeing with the Chairman’s assertions and further asserting that the 2017 Rate Case Decision should be re-opened. On June 18, 2020, at an ACC Open Meeting, the matters raised in these letters were discussed. The ACC did not vote to move forward with any adjustments to APS’s current rates. APS is monitoring this matter, but believes that the proposals are not legal and further that APS has not over-earned. The ACC voted to administratively close this docket on November 4, 2020. Cost Recovery Mechanisms APS has received regulatory decisions that allow for more timely recovery of certain costs outside of a general retail rate case through the following recovery mechanisms. Renewable Energy Standard . In 2006, the ACC approved the RES. Under the RES, electric utilities that are regulated by the ACC must supply an increasing percentage of their retail electric energy sales from eligible renewable resources, including solar, wind, biomass, biogas and geothermal technologies. In order to achieve these requirements, the ACC allows APS to include a RES surcharge as part of customer bills to recover the approved amounts for use on renewable energy projects. Each year, APS is required to file a five-year implementation plan with the ACC and seek approval for funding the upcoming year’s RES budget. In 2015, the ACC revised the RES rules to allow the ACC to consider all available information, including the number of rooftop solar arrays in a utility’s service territory, to determine compliance with the RES. On November 20, 2017, APS filed an updated 2018 RES budget to include budget adjustments for APS Solar Communities (formerly known as AZ Sun II), which was approved as part of the 2017 Rate Case Decision. APS Solar Communities is a 3-year program authorizing APS to spend $10 million to $15 million in capital costs each year to install utility-owned DG systems for low to moderate income residential homes, non-profit entities, Title I schools and rural government facilities. The 2017 Rate Case Decision provided that all operations and maintenance expenses, property taxes, marketing and advertising expenses, and the capital carrying costs for this program will be recovered through the RES. On June 29, 2018, APS filed its 2019 RES Implementation Plan and proposed a budget of approximately $89.9 million. APS’s budget request supports existing approved projects and commitments and requests a permanent waiver of the residential distributed energy requirement for 2019 contained in the RES rules. On October 29, 2019, the ACC approved the 2019 RES Implementation Plan including a waiver of the residential distributed energy requirements for the 2019 implementation year. On July 1, 2019, APS filed its 2020 RES Implementation Plan and proposed a budget of approximately $86.3 million. APS’s budget request supports existing approved projects and commitments and requests a permanent waiver of the residential distributed energy requirement for 2020 contained in the RES rules. On September 23, 2020, the ACC approved the 2020 RES Implementation Plan including a waiver of the residential distributed energy requirements for the 2020 implementation year. In addition, the ACC approved the implementation of a new pilot program that incentivizes Arizona households to install at-home battery systems. Recovery of the costs associated with the pilot will be addressed in the 2021 DSM Plan. On July 1, 2020, APS filed its 2021 RES Implementation Plan and proposed a budget of approximately $84.7 million. APS’s budget request supports existing approved projects and commitments and requests a permanent waiver of the residential distributed energy requirement for 2021 contained in the RES rules. In the 2021 RES Implementation Plan, APS requests $4.5 million to meet revenue requirements associated with the APS Solar Communities program to complete installations delayed as a result of the COVID-19 pandemic in 2020. The ACC has not yet ruled on the 2021 RES Implementation Plan. On July 15, 2020, ACC Staff issued final draft rules which, if approved, would require APS to meet certain clean energy standards, obtain approval for its action plan included in its IRP, and seek cost recovery in a rate process. APS cannot predict the outcome of this matter. See “Energy Modernization Plan” below for more information. Demand Side Management Adjustor Charge . The ACC EES requires APS to submit a Demand Side Management Implementation Plan (“DSM Plan”) annually for review by and approval of the ACC. Verified energy savings from APS’s resource savings projects can be counted toward compliance with the Electric Energy Efficiency Standards; however, APS is not allowed to count savings from systems savings projects toward determination of the achievement of performance incentives, nor may APS include savings from these system savings projects in the calculation of its LFCR mechanism (see below for discussion of the LFCR). On September 1, 2017, APS filed its 2018 DSM Plan, which proposed modifications to the demand side management portfolio to better meet system and customer needs by focusing on peak demand reductions, storage, load shifting and demand response programs in addition to traditional energy savings measures. The 2018 DSM Plan sought a requested budget of $52.6 million and requested a waiver of the Electric Energy Efficiency Standard for 2018. On November 14, 2017, APS filed an amended 2018 DSM Plan, which revised the allocations between budget items to address customer participation levels, but kept the overall budget at $52.6 million. On December 31, 2018, APS filed its 2019 DSM Plan, which requested a budget of $34.1 million and focused on DSM strategies to better meet system and customer needs, such as peak demand reduction, load shifting, storage and electrification strategies. On December 31, 2019, APS filed its 2020 DSM Plan, which requested a budget of $51.9 million and continued APS’s focus on DSM strategies such as peak demand reduction, load shifting, storage and electrification strategies. The 2020 DSM Plan addressed all components of the pending 2018 and 2019 DSM plans, which enabled the ACC to review the 2020 DSM Plan only. On May 15, 2020, APS filed an amended 2020 DSM Plan to provide assistance to customers experiencing economic impacts of the COVID-19 pandemic. The amended 2020 DSM Plan requested the same budget amount of $51.9 million. On September 23, 2020, the ACC approved the amended 2020 DSM Plan. On April 17, 2020, APS filed an application with the ACC requesting a COVID-19 emergency relief package to provide additional assistance to its customers. On May 5, 2020, the ACC approved APS returning $36 million that had been collected through the DSM Adjustor Charge, but not allocated for current DSM programs, directly to customers through a bill credit in June 2020. As of December 31, 2020, APS had refunded approximately $43 million to customers. The additional $7 million over the approved amount was the result of the kWh credit being based on historic consumption which was different than actual consumption in the refund period. This difference was recorded to the DSM balancing account and will be addressed in subsequent DSM filings. See “COVID-19 Pandemic” above for more information. On December 31, 2020, APS filed its 2021 DSM Plan, which requested a budget of $63.7 million and continues APS’s focus on DSM strategies, such as peak demand reduction, load shifting, storage and electrification strategies, as well as enhanced assistance to customers impacted economically by COVID-19. The ACC has not yet ruled on the APS 2021 DSM Plan. Power Supply Adjustor Mechanism and Balance. The PSA provides for the adjustment of retail rates to reflect variations primarily in retail fuel and purchased power costs. The PSA is subject to specified parameters and procedures, including the following: • APS records deferrals for recovery or refund to the extent actual retail fuel and purchased power costs vary from the Base Fuel Rate; • an adjustment to the PSA rate is made annually each February 1 (unless otherwise approved by the ACC) and goes into effect automatically unless suspended by the ACC; • the PSA uses a forward-looking estimate of fuel and purchased power costs to set the annual PSA rate, which is reconciled to actual costs experienced for each PSA Year (February 1 through January 31) (see the following bullet point); • the PSA rate includes (a) a “Forward Component,” under which APS recovers or refunds differences between expected fuel and purchased power costs for the upcoming calendar year and those embedded in the Base Fuel Rate; (b) a “Historical Component,” under which differences between actual fuel and purchased power costs and those recovered or refunded through the combination of the Base Fuel Rate and the Forward Component are recovered during the next PSA Year; and (c) a “Transition Component,” under which APS may seek mid-year PSA changes due to large variances between actual fuel and purchased power costs and the combination of the Base Fuel Rate and the Forward Component; and • the PSA rate may not be increased or decreased more than $0.004 per kWh in a year without permission of the ACC. The following table shows the changes in the deferred fuel and purchased power regulatory asset for 2020 and 2019 (dollars in thousands): Twelve Months Ended 2020 2019 Beginning balance $ 70,137 $ 37,164 Deferred fuel and purchased power costs — current period 93,651 82,481 Amounts refunded/(charged) to customers 12,047 (49,508) Ending balance $ 175,835 $ 70,137 The PSA rate for the PSA year beginning February 1, 2019 was $0.001658 per kWh, as compared to the $0.004555 per kWh for the prior year. This rate was comprised of a forward component of $0.000536 per kWh and a historical component of $0.001122 per kWh. This represented a $0.002897 per kWh decrease compared to 2018. These rates went into effect as filed on February 1, 2019. On November 27, 2019, APS filed its PSA rate for the PSA year beginning February 1, 2020. That rate was $(0.000456) per kWh and consisted of a forward component of $(0.002086) per kWh and a historical component of $0.001630 per kWh. The 2020 PSA rate is a $0.002115 per kWh decrease compared to the 2019 PSA year. These rates went into effect as filed on February 1, 2020. On November 30, 2020, APS filed its PSA rate for the PSA year beginning February 1, 2021. That rate was $0.003544 per kWh and consisted of a forward component of $0.003434 per kWh and a historical component of $0.000110 per kWh. The 2021 PSA rate is a $0.004 per kWh increase compared to the 2020 PSA year. These rates were to be effective on February 1, 2021 but APS delayed the effectiveness of these rates until the first billing cycle of April 2021. On March 15, 2019, APS filed an application with the ACC requesting approval to recover the costs related to two energy storage power purchase tolling agreements through the PSA. On December 29, 2020, the ACC Staff filed its report and recommended the storage costs be included in the PSA once the systems are in-service. On January 12, 2021, the ACC approved this application. Environmental Improvement Surcharge (“EIS”). The EIS permits APS to recover the capital carrying costs (rate of return, depreciation and taxes) plus incremental operations and maintenance expenses associated with environmental improvements made outside of a test year to comply with environmental standards set by federal, state, tribal, or local laws and regulations. A filing is made on or before February 1 for qualified environmental improvements made during the prior calendar year, and the new charge becomes effective April 1 unless suspended by the ACC. There is an overall cap of $0.0005 per kWh (approximately $13 million to 14 million per year). APS’s February 1, 2021 application requested an increase in the charge to $10.3 million, or $1.5 million over the charge in effect for the 2020-2021 rate effective year. Transmission Rates, Transmission Cost Adjustor and Other Transmission Matters . In July 2008, FERC approved a modification to APS’s Open Access Transmission Tariff to allow APS to move from fixed rates to a formula rate-setting methodology in order to more accurately reflect and recover the costs that APS incurs in providing transmission services. A large portion of the rate represents charges for transmission services to serve APS’s retail customers (“Retail Transmission Charges”). In order to recover the Retail Transmission Charges, APS was previously required to file an application with, and obtain approval from, the ACC to reflect changes in Retail Transmission Charges through the TCA. Under the terms of the settlement agreement entered into in 2012 regarding APS’s rate case (“2012 Settlement Agreement”), however, an adjustment to rates to recover the Retail Transmission Charges will be made annually each June 1 and will go into effect automatically unless suspended by the ACC. The formula rate is updated each year effective June 1 on the basis of APS’s actual cost of service, as disclosed in APS’s FERC Form 1 report for the previous fiscal year. Items to be updated include actual capital expenditures made as compared with previous projections, transmission revenue credits and other items. The resolution of proposed adjustments can result in significant volatility in the revenues to be collected. APS reviews the proposed formula rate filing amounts with the ACC Staff. Any items or adjustments which are not agreed to by AP |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Certain assets and liabilities are reported differently for income tax purposes than they are for financial statement purposes. The tax effect of these differences is recorded as deferred taxes. We calculate deferred taxes using currently enacted income tax rates. APS has recorded regulatory assets and regulatory liabilities related to income taxes on its Consolidated Balance Sheets in accordance with accounting guidance for regulated operations. The regulatory assets are for certain temporary differences, primarily the allowance for equity funds used during construction, investment tax credit (“ITC”) basis adjustment and tax expense of Medicare subsidy. The regulatory liabilities primarily relate to the change in income tax rates and deferred taxes resulting from ITCs. The Tax Act reduced the corporate tax rate to 21% effective January 1, 2018. As a result of this rate reduction, the Company recognized a $1.14 billion reduction in its net deferred income tax liabilities as of December 31, 2017. In accordance with accounting for regulated companies, the effect of this rate reduction was substantially offset by a net regulatory liability. Federal income tax laws require the amortization of a majority of this net regulatory liability over the remaining regulatory life of the related property. As a result of the modifications made to the annual transmission formula rate during the second quarter of 2018, the Company began amortization of FERC jurisdictional net excess deferred tax liabilities in 2018. On March 13, 2019, the ACC approved the Company’s proposal to amortize non-depreciation related net excess deferred tax liabilities subject to its jurisdiction over a twelve-month period. As a result, the Company began amortization in March 2019. The Company recorded $14 million and $57 million of income tax benefit related to the amortization of these non-depreciation related net excess deferred tax liabilities in 2020 and 2019, respectively. On October 29, 2019, the ACC approved the Company’s proposal to amortize depreciation related net excess deferred tax liabilities subject to its jurisdiction over a 28.5-year period with amortization to retroactively begin as of January 1, 2018. The Company recorded $31 million and $62 million of income tax benefit related to amortization of these depreciation related liabilities in 2020 and 2019, respectively. (See Note 4 for more details.) In August 2018, U.S. Treasury proposed regulations that clarified bonus depreciation transition rules under the Tax Act for regulated public utility property placed in service after September 27, 2017 and before January 1, 2018. However, these proposed regulations were ambiguous with respect to regulated public utility property placed in service on or after January 1, 2018. In September 2019, U.S. Treasury issued final regulations, which replaced the August 2018 proposed regulations. These final regulations did not materially impact any tax position taken by the Company for property placed in service after September 27, 2017 and before January 1, 2018. In September 2020, U.S. Treasury issued final regulations, which clarify bonus depreciation transition rules under the Tax Act for property placed in service by regulated public utilities after December 31, 2017. The final regulations provide that certain regulated public utility property which was under construction prior to September 28, 2017 and placed in service between January 1, 2018 and December 31, 2020 continues to be eligible for bonus depreciation under the rules and bonus depreciation phase-downs in effect prior to enactment of the Tax Act. These final regulations do not materially impact any tax position taken by the Company for property which was under construction prior to September 28, 2017 and placed in service between January 1, 2018 and December 31, 2020. In accordance with regulatory requirements, APS ITCs are deferred and are amortized over the life of the related property with such amortization applied as a credit to reduce current income tax expense in the Statements of Income. Net income associated with the Palo Verde sale leaseback VIEs is not subject to tax. As a result, there is no income tax expense associated with the VIEs recorded on the Pinnacle West Consolidated and APS Consolidated Statements of Income. (See Note 18 for additional details related to the Palo Verde sale leaseback VIEs.) The following is a tabular reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties, at the beginning and end of the year that are included in accrued taxes and unrecognized tax benefits (dollars in thousands): Pinnacle West Consolidated APS Consolidated 2020 2019 2018 2020 2019 2018 Total unrecognized tax benefits, January 1 $ 43,435 $ 40,731 $ 41,966 $ 43,435 $ 40,731 $ 41,966 Additions for tax positions of the current year 3,418 3,373 3,436 3,418 3,373 3,436 Additions for tax positions of prior years 1,431 1,843 2,696 1,431 1,843 2,696 Reductions for tax positions of prior years for: Changes in judgment (1,965) (2,078) (1,764) (1,965) (2,078) (1,764) Settlements with taxing authorities — — — — — — Lapses of applicable statute of limitations (664) (434) (5,603) (664) (434) (5,603) Total unrecognized tax benefits, December 31 $ 45,655 $ 43,435 $ 40,731 $ 45,655 $ 43,435 $ 40,731 Included in the balances of unrecognized tax benefits are the following tax positions that, if recognized, would decrease our effective tax rate (dollars in thousands): Pinnacle West Consolidated APS Consolidated 2020 2019 2018 2020 2019 2018 Tax positions, that if recognized, would decrease our effective tax rate $ 25,714 $ 22,813 $ 19,504 $ 25,714 $ 22,813 $ 19,504 As of the balance sheet date, the tax year ended December 31, 2017 and all subsequent tax years remain subject to examination by the IRS. With a few exceptions, we are no longer subject to state income tax examinations by tax authorities for years before 2016. We reflect interest and penalties, if any, on unrecognized tax benefits in the Pinnacle West Consolidated and APS Consolidated Statements of Income as income tax expense. The amount of interest expense or benefit recognized related to unrecognized tax benefits are as follows (dollars in thousands): Pinnacle West Consolidated APS Consolidated 2020 2019 2018 2020 2019 2018 Unrecognized tax benefit interest expense/(benefit) recognized $ 266 $ 459 $ (780) $ 266 $ 459 $ (780) Following are the total amount of accrued liabilities for interest recognized related to unrecognized benefits that could reverse and decrease our effective tax rate to the extent matters are settled favorably (dollars in thousands): Pinnacle West Consolidated APS Consolidated 2020 2019 2018 2020 2019 2018 Unrecognized tax benefit interest accrued $ 1,855 $ 1,589 $ 1,130 $ 1,855 $ 1,589 $ 1,130 Additionally, as of December 31, 2020, we have recognized less than $1 million of interest expense to be paid on the underpayment of income taxes for certain adjustments that we have filed, or will file, with the IRS. The components of income tax expense are as follows (dollars in thousands): Pinnacle West Consolidated APS Consolidated Year Ended December 31, Year Ended December 31, 2020 2019 2018 2020 2019 2018 Current: Federal $ 11,869 $ (13,551) $ 18,375 $ 57,299 $ (54,697) $ 88,180 State 1,932 3,195 3,342 99 695 1,877 Total current 13,801 (10,356) 21,717 57,398 (54,002) 90,057 Deferred: Federal 53,398 (14,982) 94,721 15,122 29,321 32,436 State 10,974 9,565 17,464 16,244 15,109 22,321 Total deferred 64,372 (5,417) 112,185 31,366 44,430 54,757 Income tax expense/(benefit) $ 78,173 $ (15,773) $ 133,902 $ 88,764 $ (9,572) $ 144,814 The following chart compares pretax income at the 21% statutory federal income tax rate to income tax expense (dollars in thousands): Pinnacle West Consolidated APS Consolidated Year Ended December 31, Year Ended December 31, 2020 2019 2018 2020 2019 2018 Federal income tax expense at statutory rate $ 136,127 $ 113,828 $ 139,533 $ 142,020 $ 120,790 $ 154,260 Increases (reductions) in tax expense resulting from: State income tax net of federal income tax benefit 19,146 18,599 23,115 20,124 19,267 24,531 State income tax credits net of federal income tax benefit (8,951) (8,519) (6,704) (7,213) (6,781) (5,440) Nondeductible expenditures associated with ballot initiative — — 7,879 — — — Stock compensation 34 (2,252) (1,804) 183 (1,054) (780) Excess deferred income taxes — Tax Cuts and Jobs Act (50,543) (124,082) (6,725) (50,543) (124,082) (4,715) Allowance for equity funds used during construction (see Note 1) (2,747) (2,476) (7,231) (2,747) (2,476) (7,231) Palo Verde VIE noncontrolling interest (see Note 18) (4,094) (4,094) (4,094) (4,094) (4,094) (4,094) Investment tax credit amortization (7,510) (6,851) (6,742) (7,510) (6,851) (6,742) Other (3,289) 74 (3,325) (1,456) (4,291) (4,975) Income tax expense/(benefit) $ 78,173 $ (15,773) $ 133,902 $ 88,764 $ (9,572) $ 144,814 The components of the net deferred income tax liability were as follows (dollars in thousands): Pinnacle West Consolidated APS Consolidated December 31, December 31, 2020 2019 2020 2019 DEFERRED TAX ASSETS Risk management activities $ 4,287 $ 17,552 $ 4,287 $ 17,552 Regulatory liabilities: Excess deferred income taxes — Tax Cuts and Jobs Act 319,091 335,877 319,091 335,877 Asset retirement obligation and removal costs 157,470 143,011 157,470 143,011 Unamortized investment tax credits 50,879 52,236 50,879 52,236 Other postretirement benefits 95,778 43,841 95,778 43,841 Other 43,551 52,382 43,551 52,382 Operating lease liabilities 107,853 15,497 107,414 15,497 Pension liabilities 45,853 73,210 40,168 67,976 Coal reclamation liabilities 42,065 40,837 42,065 40,837 Renewable energy incentives 25,355 28,066 25,355 28,066 Credit and loss carryforwards 26,460 54,795 8,034 10,992 Other 78,113 47,605 78,113 55,451 Total deferred tax assets 996,755 904,909 972,205 863,718 DEFERRED TAX LIABILITIES Plant-related (2,489,899) (2,448,458) (2,489,899) (2,448,458) Risk management activities (1,174) (27) (1,174) (27) Pension and other postretirement assets (123,462) (21,892) (122,580) (21,458) Other special use funds (42,927) (44,507) (42,927) (44,507) Operating lease right-of-use assets (107,853) (15,497) (107,414) (15,497) Regulatory assets: Allowance for equity funds used during construction (41,038) (40,023) (41,038) (40,023) Deferred fuel and purchased power (47,673) (35,162) (47,673) (35,162) Pension benefits (116,219) (163,339) (116,219) (163,339) Retired power plant costs (35,214) (42,228) (35,214) (42,228) Other (106,227) (82,722) (106,227) (82,722) Other (20,472) (3,393) (5,513) (3,393) Total deferred tax liabilities (3,132,158) (2,897,248) (3,115,878) (2,896,814) Deferred income taxes — net $ (2,135,403) $ (1,992,339) $ (2,143,673) $ (2,033,096) As of December 31, 2020, PNW Consolidated deferred tax assets for credit and loss carryforwards relate to federal general business credits of approximately $35 million, which first begin to expire in 2036 and state credit carryforwards net of federal benefit of $33 million, which first begin to expire in 2023. PNW Consolidated credit and loss carryforwards amount above has been reduced by $42 million of unrecognized tax benefits. As of December 31, 2020, APS Consolidated deferred tax assets for credit and loss carryforwards relate to state credit carryforwards net of federal benefit of $16 million, which first begin to expire in 2024. APS Consolidated credit and loss carryforwards amount above has been reduced by $8 million of unrecognized tax benefits. |
Lines of Credit and Short-Term
Lines of Credit and Short-Term Borrowings | 12 Months Ended |
Dec. 31, 2020 | |
Lines of Credit and Short-Term Borrowings | |
Lines of Credit and Short-Term Borrowings | Lines of Credit and Short-Term Borrowings Pinnacle West and APS maintain committed revolving credit facilities in order to enhance liquidity and provide credit support for their commercial paper programs, to refinance indebtedness, and for other general corporate purposes. The table below presents the consolidated credit facilities and the amounts available and outstanding as of December 31, 2020 and 2019 (dollars in thousands): December 31, 2020 December 31, 2019 Pinnacle West APS Total Pinnacle West APS Total Commitments under Credit Facilities $ 231,000 $ 1,000,000 $ 1,231,000 $ 250,000 $ 1,000,000 $ 1,250,000 Outstanding Commercial Paper, Term Loan and Revolving Credit Facility Borrowings (169,000) — (169,000) (114,675) — (114,675) Amount of Credit Facilities Available $ 62,000 $ 1,000,000 $ 1,062,000 $ 135,325 $ 1,000,000 $ 1,135,325 Weighted-Average Commitment Fees 0.125% 0.100% 0.125% 0.100% Pinnacle West On May 5, 2020, Pinnacle West refinanced its 364-day $50 million term loan agreement that would have matured on May 7, 2020 with a new 364-day $31 million term loan agreement that matures May 4, 2021. Borrowings under the agreement bear interest at Eurodollar Rate plus 1.40% per annum. At December 31, 2020, Pinnacle West had $19 million in outstanding borrowings under the agreement. At December 31, 2020, Pinnacle West had a $200 million revolving credit facility that matures in July 2023. Pinnacle West has the option to increase the amount of the facility up to a maximum of $300 million upon the satisfaction of certain conditions and with the consent of the lenders. Interest rates are based on Pinnacle West’s senior unsecured debt credit ratings. The facility is available to support Pinnacle West’s $200 million commercial paper program, for bank borrowings or for issuances of letters of credits. At December 31, 2020, Pinnacle West had no outstanding borrowings under its credit facility, no letters of credit outstanding and $150 million of commercial paper borrowings. APS At December 31, 2020, APS had two revolving credit facilities totaling $1 billion, including a $500 million credit facility that matures in June 2022 and a $500 million facility that matures in July 2023. APS may increase the amount of each facility up to a maximum of $700 million, for a total of $1.4 billion, upon the satisfaction of certain conditions and with the consent of the lenders. Interest rates are based on APS’s senior unsecured debt credit ratings. These facilities are available to support APS’s $500 million commercial paper program, for bank borrowings or for issuances of letters of credit. At December 31, 2020, APS had no outstanding borrowings under its revolving credit facilities, no letters of credit outstanding or commercial paper borrowings. See “Financial Assurances” in Note 11 for a discussion of APS’s other outstanding letters of credit. Debt Provisions On December 17, 2020, the ACC issued a financing order in which, subject to specified parameters and procedures, it approved APS’s short-term debt authorization equal to a sum of (i) 7% of APS’s capitalization, and (ii) $500 million (which is required to be used for costs relating to purchases of natural gas and power). (See Note 7 for additional long-term debt provisions.) |
Long-Term Debt and Liquidity Ma
Long-Term Debt and Liquidity Matters | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Liquidity Matters | Long-Term Debt and Liquidity Matters All of Pinnacle West’s and APS’s debt is unsecured. The following table presents the components of long-term debt on the Consolidated Balance Sheets outstanding at December 31, 2020 and 2019 (dollars in thousands): Maturity Interest December 31, Dates (a) Rates 2020 2019 APS Pollution control bonds: Variable 2029 (b) $ 35,975 $ 35,975 Fixed 2024 4.70% — 115,150 Total pollution control bonds 35,975 151,125 Senior unsecured notes 2024-2050 2.55%-6.88% 5,830,000 4,875,000 Term loans (c) — 200,000 Unamortized discount (15,900) (12,434) Unamortized premium 14,781 7,423 Unamortized debt issuance cost (46,911) (37,981) Total APS long-term debt 5,817,945 5,183,133 Less current maturities — 350,000 Total APS long-term debt less current maturities 5,817,945 4,833,133 Pinnacle West Senior unsecured notes 2025 1.3% 500,000 300,000 Term loan (d) — 150,000 Unamortized discount (44) (57) Unamortized debt issuance cost (3,635) (518) Total Pinnacle West long-term debt 496,321 449,425 Less current maturities — 450,000 Total Pinnacle West long-term debt less current maturities 496,321 (575) TOTAL LONG-TERM DEBT LESS CURRENT MATURITIES $ 6,314,266 $ 4,832,558 (a) This schedule does not reflect the timing of redemptions that may occur prior to maturities. (b) The weighted-average rate for the variable rate pollution control bonds was 0.18% at December 31, 2020 and 1.54% at December 31, 2019. (c) The weighted-average interest rate was 2.12% at December 31, 2019. This term loan was repaid on May 26, 2020. See additional details below. (d) The weighted-average interest rate was 2.20% at December 31, 2019. This term loan was repaid on June 19, 2020. See additional details below. The following table shows principal payments due on Pinnacle West’s and APS’s total long-term debt (dollars in thousands): Year Consolidated Consolidated 2021 $ — $ — 2022 — — 2023 — — 2024 250,000 250,000 2025 800,000 300,000 Thereafter 5,315,975 5,315,975 Total $ 6,365,975 $ 5,865,975 Debt Fair Value Our long-term debt fair value estimates are classified within Level 2 of the fair value hierarchy. The following table represents the estimated fair value of our long-term debt, including current maturities (dollars in thousands): As of As of Carrying Fair Value Carrying Fair Value Pinnacle West $ 496,321 $ 509,050 $ 449,425 $ 450,822 APS 5,817,945 7,103,791 5,183,133 5,743,570 Total $ 6,314,266 $ 7,612,841 $ 5,632,558 $ 6,194,392 Credit Facilities and Debt Issuances Pinnacle West On June 17, 2020, Pinnacle West issued $500 million of 1.3% unsecured senior notes that mature June 15, 2025. The net proceeds from the sale were used to repay early its $150 million term loan facility set to mature on December 21, 2020, to repay short-term indebtedness consisting of commercial paper and replenish cash incurred or used to fund capital expenditures, to redeem prior to maturity our $300 million, 2.25% senior notes due November 30, 2020, and for general corporate purposes. On December 23, 2020, Pinnacle West entered into a $150 million term loan facility that matures June 2022. The proceeds were received on January 4, 2021 and used for general corporate purposes. We recognized the term loan facility as long-term debt upon settlement on January 4, 2021. APS On January 15, 2020, APS repaid at maturity the remaining $150 million of the $250 million aggregate principal amount of its 2.2% senior notes. On May 22, 2020, APS issued $600 million of 3.35% unsecured senior notes that mature May 15, 2050. The net proceeds from the sale were used to repay early its $200 million term loan facility and to repay short-term indebtedness, consisting of commercial paper and revolver borrowings, and to replenish cash used to fund capital expenditures. On September 11, 2020, APS issued $400 million of 2.65% unsecured senior notes that mature September 15, 2050. The net proceeds from the sale will be used to replenish cash used for previous eligible green expenditures and fund future eligible green expenditures. On November 19, 2020, APS reopened its $300 million, 2.6% unsecured senior notes that mature on August 15, 2029, and issued an additional $105 million of 2.6% unsecured senior notes. The aggregate balance of $405 million will mature on August 15, 2029. The net proceeds from the sale, together with funds made available from other sources, were used to redeem, prior to maturity, no later than 20 days after the date that the new notes were issued, (i) the $49.4 million outstanding principal amount of 4.7% City of Farmington, New Mexico Pollution Control Revenue Refunding Bonds (Arizona Public Service Company Four Corners Project), 1994 Series A, and (ii) the $65.75 million outstanding principal amount of 4.7% City of Farmington, New Mexico Pollution Control Revenue Refunding Bonds (Arizona Public Service Company Four Corners Project), 1994 Series B. On December 28, 2020, Pinnacle West contributed $150 million into APS in the form of an equity infusion. APS used this contribution to repay short-term indebtedness. See “Lines of Credit and Short-Term Borrowings” in Note 6 and “Financial Assurances” in Note 11 for discussion of APS’s separate outstanding letters of credit. Debt Provisions Pinnacle West’s and APS’s debt covenants related to their respective bank financing arrangements include maximum debt to capitalization ratios. Pinnacle West and APS comply with this covenant. For both Pinnacle West and APS, this covenant requires that the ratio of consolidated debt to total consolidated capitalization not exceed 65%. At December 31, 2020, the ratio was approximately 54% for Pinnacle West and 49% for APS. Failure to comply with such covenant levels would result in an event of default, which, generally speaking, would require the immediate repayment of the debt subject to the covenants and could cross-default other debt. See further discussion of “cross-default” provisions below. Neither Pinnacle West’s nor APS’s financing agreements contain “rating triggers” that would result in an acceleration of the required interest and principal payments in the event of a rating downgrade. However, our bank credit agreements contain a pricing grid in which the interest rates we pay for borrowings thereunder are determined by our current credit ratings. All of Pinnacle West’s loan agreements contain “cross-default” provisions that would result in defaults and the potential acceleration of payment under these loan agreements if Pinnacle West or APS were to default under certain other material agreements. All of APS’s bank agreements contain “cross-default” provisions that would result in defaults and the potential acceleration of payment under these bank agreements if APS were to default under certain other material agreements. Pinnacle West and APS do not have a material adverse change restriction for credit facility borrowings. |
Retirement Plans and Other Post
Retirement Plans and Other Postretirement Benefits | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Retirement Plans and Other Postretirement Benefits | Retirement Plans and Other Postretirement Benefits Pinnacle West sponsors a qualified defined benefit and account balance pension plan (The Pinnacle West Capital Corporation Retirement Plan) and a non-qualified supplemental excess benefit retirement plan for the employees of Pinnacle West and its subsidiaries. All new employees participate in the account balance plan. Defined benefit plans specify the amount of benefits a plan participant is to receive using information about the participant. The pension plan covers nearly all employees. The supplemental excess benefit retirement plan covers officers of the Company and highly compensated employees designated for participation by the Board of Directors. Our employees do not contribute to the plans. We calculate the benefits based on age, years of service and pay. Pinnacle West also sponsors other postretirement benefit plans (Pinnacle West Capital Corporation Group Life and Medical Plan and Pinnacle West Capital Corporation Post-65 Retiree Health Reimbursement Arrangement “HRA”) for the employees of Pinnacle West and its subsidiaries. These plans provide medical and life insurance benefits to retired employees. Employees must retire to become eligible for these retirement benefits, which are based on years of service and age. For the medical insurance plan, retirees make contributions to cover a portion of the plan costs. For the life insurance plan, retirees do not make contributions. We retain the right to change or eliminate these benefits. Pinnacle West uses a December 31 measurement date each year for its pension and other postretirement benefit plans. The market-related value of our plan assets is their fair value at the measurement date. (See Note 13 for further discussion of how fair values are determined.) Due to subjective and complex judgments, which may be required in determining fair values, actual results could differ from the results estimated through the application of these methods. Under the HRA, included in the other postretirement benefit plan, the Company provides a subsidy to retirees to defray the cost of a Medicare supplemental policy. In prior years, we had been assuming a 4.75% escalation of these benefits; however, actual escalation has been significantly less than this assumption. Accordingly, during 2020 and for future periods, the escalation assumption was reduced to 2.00% (see weighted-average assumption table below). This escalation factor assumption change, among other factors, resulted in an increase in the over-funded status of the other postretirement benefit plan as of December 31, 2020. As a result, on January 4, 2021, we initiated the transfer of approximately $106 million of investment assets from the other postretirement benefit plan into the Active Union Employee Medical Account Trust. The Active Union Employee Medical Account is an existing trust account that holds investments restricted for paying active union employee medical costs (see Note 19). The transfer of other postretirement benefit plan investment assets into the Active Union Employee Medical Account permits access to approximately $106 million of assets for the sole purpose of paying active union employee medical benefits. This transfer of investment assets into the Active Union Employee Medical Account is consistent with the terms of a similar 2018 transaction. A significant portion of the changes in the actuarial gains and losses of our pension and postretirement plans is attributable to APS and are recoverable in rates. Accordingly, these changes are recorded as a regulatory asset or regulatory liability (see Note 4). The following table provides details of the plans’ net periodic benefit costs and the portion of these costs charged to expense (including administrative costs and excluding amounts capitalized as overhead construction or billed to electric plant participants) (dollars in thousands): Pension Plans Other Benefits Plans 2020 2019 2018 2020 2019 2018 Service cost-benefits earned during the period $ 56,233 $ 49,902 $ 56,669 $ 22,236 $ 18,369 $ 21,100 Interest cost on benefit obligation 118,567 136,843 124,689 25,857 29,894 28,147 Expected return on plan assets (187,443) (171,884) (182,853) (40,077) (38,412) (42,082) Amortization of: Prior service credit — — — (37,575) (37,821) (37,842) Net actuarial loss 34,612 42,584 32,082 — — — Net periodic benefit cost/(benefit) $ 21,969 $ 57,445 $ 30,587 $ (29,559) $ (27,970) $ (30,677) Portion of cost/(benefit) charged to expense $ 3,386 $ 30,312 $ 10,120 $ (20,966) $ (19,859) $ (21,426) The following table shows the plans’ changes in the benefit obligations and funded status (dollars in thousands): Pension Plans Other Benefits Plans 2020 2019 2020 2019 Change in Benefit Obligation Benefit obligation at January 1 $ 3,613,114 $ 3,190,626 $ 746,924 $ 676,771 Service cost 56,233 49,902 22,236 18,369 Interest cost 118,567 136,843 25,857 29,894 Benefit payments (191,704) (177,882) (31,511) (32,486) Actuarial (gain) loss 306,657 413,625 (139,472) 54,376 Benefit obligation at December 31 3,902,867 3,613,114 624,034 746,924 Change in Plan Assets Fair value of plan assets at January 1 3,318,351 2,733,476 837,494 723,677 Actual return on plan assets 642,373 602,030 150,076 144,095 Employer contributions 100,000 150,000 — — Benefit payments (174,180) (167,155) (26,405) (30,278) Fair value of plan assets at December 31 3,886,544 3,318,351 961,165 837,494 Funded Status at December 31 $ (16,323) $ (294,763) $ 337,131 $ 90,570 The following table shows information for pension plans with an accumulated obligation in excess of plan assets (dollars in thousands): As of December 31, 2020 2019 Accumulated benefit obligation 171,672 169,091 Fair value of plan assets — — The Pinnacle West Capital Corporation Retirement Plan is more than 100% funded on an accumulated benefit obligation basis at December 31, 2020 and December 31, 2019, therefore the only pension plan with an accumulated benefit obligation in excess of plan assets in 2020 and 2019 is a non-qualified supplemental excess benefit retirement plan. The following table shows information for pension plans with a projected benefit obligation in excess of plan assets (dollars in thousands): As of December 31, 2020 2019 Projected benefit obligation 182,184 3,613,114 Fair value of plan assets — 3,318,351 The Pinnacle West Capital Corporation Retirement Plan is more than 100% funded on a projected benefit obligation basis at December 31, 2020, therefore the only pension plan with a projected benefit obligation in excess of plan assets in 2020 is a non-qualified supplemental excess benefit retirement plan. The following table shows the amounts recognized on the Consolidated Balance Sheets (dollars in thousands): Pension Plans Other Benefits Plans 2020 2019 2020 2019 Noncurrent asset $ 165,861 $ — $ 337,131 $ 90,570 Current liability (15,700) (14,578) — — Noncurrent liability (166,484) (280,185) — — Net amount recognized $ (16,323) $ (294,763) $ 337,131 $ 90,570 The following table shows the details related to accumulated other comprehensive loss as of December 31, 2020 and 2019 (dollars in thousands): Pension Plans Other Benefits Plans 2020 2019 2020 2019 Net actuarial loss (gain) $ 552,301 $ 735,186 $ (237,233) $ 12,238 Prior service credit — — (152,337) (189,912) APS’s portion recorded as a regulatory (asset) liability (469,953) (660,223) 387,293 177,209 Income tax expense (benefit) (20,364) (18,546) 1,018 570 Accumulated other comprehensive loss (gain) $ 61,984 $ 56,417 $ (1,259) $ 105 The following table shows the weighted-average assumptions used for both the pension and other benefits to determine benefit obligations and net periodic benefit costs: Benefit Obligations Benefit Costs 2020 2019 2020 2019 2018 Discount rate – pension plans 2.53 % 3.30 % 3.30 % 4.34 % 3.65 % Discount rate – other benefits plans 2.63 % 3.42 % 3.42 % 4.39 % 3.71 % Rate of compensation increase 4.00 % 4.00 % 4.00 % 4.00 % 4.00 % Expected long-term return on plan assets - pension plans N/A N/A 5.75 % 6.25 % 6.05 % Expected long-term return on plan assets - other benefit plans N/A N/A 4.85 % 5.40 % 5.40 % Initial healthcare cost trend rate (pre-65 participants) 6.50 % 7.00 % 7.00 % 7.00 % 7.00 % Ultimate healthcare cost trend rate (pre-65 participants) 4.75 % 4.75 % 4.75 % 4.75 % 4.75 % Number of years to ultimate trend rate (pre-65 participants) 5 6 5 7 8 Initial and ultimate healthcare cost trend rate (post-65 participants) (a) 2.00 % 4.75 % 4.75 % 4.75 % 4.75 % Interest crediting rate – cash balance pension plans 4.50 % 4.50 % 4.50 % 4.50 % 4.50 % (a) See discussion above relating to this assumptions impact on benefit obligations and the January 2021 asset transfer to the Active Union Employee Medical Account. In selecting the pretax expected long-term rate of return on plan assets, we consider past performance and economic forecasts for the types of investments held by the plan. For 2021, we are assuming a 5.30% long-term rate of return for pension assets and 5.05% (before tax) for other benefit assets, which we believe is reasonable given our asset allocation in relation to historical and expected performance. In selecting our healthcare trend rates, we consider past performance and forecasts of healthcare costs. Plan Assets The Board of Directors has delegated oversight of the pension and other postretirement benefit plans’ assets to an Investment Management Committee (“Committee”). The Committee has adopted investment policy statements (“IPS”) for the pension and the other postretirement benefit plans’ assets. The investment strategies for these plans include external management of plan assets, and prohibition of investments in Pinnacle West securities. The overall strategy of the pension plan’s IPS is to achieve an adequate level of trust assets relative to the benefit obligations. To achieve this objective, the plan’s investment policy provides for mixes of investments including long-term fixed income assets and return-generating assets. The target allocation between return-generating and long-term fixed income assets is defined in the IPS and is a function of the plan’s funded status. The plan’s funded status is reviewed on at least a monthly basis. Changes in the value of long-term fixed income assets, also known as liability-hedging assets, are intended to offset changes in the benefit obligations due to changes in interest rates. Long-term fixed income assets consist primarily of fixed income debt securities issued by the U.S. Treasury and other government agencies, U.S. Treasury Futures Contracts, and fixed income debt securities issued by corporations. Long-term fixed income assets may also include interest rate swaps, and other instruments. Return-generating assets are intended to provide a reasonable long-term rate of investment return with a prudent level of volatility. Return-generating assets are composed of U.S. equities, international equities, and alternative investments. International equities include investments in both developed and emerging markets. Alternative investments may include investments in real estate, private equity and various other strategies. The plan may also hold investments in return-generating assets by holding securities in partnerships, common and collective trusts and mutual funds. Based on the IPS, and given the pension plan’s funded status at year-end 2020, the target and actual allocation for the pension plan at December 31, 2020 are as follows: Pension Plans Target Allocation Actual Allocation Long-term fixed income assets 72 % 68 % Return-generating assets 28 % 32 % Total 100 % 100 % The permissible range is within +/-3% of the target allocation shown in the above table, and also considers the plan’s funded status. At December 31, 2020, the return-seeking assets were slightly outside the target allocation permissible range and were rebalanced to within the target range during January 2021. The following table presents the additional target allocations, as a percent of total pension plan assets, for the return-generating assets: Asset Class Target Allocation Equities in US and other developed markets 17 % Equities in emerging markets 6 % Alternative investments 5 % Total 28 % The pension plan IPS does not provide for a specific mix of long-term fixed income assets, but does expect the average credit quality of such assets to be investment grade. As of December 31, 2020, the asset allocation for other postretirement benefit plan assets is governed by the IPS for those plans, which provides for different asset allocation target mixes depending on the characteristics of the liability. Some of these asset allocation target mixes vary with the plan’s funded status. The following table presents the actual allocations of the investment for the other postretirement benefit plan at December 31, 2020: Other Benefits Plans Actual Allocation Long-term fixed income assets 55 % Return-generating assets 45 % Total 100 % See Note 13 for a discussion on the fair value hierarchy and how fair value methodologies are applied. The plans invest directly in fixed income, U.S. Treasury Futures Contracts, and equity securities, in addition to investing indirectly in fixed income securities, equity securities and real estate through the use of mutual funds, partnerships and common and collective trusts. Equity securities held directly by the plans are valued using quoted active market prices from the published exchange on which the equity security trades, and are classified as Level 1. U.S. Treasury Futures Contracts are valued using the quoted active market prices from the exchange on which they trade, and are classified as Level 1. Fixed income securities issued by the U.S. Treasury held directly by the plans are valued using quoted active market prices, and are classified as Level 1. Fixed income securities issued by corporations, municipalities, and other agencies are primarily valued using quoted inactive market prices, or quoted active market prices for similar securities, or by utilizing calculations which incorporate observable inputs such as yield, maturity and credit quality. These instruments are classified as Level 2. Mutual funds, partnerships, and common and collective trusts are valued utilizing a Net Asset Value (NAV) concept or its equivalent. Mutual funds, which includes exchange traded funds (ETFs), are classified as Level 1 and valued using a NAV that is observable and based on the active market in which the fund trades. Common and collective trusts are maintained by banks or investment companies and hold certain investments in accordance with a stated set of objectives (such as tracking the performance of the S&P 500 Index). The trust’s shares are offered to a limited group of investors, and are not traded in an active market. Investments in common and collective trusts are valued using NAV as a practical expedient and, accordingly, are not classified in the fair value hierarchy. The NAV for trusts investing in exchange traded equities, and fixed income securities is derived from the market prices of the underlying securities held by the trusts. The NAV for trusts investing in real estate is derived from the appraised values of the trust’s underlying real estate assets. As of December 31, 2020, the plans were able to transact in the common and collective trusts at NAV. Investments in partnerships are also valued using the concept of NAV as a practical expedient and, accordingly, are not classified in the fair value hierarchy. The NAV for these investments is derived from the value of the partnerships’ underlying assets. The plan’s partnerships holdings relate to investments in high-yield fixed income instruments. Certain partnerships also include funding commitments that may require the plan to contribute up to $50 million to these partnerships; as of December 31, 2020, approximately $38 million of these commitments have been funded. The plans’ trustee provides valuation of our plan assets by using pricing services that utilize methodologies described to determine fair market value. We have internal control procedures to ensure this information is consistent with fair value accounting guidance. These procedures include assessing valuations using an independent pricing source, verifying that pricing can be supported by actual recent market transactions, assessing hierarchy classifications, comparing investment returns with benchmarks, and obtaining and reviewing independent audit reports on the trustee’s internal operating controls and valuation processes. The fair value of Pinnacle West’s pension plan and other postretirement benefit plan assets at December 31, 2020, by asset category, are as follows (dollars in thousands): Level 1 Level 2 Other (a) Total Pension Plan: Cash and cash equivalents $ 9,911 $ — $ — $ 9,911 Fixed income securities: Corporate — 1,684,782 — 1,684,782 U.S. Treasury 794,571 — — 794,571 Other (b) — 112,224 — 112,224 Common stock equities (c) 331,058 — — 331,058 Mutual funds (d) 262,765 — — 262,765 Common and collective trusts: Equities — — 407,522 407,522 Real estate — — 191,595 191,595 Partnerships — — 22,420 22,420 Short-term investments and other (e) — — 69,696 69,696 Total $ 1,398,305 $ 1,797,006 $ 691,233 $ 3,886,544 Other Benefits: Cash and cash equivalents $ 1,909 $ — $ — $ 1,909 Fixed income securities: Corporate — 221,488 — 221,488 U.S. Treasury 258,102 — — 258,102 Other (b) — 8,316 — 8,316 Common stock equities (c) 175,605 — — 175,605 Mutual funds (d) 34,310 — — 34,310 Common and collective trusts: Equities — — 94,674 94,674 Real estate — — 19,778 19,778 Short-term investments and other (e) 142,995 — 3,988 146,983 Total $ 612,921 $ 229,804 $ 118,440 $ 961,165 (a) These investments primarily represent assets valued using NAV as a practical expedient, and have not been classified in the fair value hierarchy. (b) This category consists primarily of debt securities issued by municipalities. (c) This category primarily consists of U.S. common stock equities. (d) These funds invest in international common stock equities. (e) This category includes plan receivables and payables. The fair value of Pinnacle West’s pension plan and other postretirement benefit plan assets at December 31, 2019, by asset category, are as follows (dollars in thousands): Level 1 Level 2 Other (a) Total Pension Plan: Cash and cash equivalents $ 9,370 $ — $ — $ 9,370 Fixed income securities: Corporate — 1,541,729 — 1,541,729 U.S. Treasury 406,112 — — 406,112 Other (b) — 92,240 — 92,240 Common stock equities (c) 250,829 — — 250,829 Mutual funds (d) 185,928 — — 185,928 Common and collective trusts: Equities — — 392,403 392,403 Real estate — — 171,645 171,645 Fixed Income — — 98,065 98,065 Partnerships — — 103,796 103,796 Short-term investments and other (e) — — 66,234 66,234 Total $ 852,239 $ 1,633,969 $ 832,143 $ 3,318,351 Other Benefits: Cash and cash equivalents $ 2,184 $ — $ — $ 2,184 Fixed income securities: Corporate — 202,640 — 202,640 U.S. Treasury 353,650 — — 353,650 Other (b) — 7,999 — 7,999 Common stock equities (c) 146,316 — — 146,316 Mutual funds (d) 14,351 — — 14,351 Common and collective trusts: Equities — — 83,648 83,648 Real estate — — 19,806 19,806 Short-term investments and other (e) 2,881 — 4,019 6,900 Total $ 519,382 $ 210,639 $ 107,473 $ 837,494 (a) These investments primarily represent assets valued using NAV as a practical expedient, and have not been classified in the fair value hierarchy. (b) This category consists primarily of debt securities issued by municipalities. (c) This category primarily consists of U.S. common stock equities. (d) These funds invest in U.S. and international common stock equities. (e) This category includes plan receivables and payables. Contributions Future year contribution amounts are dependent on plan asset performance and plan actuarial assumptions. We made contributions to our pension plan totaling $100 million in 2020, $150 million in 2019, and $50 million in 2018. The minimum required contributions for the pension plan are zero for the next three years. We expect to make voluntary contributions up to $100 million in 2021 and zero thereafter. With regard to contributions to our other postretirement benefit plan, we did not make a contribution in 2020 and 2019. We do not expect to make any contributions over the next three years to our other postretirement benefit plans. The Company was reimbursed $26 million in 2020, $30 million in 2019, and $72 million in 2018 for prior years retiree medical claims from the other postretirement benefit plan trust assets. Estimated Future Benefit Payments Benefit payments, which reflect estimated future employee service, for the next five years and the succeeding five years thereafter, are estimated to be as follows (dollars in thousands): Year Pension Plans Other Benefits Plans 2021 $ 210,119 $ 31,204 2022 209,593 31,731 2023 215,527 32,196 2024 220,241 31,914 2025 220,787 31,484 Years 2026-2030 1,116,848 153,536 Electric plant participants contribute to the above amounts in accordance with their respective participation agreements. Employee Savings Plan Benefits Pinnacle West sponsors a defined contribution savings plan for eligible employees of Pinnacle West and its subsidiaries. In 2020, costs related to APS’s employees represented 99% of the total cost of this plan. In a defined contribution savings plan, the benefits a participant receives result from regular contributions participants make to their own individual account, the Company’s matching contributions and earnings or losses on their investments. Under this plan, the Company matches a percentage of the participants’ contributions in cash which is then invested in the same investment mix as participants elect to invest their own future contributions. Pinnacle West recorded expenses for this plan of approximately $11 million for 2020, $11 million for 2019, and $11 million for 2018. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases We lease certain land, buildings, vehicles, equipment and other property through operating rental agreements with varying terms, provisions, and expiration dates. APS also has certain purchased power agreements that qualify as lease arrangements. Our leases have remaining terms that expire in 2021 through 2050. Substantially all of our leasing activities relate to APS. In 1986, APS entered into agreements with three separate lessor trust entities in order to sell and lease back interests in Palo Verde Unit 2 and related common facilities. These lessor trust entities have been deemed VIEs for which APS is the primary beneficiary. As the primary beneficiary, APS consolidated these lessor trust entities. The impacts of these sale leaseback transactions are excluded from our lease disclosures as lease accounting is eliminated upon consolidation. (See Note 18 for a discussion of VIEs.) On June 1, 2020 APS had two separate purchased power lease contracts that commenced. The lease terms end on September 30, 2025 and September 30, 2026, respectively. Both of these leases allow APS the right to the generation capacity from certain natural-gas fueled generators during the months of June through September over the contract term. APS does not operate or maintain these leased assets. APS controls the dispatch of the leased assets during the months of June through September and is required to pay a fixed monthly capacity payment during these periods of use. For these types of leased assets APS has elected to combine both the lease and non-lease payment components and accounts for the entire fixed payment as a lease obligation. These purchased power lease contracts are accounted for as operating leases. The contracts do not contain purchase options or term extension options. In addition to the fixed monthly capacity payment, APS must also pay variable charges based on the actual production volume of the asset. The variable consideration is not included in the measurement of our lease obligation. The following table provides information related to our lease costs (dollars in thousands): Year Ended Year Ended Purchased Power Lease Contracts Land, Property & Equipment Leases Total Purchased Power Lease Contracts Land, Property & Equipment Leases Total Operating lease cost $ 68,883 $ 18,493 $ 87,376 $ 42,190 $ 18,038 $ 60,228 Variable lease cost 121,359 972 122,331 113,233 782 114,015 Short-term lease cost — 3,804 3,804 — 4,385 4,385 Total lease cost $ 190,242 $ 23,269 $ 213,511 $ 155,423 $ 23,205 $ 178,628 Lease costs are primarily included as a component of operating expenses on our Consolidated Statements of Income. Lease costs relating to purchased power lease contracts are recorded in fuel and purchased power on the Consolidated Statements of Income, and are subject to recovery under the PSA or RES (see Note 4). The tables above reflect the lease cost amounts before the effect of regulatory deferral under the PSA and RES. Variable lease costs are recognized in the period the costs are incurred, and primarily relate to renewable purchased power lease contracts. Payments under most renewable purchased power lease contracts are dependent upon environmental factors, and due to the inherent uncertainty associated with the reliability of the fuel source, the payments are considered variable and are excluded from the measurement of lease liabilities and right-of-use lease assets. Certain of our lease agreements have lease terms with non-consecutive periods of use. For these agreements we recognize lease costs during the periods of use. Leases with initial terms of 12 months or less are considered short-term leases and are not recorded on the balance sheet. Lease expense recognized in the Consolidated Statements of Income was $18 million in 2018, this amount does not include purchased power lease contracts. Operating lease cost for purchased power lease contracts was $47 million in 2018. In addition, contingent rents for purchased power lease contracts was $109 million in 2018. These purchased power lease costs are recorded in fuel and purchased power on the Consolidated Statements of Income, and are subject to recovery under the PSA or RES (see Note 4). The following table provides information related to the maturity of our operating lease liabilities (dollars in thousands): December 31, 2020 Year Purchased Power Lease Contracts Land, Property & Equipment Leases Total 2021 $ 66,658 $ 14,455 $ 81,113 2022 68,325 10,849 79,174 2023 70,033 8,503 78,536 2024 71,784 6,104 77,888 2025 73,578 4,400 77,978 Thereafter 36,760 37,314 74,074 Total lease commitments 387,138 81,625 468,763 Less imputed interest 14,375 18,267 32,642 Total lease liabilities $ 372,763 $ 63,358 $ 436,121 We recognize lease assets and liabilities upon lease commencement. At December 31, 2020, we have certain purchased power lease contracts, that have been executed but have not yet commenced. In January 2021, we also executed additional purchased power lease contracts relating to energy storage. These arrangements have commencement dates beginning in May 2021 with terms ending through December 2042. We expect the total fixed consideration paid for these arrangements, which includes both lease and nonlease payments, will approximate $650 million over the term of the arrangements. The following tables provide other additional information related to operating lease liabilities (dollars in thousands): Year Ended Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities — operating cash flows: $ 75,097 $ 69,075 Right-of-use operating lease assets obtained in exchange for operating lease liabilities 441,653 11,262 December 31, 2020 December 31, 2019 Weighted average remaining lease term 6 years 13 years Weighted average discount rate (a) 1.69 % 3.71 % |
Jointly-Owned Facilities
Jointly-Owned Facilities | 12 Months Ended |
Dec. 31, 2020 | |
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | |
Jointly-Owned Facilities | Jointly-Owned Facilities APS shares ownership of some of its generating and transmission facilities with other companies. We are responsible for our share of operating costs which are included in the corresponding operating expenses on our Consolidated Statements of Income. We are also responsible for providing our own financing. Our share of operating expenses and utility plant costs related to these facilities is accounted for using proportional consolidation. The following table shows APS’s interests in those jointly-owned facilities recorded on the Consolidated Balance Sheets at December 31, 2020 (dollars in thousands): Percent Plant in Accumulated Construction Generating facilities: Palo Verde Units 1 and 3 29.1 % $ 1,911,339 $ 1,108,883 $ 26,623 Palo Verde Unit 2 (a) 16.8 % 649,035 379,305 7,268 Palo Verde Common 28.0 % (b) 774,054 320,107 41,607 Palo Verde Sale Leaseback (a) 351,050 253,014 — Four Corners Generating Station 63.0 % 1,621,418 581,436 35,028 Cholla common facilities (c) 50.5 % 193,807 109,447 1,206 Transmission facilities: ANPP 500kV System 33.5 % (b) 131,991 52,626 3,859 Navajo Southern System 26.0 % (b) 89,113 33,536 1,215 Palo Verde — Yuma 500kV System 25.3 % (b) 23,247 6,681 433 Four Corners Switchyards 61.8 % (b) 69,441 17,009 3,145 Phoenix — Mead System 17.1 % (b) 39,437 19,072 73 Palo Verde — Rudd 500kV System 50.0 % 93,123 28,206 1,921 Morgan — Pinnacle Peak System 64.6 % (b) 117,497 20,754 912 Round Valley System 50.0 % 531 174 13 Palo Verde — Morgan System 88.9 % (b) 257,220 20,943 530 Hassayampa — North Gila System 80.0 % 148,067 16,080 — Cholla 500kV Switchyard 85.7 % 7,896 1,850 940 Saguaro 500kV Switchyard 60.0 % 21,669 13,229 2 Kyrene — Knox System 50.0 % 578 323 — (a) See Note 18. (b) Weighted-average of interests. (c) PacifiCorp owns Cholla Unit 4 (see Note 4 for additional information) and APS operates the unit for PacifiCorp. The common facilities at Cholla are jointly-owned. Cholla Unit 4 was retired on December 24, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Palo Verde Generating Station Spent Nuclear Fuel and Waste Disposal On December 19, 2012, APS, acting on behalf of itself and the participant owners of Palo Verde, filed a second breach of contract lawsuit against the United States Department of Energy (“DOE”) in the United States Court of Federal Claims (“Court of Federal Claims”). The lawsuit sought to recover damages incurred due to DOE’s breach of the Contract for Disposal of Spent Nuclear Fuel and/or High Level Radioactive Waste (“Standard Contract”) for failing to accept Palo Verde’s spent nuclear fuel and high level waste from January 1, 2007 through June 30, 2011, as it was required to do pursuant to the terms of the Standard Contract and the Nuclear Waste Policy Act. On August 18, 2014, APS and DOE entered into a settlement agreement, stipulating to a dismissal of the lawsuit and payment by DOE to the Palo Verde owners for certain specified costs incurred by Palo Verde during the period January 1, 2007 through June 30, 2011. In addition, the settlement agreement, as amended, provides APS with a method for submitting claims and getting recovery for costs incurred through December 31, 2019. On September 1, 2020, APS and DOE entered into an addendum to the settlement agreement allowing for the recovery of costs incurred through December 31, 2022. APS has submitted six claims pursuant to the terms of the August 18, 2014 settlement agreement, for six separate time periods during July 1, 2011 through June 30, 2019. The DOE has approved and paid $99.7 million for these claims (APS’s share is $29.0 million). The amounts recovered were primarily recorded as adjustments to a regulatory liability and had no impact on reported net income. In accordance with the 2017 Rate Case Decision, this regulatory liability is being refunded to customers (see Note 4). On November 2, 2020, APS filed its seventh claim pursuant to the terms of the August 18, 2014 settlement agreement in the amount of $12.2 million (APS’s share is $3.6 million). Nuclear Insurance Public liability for incidents at nuclear power plants is governed by the Price-Anderson Nuclear Industries Indemnity Act (“Price-Anderson Act”), which limits the liability of nuclear reactor owners to the amount of insurance available from both commercial sources and an industry-wide retrospective payment plan. In accordance with the Price-Anderson Act, the Palo Verde participants are insured against public liability for a nuclear incident of up to approximately $13.8 billion per occurrence. Palo Verde maintains the maximum available nuclear liability insurance in the amount of $450 million, which is provided by American Nuclear Insurers (“ANI”). The remaining balance of approximately $13.3 billion of liability coverage is provided through a mandatory industry-wide retrospective premium program. If losses at any nuclear power plant covered by the program exceed the accumulated funds, APS could be responsible for retrospective premiums. The maximum retrospective premium per reactor under the program for each nuclear liability incident is approximately $137.6 million, subject to a maximum annual premium of approximately $20.5 million per incident. Based on APS’s ownership interest in the three Palo Verde units, APS’s maximum retrospective premium per incident for all three units is approximately $120.1 million, with a maximum annual retrospective premium of approximately $17.9 million. The Palo Verde participants maintain insurance for property damage to, and decontamination of, property at Palo Verde in the aggregate amount of $2.8 billion. APS has also secured accidental outage insurance for a sudden and unforeseen accidental outage of any of the three units. The property damage, decontamination, and accidental outage insurance are provided by Nuclear Electric Insurance Limited (“NEIL”). APS is subject to retrospective premium adjustments under all NEIL policies if NEIL’s losses in any policy year exceed accumulated funds. The maximum amount APS could incur under the current NEIL policies totals approximately $25.8 million for each retrospective premium assessment declared by NEIL’s Board of Directors due to losses. In addition, NEIL policies contain rating triggers that would result in APS providing approximately $75.1 million of collateral assurance within 20 business days of a rating downgrade to non-investment grade. The insurance coverage discussed in this and the previous paragraph is subject to certain policy conditions, sublimits and exclusions. Fuel and Purchased Power Commitments and Purchase Obligations APS is party to various fuel and purchased power contracts and purchase obligations with terms expiring between 2021 and 2043 that include required purchase provisions. APS estimates the contract requirements to be approximately $772 million in 2021; $671 million in 2022; $632 million in 2023; $592 million in 2024; $564 million in 2025; and $5.4 billion thereafter. However, these amounts may vary significantly pursuant to certain provisions in such contracts that permit us to decrease required purchases under certain circumstances. These amounts include estimated commitments relating to purchased power lease contracts (see Note 9). Of the various fuel and purchased power contracts mentioned above, some of those contracts for coal supply include take-or-pay provisions. The current coal contracts with take-or-pay provisions have terms expiring through 2031. The following table summarizes our estimated coal take-or-pay commitments (dollars in thousands): Years Ended December 31, 2021 2022 2023 2024 2025 Thereafter Coal take-or-pay commitments (a) $ 182,569 $ 183,604 $ 184,540 $ 186,804 $ 177,114 $ 1,024,854 (a) Total take-or-pay commitments are approximately $1.9 billion. The total net present value of these commitments is approximately $1.5 billion. APS may spend more to meet its actual fuel requirements than the minimum purchase obligations in our coal take-or-pay contracts. The following table summarizes actual amounts purchased under the coal contracts which include take-or-pay provisions for each of the last three years (dollars in thousands): Year Ended December 31, 2020 2019 2018 Total purchases $ 189,817 $ 204,888 $ 206,093 Renewable Energy Credits APS has entered into contracts to purchase renewable energy credits to comply with the RES. APS estimates the contract requirements to be approximately $35 million in 2021; $31 million in 2022; $30 million in 2023; $28 million in 2024; $25 million in 2025; and $105 million thereafter. These amounts do not include purchases of renewable energy credits that are bundled with energy. Coal Mine Reclamation Obligations APS must reimburse certain coal providers for amounts incurred for final and contemporaneous coal mine reclamation. We account for contemporaneous reclamation costs as part of the cost of the delivered coal. We utilize site-specific studies of costs expected to be incurred in the future to estimate our final reclamation obligation. These studies utilize various assumptions to estimate the future costs. Based on the most recent reclamation studies, APS recorded an obligation for the coal mine final reclamation of approximately $170 million at December 31, 2020 and $166 million at December 31, 2019. Under our current coal supply agreements, APS expects to make payments for the final mine reclamation as follows: $16 million in 2021; $17 million in 2022; $18 million in 2023; $19 million in 2024; $20 million in 2025; and $69 million thereafter. Any amendments to current coal supply agreements may change the timing of the contribution. Portions of these funds will be held in an escrow account and distributed to certain coal providers under the terms of the applicable coal supply agreements. Superfund-Related Matters The Comprehensive Environmental Response Compensation and Liability Act (“Superfund” or “CERCLA”) establishes liability for the cleanup of hazardous substances found contaminating the soil, water or air. Those who released, generated, transported to or disposed of hazardous substances at a contaminated site are among the parties who are potentially responsible (“PRPs”). PRPs may be strictly, and often are jointly and severally, liable for clean-up. On September 3, 2003, EPA advised APS that EPA considers APS to be a PRP in the Motorola 52 nd Street Superfund Site, Operable Unit 3 (“OU3”) in Phoenix, Arizona. APS has facilities that are within this Superfund site. APS and Pinnacle West have agreed with EPA to perform certain investigative activities of the APS facilities within OU3. In addition, on September 23, 2009, APS agreed with EPA and one other PRP to voluntarily assist with the funding and management of the site-wide groundwater remedial investigation and feasibility study (“RI/FS”). Based upon discussions between the OU3 working group parties and EPA, along with the results of recent technical analyses prepared by the OU3 working group to supplement the RI/FS for OU3, APS anticipates finalizing the RI/FS during the first or second quarter of 2021. We estimate that our costs related to this investigation and study will be approximately $3 million. We anticipate incurring additional expenditures in the future, but because the overall investigation is not complete and ultimate remediation requirements are not yet finalized, at the present time expenditures related to this matter cannot be reasonably estimated. On August 6, 2013, the Roosevelt Irrigation District (“RID”) filed a lawsuit in Arizona District Court against APS and 24 other defendants, alleging that RID’s groundwater wells were contaminated by the release of hazardous substances from facilities owned or operated by the defendants. The lawsuit also alleges that, under Superfund laws, the defendants are jointly and severally liable to RID. The allegations against APS arise out of APS’s current and former ownership of facilities in and around OU3. As part of a state governmental investigation into groundwater contamination in this area, on January 25, 2015, ADEQ sent a letter to APS seeking information concerning the degree to which, if any, APS’s current and former ownership of these facilities may have contributed to groundwater contamination in this area. APS responded to ADEQ on May 4, 2015. On December 16, 2016, two RID environmental and engineering contractors filed an ancillary lawsuit for recovery of costs against APS and the other defendants in the RID litigation. That same day, another RID service provider filed an additional ancillary CERCLA lawsuit against certain of the defendants in the main RID litigation, but excluded APS and certain other parties as named defendants. Because the ancillary lawsuits concern past costs allegedly incurred by these RID vendors, which were ruled unrecoverable directly by RID in November of 2016, the additional lawsuits do not increase APS’s exposure or risk related to these matters. On April 5, 2018, RID and the defendants in that particular litigation executed a settlement agreement, fully resolving RID’s CERCLA claims concerning both past and future cost recovery. APS’s share of this settlement was immaterial. In addition, the two environmental and engineering vendors voluntarily dismissed their lawsuit against APS and the other named defendants without prejudice. An order to this effect was entered on April 17, 2018. With this disposition of the case, the vendors may file their lawsuit again in the future. On August 16, 2019, Maricopa County, one of the three direct defendants in the service provider lawsuit, filed a third-party complaint seeking contribution for its liability, if any, from APS and 28 other third-party defendants. We are unable to predict the outcome of these matters; however, we do not expect the outcome to have a material impact on our financial position, results of operations or cash flows. Arizona Attorney General Matter APS received civil investigative demands from the Attorney General seeking information pertaining to the rate plan comparison tool offered to APS customers and other related issues including implementation of rates from the 2017 Settlement Agreement and its Customer Education and Outreach Plan associated with the 2017 Settlement Agreement. APS fully cooperated with the Attorney General’s Office in this matter. On February 22, 2021 APS entered into a consent agreement with the Attorney General as a way to settle the matter. The settlement results in APS paying $24.75 million, $24 million of which is being returned to customers as restitution. Environmental Matters APS is subject to numerous environmental laws and regulations affecting many aspects of its present and future operations, including air emissions of both conventional pollutants and greenhouse gases, water quality, wastewater discharges, solid waste, hazardous waste, and CCRs. These laws and regulations can change from time to time, imposing new obligations on APS resulting in increased capital, operating, and other costs. Associated capital expenditures or operating costs could be material. APS intends to seek recovery of any such environmental compliance costs through our rates, but cannot predict whether it will obtain such recovery. The following proposed and final rules involve material compliance costs to APS. Regional Haze Rules. APS has received the final rulemaking imposing pollution control requirements on Four Corners. EPA required the plant to install pollution control equipment that constitutes BART to lessen the impacts of emissions on visibility surrounding the plant. In addition, EPA issued a final rule for Regional Haze compliance at Cholla that does not involve the installation of new pollution controls and that will replace an earlier BART determination for this facility. See below for details of the Cholla BART approval. Four Corners. Based on EPA’s final standards, APS’s 63% share of the cost of required controls for Four Corners Units 4 and 5 was approximately $400 million, which has been incurred. In addition, APS and El Paso entered into an asset purchase agreement providing for the purchase by APS, or an affiliate of APS, of El Paso’s 7% interest in Four Corners Units 4 and 5. 4CA purchased the El Paso interest on July 6, 2016. NTEC purchased the interest from 4CA on July 3, 2018. See “Four Corners — 4CA Matter” below for a discussion of the NTEC purchase. The cost of the pollution controls related to the 7% interest is approximately $45 million, which was assumed by NTEC through its purchase of the 7% interest. Cholla . In early 2017, EPA approved a final rule containing a revision to Arizona’s State Implementation Plan (“SIP”) for Cholla that implemented BART requirements for this facility, which did not require the installation of any new pollution control capital improvements. In conjunction with the closure of Cholla Unit 2 in 2015, APS has committed to ceasing coal combustion within Units 1 and 3 by April 2025. PacifiCorp retired Cholla Unit 4 at the end of 2020. (See “Cholla” in Note 4 for information regarding future plans for Cholla and details related to the resulting regulatory asset). Coal Combustion Waste . On December 19, 2014, EPA issued its final regulations governing the handling and disposal of CCR, such as fly ash and bottom ash. The rule regulates CCR as a non-hazardous waste under Subtitle D of the Resource Conservation and Recovery Act (“RCRA”) and establishes national minimum criteria for existing and new CCR landfills and surface impoundments and all lateral expansions. These criteria include standards governing location restrictions, design and operating criteria, groundwater monitoring and corrective action, closure requirements and post closure care, and recordkeeping, notification, and internet posting requirements. The rule generally requires any existing unlined CCR surface impoundment to stop receiving CCR and either retrofit or close, and further requires the closure of any CCR landfill or surface impoundment that cannot meet the applicable performance criteria for location restrictions or structural integrity. Such closure requirements are deemed “forced closure” or “closure for cause” of unlined surface impoundments, and are the subject of recent regulatory and judicial activities described below. Since these regulations were finalized, EPA has taken steps to substantially modify the federal rules governing CCR disposal. While certain changes have been prompted by utility industry petitions, others have resulted from judicial review, court-approved settlements with environmental groups, and statutory changes to RCRA. The following lists the pending regulatory changes that, if finalized, could have a material impact as to how APS manages CCR at its coal-fired power plants: • Following the passage of the Water Infrastructure Improvements for the Nation Act in 2016, EPA possesses authority to, either, authorize states to develop their own permit programs for CCR management or issue federal permits governing CCR disposal both in states without their own permit programs and on tribal lands. Although ADEQ has taken steps to develop a CCR permitting program, it is not clear when that program will be put into effect. On December 19, 2019, EPA proposed its own set of regulations governing the issuance of CCR management permits. • On March 1, 2018, as a result of a settlement with certain environmental groups, EPA proposed adding boron to the list of constituents that trigger corrective action requirements to remediate groundwater impacted by CCR disposal activities. Apart from a subsequent proposal issued on August 14, 2019 to add a specific, health-based groundwater protection standard for boron, EPA has yet to take action on this proposal. • Based on an August 21, 2018 D.C. Circuit decision, which vacated and remanded those provisions of the EPA CCR regulations that allow for the operation of unlined CCR surface impoundments, EPA recently proposed corresponding changes to federal CCR regulations. On July 29, 2020, EPA took final action on new regulations establishing revised deadlines for initiating the closure of unlined CCR surface impoundments; such disposal units must close as soon as technically feasible, but no later than April 22, 2021. • On November 4, 2019, EPA also proposed to change the manner by which facilities that have committed to cease burning coal in the near-term may qualify for alternative closure. Such qualification would allow CCR disposal units at these plants to continue operating, even though they would otherwise be subject to forced closure under the federal CCR regulations. EPA’s July 29, 2020 final regulation adopted this proposal and now requires explicit EPA approval for facilities to utilize an alternative closure deadline. With respect to the Cholla facility, APS’s application for alternative closure (which would allow the continued disposal of CCR within the facility’s existing unlined CCR surface impoundments until the required date for ceasing coal-fired boiler operations in April 2025) was submitted to EPA on November 30, 2020 and is currently pending. This application will be subject to public comment and, potentially, judicial review. We cannot at this time predict the outcome of these regulatory proceedings or when the EPA will take final action on those matters that are still pending. Depending on the eventual outcome, the costs associated with APS’s management of CCR could materially increase, which could affect APS’s financial position, results of operations, or cash flows. APS currently disposes of CCR in ash ponds and dry storage areas at Cholla and Four Corners. APS estimates that its share of incremental costs to comply with the CCR rule for Four Corners is approximately $27 million and its share of incremental costs to comply with the CCR rule for Cholla is approximately $16 million. The Navajo Plant disposed of CCR only in a dry landfill storage area. To comply with the CCR rule for the Navajo Plant, APS’s share of incremental costs was approximately $1 million, which has been incurred. Additionally, the CCR rule requires ongoing, phased groundwater monitoring. As of October 2018, APS has completed the statistical analyses for its CCR disposal units that triggered assessment monitoring. APS determined that several of its CCR disposal units at Cholla and Four Corners will need to undergo corrective action. In addition, under the current regulations, all such disposal units must have ceased operating and initiated closure by October 31, 2020. APS initiated an assessment of corrective measures on January 14, 2019 and expects such assessment will continue through mid- to late-2021. As part of this assessment, APS continues to gather additional groundwater data and perform remedial evaluations as to the CCR disposal units at Cholla and Four Corners undergoing corrective action. In addition, APS will solicit input from the public, host public hearings, and select remedies as part of this process. Based on the work performed to date, APS currently estimates that its share of corrective action and monitoring costs at Four Corners will likely range from $10 million to $15 million, which would be incurred over 30 years. The analysis needed to perform a similar cost estimate for Cholla remains ongoing at this time. As APS continues to implement the CCR rule’s corrective action assessment process, the current cost estimates may change. Given uncertainties that may exist until we have fully completed the corrective action assessment process, we cannot predict any ultimate impacts to the Company; however, at this time we do not believe the cost estimates for Cholla and any potential change to the cost estimate for Four Corners would have a material impact on our financial position, results of operations or cash flows. Clean Power Plan/Affordable Clean Energy Regulations . On June 19, 2019, EPA took final action on its proposals to repeal EPA's 2015 Clean Power Plan (“CPP”) and replace those regulations with a new rule, the Affordable Clean Energy (“ACE”) regulations. EPA originally finalized the CPP on August 3, 2015, and such rules would have had far broader impact on the electric power sector than the ACE regulations. The ACE regulations had been stayed pending judicial review and on January 19, 2021, the U.S. Court of Appeals for the D.C. Circuit vacated the ACE regulations and remanded them back to EPA to develop new existing power plant carbon regulations consistent with the court’s ruling. That ruling endorsed an expansive view of the federal Clean Air Act consistent with EPA’s 2015 CPP. While the Biden administration has expressed an intent to regulate carbon emissions in this sector more aggressively under the Clean Air Act, we cannot at this time predict the outcome of pending EPA rulemaking proceedings in response to the court’s recent ACE decision. Other environmental rules that could involve material compliance costs include those related to effluent limitations, the ozone national ambient air quality standard and other rules or matters involving the Clean Air Act, Clean Water Act, Endangered Species Act, RCRA, Superfund, the Navajo Nation, and water supplies for our power plants. The financial impact of complying with current and future environmental rules could jeopardize the economic viability of our coal plants or the willingness or ability of power plant participants to fund any required equipment upgrades or continue their participation in these plants. The economics of continuing to own certain resources, particularly our coal plants, may deteriorate, warranting early retirement of those plants, which may result in asset impairments. APS would seek recovery in rates for the book value of any remaining investments in the plants as well as other costs related to early retirement, but cannot predict whether it would obtain such recovery. Four Corners National Pollutant Discharge Elimination System (“NPDES”) Permit On July 16, 2018, several environmental groups filed a petition for review before the EPA Environmental Appeals Board (“EAB”) concerning the NPDES wastewater discharge permit for Four Corners, which was reissued on June 12, 2018. The environmental groups allege that the permit was reissued in contravention of several requirements under the Clean Water Act and did not contain required provisions concerning EPA’s 2015 revised effluent limitation guidelines for steam-electric EGUs, 2014 existing-source regulations governing cooling-water intake structures, and effluent limits for surface seepage and subsurface discharges from coal-ash disposal facilities. To address certain of these issues through a reconsidered permit, EPA took action on December 19, 2018 to withdraw the NPDES permit reissued in June 2018. Withdrawal of the permit moots the EAB appeal, and EPA filed a motion to dismiss on that basis. The EAB thereafter dismissed the environmental group appeal on February 12, 2019. EPA then issued a revised final NPDES permit for Four Corners on September 30, 2019. Based upon a November 1, 2019 filing by several environmental groups, the EAB again took up review of the Four Corners NPDES Permit. Oral argument on this appeal was held on September 3, 2020 and the EAB denied the environmental group petition on September 30, 2020. On January 22, 2021, the environmental groups filed a petition for review of the EAB’s decision with the U.S. Court of Appeals for the Ninth Circuit. We cannot predict the outcome of these appeal proceedings and, if such appeal is successful, whether that outcome will have a material impact on our financial position, results of operations, or cash flows. Four Corners 4CA Matter On July 6, 2016, 4CA purchased El Paso’s 7% interest in Four Corners. NTEC purchased this 7% interest o n July 3, 2018 from 4CA . NTEC purchased the 7% interest at 4CA’s book value, approximately $70 million, and is paying 4CA the purchase price over a period of four years pursuant to a secured interest-bearing promissory note. The note is secured by a portion of APS’s payments to be owed to NTEC under the 2016 Coal Supply Agreement. As of December 31, 2020, the note has a remaining balance of $27 million. NTEC continues to make payments in accordance with the terms of the note. Due to its short-remaining term, among other factors, there are no expected credit losses associated with the note. In connection with the sale, Pinnacle West guaranteed certain obligations that NTEC will have to the other owners of Four Corners, such as NTEC’s 7% share of capital expenditures and operating and maintenance expenses. Pinnacle West’s guarantee is secured by a portion of APS’s payments to be owed to NTEC under the 2016 Coal Supply Agreement. The 2016 Coal Supply Agreement contained alternate pricing terms for the 7% interest in the event NTEC did not purchase the interest. Until the time that NTEC purchased the 7% interest, the alternate pricing provisions were applicable to 4CA as the holder of the 7% interest. These terms included a formula under which NTEC must make certain payments to 4CA for reimbursement of operations and maintenance costs and a specified rate of return, offset by revenue generated by 4CA’s power sales. The amount under this formula for calendar year 2018 (up to the date that NTEC purchased the 7% interest) was approximately $10 million, which was due to 4CA on December 31, 2019. Such payment was satisfied in January 2020 by NTEC directing to 4CA a prepayment from APS of future coal payment obligations of which the prepayment has been fully utilized as of June 2020. Financial Assurances In the normal course of business, we obtain standby letters of credit and surety bonds from financial institutions and other third parties. These instruments guarantee our own future performance and provide third parties with financial and performance assurance in the event we do not perform. These instruments support commodity contract collateral obligations and other transactions. As of December 31, 2020, standby letters of credit totaled $5.2 million and will expire in 2021. As of December 31, 2020, surety bonds expiring through 2022 totaled $16 million. The underlying liabilities insured by these instruments are reflected on our balance sheets, where applicable. Therefore, no additional liability is reflected for the letters of credit and surety bonds themselves. We enter into agreements that include indemnification provisions relating to liabilities arising from or related to certain of our agreements. Most significantly, APS has agreed to indemnify the equity participants and other parties in the Palo Verde sale leaseback transactions with respect to certain tax matters. Generally, a maximum obligation is not explicitly stated in the indemnification provisions and, therefore, the overall maximum amount of the obligation under such indemnification provisions cannot be reasonably estimated. Based on historical experience and evaluation of the specific indemnities, we do not believe that any material loss related to such indemnification provisions is likely. |
Asset Retirement Obligations
Asset Retirement Obligations | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations 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. In 2019, APS received updated decommissioning estimates for the Navajo Plant closure in December 2019, which resulted in a decrease to the ARO in the amount of $8 million (see Note 4 for additional information). In addition, APS received a new decommissioning study for Palo Verde. This resulted in a decrease to the ARO in the amount of $89 million, a decrease in plant in service of $80 million and a reduction in the regulatory liability of $9 million. The following table shows the change in our asset retirement obligations for 2020 and 2019 (dollars in thousands): 2020 2019 Asset retirement obligations at the beginning of year $ 657,218 $ 726,545 Changes attributable to: Accretion expense 38,652 39,726 Settlements (9,710) (12,591) Estimated cash flow revisions 18,923 (96,462) Asset retirement obligations at the end of year $ 705,083 $ 657,218 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. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We classify our assets and liabilities that are carried at fair value within the fair value hierarchy. This hierarchy ranks the quality and reliability of the inputs used to determine fair values, which are then classified and disclosed in one of three categories. The three levels of the fair value hierarchy are: Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 — Other significant observable inputs, including quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active, and model-derived valuations whose inputs are observable (such as yield curves). Level 3 — Valuation models with significant unobservable inputs that are supported by little or no market activity. Instruments in this category may include long-dated derivative transactions where valuations are unobservable due to the length of the transaction, options, and transactions in locations where observable market data does not exist. The valuation models we employ utilize spot prices, forward prices, historical market data and other factors to forecast future prices. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Thus, a valuation may be classified in Level 3 even though the valuation may include significant inputs that are readily observable. We maximize the use of observable inputs and minimize the use of unobservable inputs. We rely primarily on the market approach of using prices and other market information for identical and/or comparable assets and liabilities. If market data is not readily available, inputs may reflect our own assumptions about the inputs market participants would use. Our assessment of the inputs and the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities as well as their placement within the fair value hierarchy levels. We assess whether a market is active by obtaining observable broker quotes, reviewing actual market activity, and assessing the volume of transactions. We consider broker quotes observable inputs when the quote is binding on the broker, we can validate the quote with market activity, or we can determine that the inputs the broker used to arrive at the quoted price are observable. Certain instruments have been valued using the concept of NAV, as a practical expedient. These instruments are typically structured as investment companies offering shares or units to multiple investors for the purpose of providing a return. These instruments are similar to mutual funds; however, their NAV is generally not published and publicly available, nor are these instruments traded on an exchange. Instruments valued using NAV, as a practical expedient are included in our fair value disclosures however, in accordance with GAAP are not classified within the fair value hierarchy levels. Recurring Fair Value Measurements We apply recurring fair value measurements to cash equivalents, derivative instruments, and investments held in the nuclear decommissioning trusts and other special use funds. On an annual basis we apply fair value measurements to plan assets held in our retirement and other benefit plans. (See Note 8 for fair value discussion of plan assets held in our retirement and other benefit plans.) Cash Equivalents Cash equivalents represent certain investments in money market funds that are valued using quoted prices in active markets. Risk Management Activities — Derivative Instruments Exchange traded commodity contracts are valued using unadjusted quoted prices. For non-exchange traded commodity contracts, we calculate fair value based on the average of the bid and offer price, discounted to reflect net present value. We maintain certain valuation adjustments for a number of risks associated with the valuation of future commitments. These include valuation adjustments for liquidity and credit risks. The liquidity valuation adjustment represents the cost that would be incurred if all unmatched positions were closed out or hedged. The credit valuation adjustment represents estimated credit losses on our net exposure to counterparties, taking into account netting agreements, expected default experience for the credit rating of the counterparties and the overall diversification of the portfolio. We maintain credit policies that management believes minimize overall credit risk. Certain non-exchange traded commodity contracts are valued based on unobservable inputs due to the long-term nature of contracts, characteristics of the product, or the unique location of the transactions. Our long-dated energy transactions consist of observable valuations for the near-term portion and unobservable valuations for the long-term portions of the transaction. We rely primarily on broker quotes to value these instruments. When our valuations utilize broker quotes, we perform various control procedures to ensure the quote has been developed consistent with fair value accounting guidance. These controls include assessing the quote for reasonableness by comparison against other broker quotes, reviewing historical price relationships, and assessing market activity. When broker quotes are not available, the primary valuation technique used to calculate the fair value is the extrapolation of forward pricing curves using observable market data for more liquid delivery points in the same region and actual transactions at more illiquid delivery points. When the unobservable portion is significant to the overall valuation of the transaction, the entire transaction is classified as Level 3. Investments Held in Nuclear Decommissioning Trusts and Other Special Use Funds The nuclear decommissioning trusts and other special use funds invest in fixed income and equity securities. Other special use funds include the coal reclamation escrow account and the active union employee medical account. (See Note 19 for additional discussion about our investment accounts.) We value investments in fixed income and equity securities using information provided by our trustees and escrow agent. Our trustees and escrow agent use pricing services that utilize the valuation methodologies described below to determine fair market value. We have internal control procedures designed to ensure this information is consistent with fair value accounting guidance. These procedures include assessing valuations using an independent pricing source, verifying that pricing can be supported by actual recent market transactions, assessing hierarchy classifications, comparing investment returns with benchmarks, and obtaining and reviewing independent audit reports on the trustees’ and escrow agent’s internal operating controls and valuation processes. Fixed Income Securities Fixed income securities issued by the U.S. Treasury are valued using quoted active market prices and are typically classified as Level 1. Fixed income securities issued by corporations, municipalities, and other agencies, including mortgage-backed instruments, are valued using quoted inactive market prices, quoted active market prices for similar securities, or by utilizing calculations which incorporate observable inputs such as yield curves and spreads relative to such yield curves. These fixed income instruments are classified as Level 2. Whenever possible, multiple market quotes are obtained which enables a cross-check validation. A primary price source is identified based on asset type, class, or issue of securities. Fixed income securities may also include short-term investments in certificates of deposit, variable rate notes, time deposit accounts, U.S. Treasury and Agency obligations, U.S. Treasury repurchase agreements, commercial paper, and other short term instruments. These instruments are valued using active market prices or utilizing observable inputs described above. Equity Securities The Nuclear Decommissioning Trust’s equity security investments are held indirectly through commingled funds. The commingled funds are valued using the funds’ NAV as a practical expedient. The funds’ NAV is primarily derived from the quoted active market prices of the underlying equity securities held by the funds. We may transact in these commingled funds on a semi-monthly basis at the NAV. The commingled funds are maintained by a bank and hold investments in accordance with the stated objective of tracking the performance of the S&P 500 Index. Because the commingled funds’ shares are offered to a limited group of investors, they are not considered to be traded in an active market. As these instruments are valued using NAV, as a practical expedient, they have not been classified within the fair value hierarchy. The Nuclear Decommissioning Trusts and other special use funds may also hold equity securities that include exchange traded mutual funds and money market accounts for short-term liquidity purposes. These short-term, highly-liquid, investments are valued using active market prices. Fair Value Tables The following table presents the fair value at December 31, 2020 of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands): Level 1 Level 2 Level 3 Other Total Assets Risk management activities — derivative instruments: Commodity contracts $ — $ 9,016 $ 4 $ (4,271) (a) $ 4,749 Nuclear decommissioning trust: Equity securities 29,796 — — (17,828) (b) 11,968 U.S. commingled equity funds — — — 610,055 (c) 610,055 U.S. Treasury debt 164,514 — — — 164,514 Corporate debt — 149,509 — — 149,509 Mortgage-backed securities — 99,623 — — 99,623 Municipal bonds — 89,705 — — 89,705 Other fixed income — 13,061 — — 13,061 Subtotal nuclear decommissioning trust 194,310 351,898 — 592,227 1,138,435 Other special use funds: Equity securities 37,337 — — 504 (b) 37,841 U.S. Treasury debt 203,220 — — — 203,220 Municipal bonds — 13,448 — — 13,448 Subtotal other special use funds 240,557 13,448 — 504 254,509 Total assets $ 434,867 $ 374,362 $ 4 $ 588,460 $ 1,397,693 Liabilities Risk management activities — derivative instruments: Commodity contracts $ — $ (20,498) $ (1,107) $ 2,986 (a) $ (18,619) (a) Represents counterparty netting, margin, and collateral (see Note 16). (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. The following table presents the fair value at December 31, 2019 of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands): Level 1 Level 2 Level 3 Other Total Assets Risk management activities — derivative instruments: Commodity contracts $ — $ 551 $ 33 $ (69) (a) $ 515 Nuclear decommissioning trust: Equity securities 10,872 — — 2,401 (b) 13,273 U.S. commingled equity funds — — — 518,844 (c) 518,844 U.S. Treasury debt 160,607 — — — 160,607 Corporate debt — 115,869 — — 115,869 Mortgage-backed securities — 118,795 — — 118,795 Municipal bonds — 73,040 — — 73,040 Other fixed income — 10,347 — — 10,347 Subtotal nuclear decommissioning trust 171,479 318,051 — 521,245 1,010,775 Other special use funds: Equity securities 7,142 — — 474 (b) 7,616 U.S. Treasury debt 232,848 — — — 232,848 Municipal bonds — 4,631 — — 4,631 Subtotal other special use funds 239,990 4,631 — 474 245,095 Total assets $ 411,469 $ 323,233 $ 33 $ 521,650 $ 1,256,385 Liabilities Risk management activities — derivative instruments: Commodity contracts $ — $ (67,992) $ (3,429) $ (711) (a) $ (72,132) (a) Represents counterparty netting, margin, and collateral (see Note 16). (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. Fair Value Measurements Classified as Level 3 The significant unobservable inputs used in the fair value measurement of our energy derivative contracts include broker quotes that cannot be validated as an observable input primarily due to the long-term nature of the quote, or other characteristics of the product. Significant changes in these inputs in isolation would result in significantly higher or lower fair value measurements. Changes in our derivative contract fair values, including changes relating to unobservable inputs, typically will not impact net income due to regulatory accounting treatment (see Note 4). Because our forward commodity contracts classified as Level 3 are currently in a net purchase position, we would expect price increases of the underlying commodity to result in increases in the net fair value of the related contracts. Conversely, if the price of the underlying commodity decreases, the net fair value of the related contracts would likely decrease. Other unobservable valuation inputs include credit and liquidity reserves which do not have a material impact on our valuations; however, significant changes in these inputs could also result in higher or lower fair value measurements. Financial Instruments Not Carried at Fair Value |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following table presents the calculation of Pinnacle West’s basic and diluted earnings per share (in thousands, except per share amounts): 2020 2019 2018 Net income attributable to common shareholders $ 550,559 $ 538,320 $ 511,047 Weighted average common shares outstanding — basic 112,666 112,443 112,129 Net effect of dilutive securities: Contingently issuable performance shares and restricted stock units 276 315 421 Weighted average common shares outstanding — diluted 112,942 112,758 112,550 Earnings per weighted-average common share outstanding Net income attributable to common shareholders — basic $ 4.89 $ 4.79 $ 4.56 Net income attributable to common shareholders — diluted $ 4.87 $ 4.77 $ 4.54 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Pinnacle West has incentive compensation plans under which stock-based compensation is granted to officers, key-employees, and non-officer members of the Board of Directors. Awards granted under the 2012 Long-Term Incentive Plan (“2012 Plan”) may be in the form of stock grants, restricted stock units, stock units, performance shares, restricted stock, dividend equivalents, performance share units, performance cash, incentive and non-qualified stock options, and stock appreciation rights. The 2012 Plan authorizes up to 4.6 million common shares to be available for grant. As of December 31, 2020, 1.5 million common shares were available for issuance under the 2012 Plan. During 2020, 2019, and 2018, the Company granted awards in the form of restricted stock units, stock units, stock grants, and performance shares. Awards granted from 2007 to 2011 were issued under the 2007 Long-Term Incentive Plan (“2007 Plan”), and no new awards may be granted under the 2007 Plan. Stock-Based Compensation Expense and Activity Compensation cost included in net income for stock-based compensation plans was $18 million in 2020, $18 million in 2019, and $20 million in 2018. The compensation cost capitalized is immaterial for all years. Income tax benefits related to stock-based compensation arrangements were $4 million in 2020, $7 million in 2019, and $7 million in 2018. As of December 31, 2020, there were approximately $9 million of unrecognized compensation costs related to nonvested stock-based compensation arrangements. We expect to recognize these costs over a weighted-average period of 2 years. The total fair value of shares vested was $22 million in 2020, $21 million in 2019 and $24 million in 2018. The following table is a summary of awards granted and the weighted-average grant date fair value for the three years ended 2020, 2019 and 2018: Restricted Stock Units, Stock Grants, and Stock Units (a) Performance Shares (b) 2020 2019 2018 2020 2019 2018 Units granted 118,403 109,106 132,997 122,830 142,874 171,708 Weighted-average grant date fair value $ 71.70 $ 89.15 $ 77.51 $ 104.74 $ 92.16 $ 76.56 (a) Units granted includes awards that will be cash settled of 45,646 in 2020, 48,972 in 2019, and 66,252 in 2018. (b) Reflects the target payout level. The following table is a summary of the status of non-vested awards as of December 31, 2020 and changes during the year: Restricted Stock Units, Stock Grants, and Stock Units Performance Shares Shares Weighted-Average Shares (b) Weighted-Average Nonvested at January 1, 2020 242,612 $ 81.38 306,970 $ 83.65 Granted 118,403 71.70 122,830 104.74 Vested (136,893) 73.80 (161,906) 76.53 Forfeited (c) (3,565) 82.61 (7,890) 85.06 Nonvested at December 31, 2020 220,557 (a) 77.93 260,004 98.28 Vested Awards Outstanding at December 31, 2020 82,921 161,906 (a) Includes 126,996 of awards that will be cash settled. (b) The nonvested performance shares are reflected at target payout level. (c) We account for forfeitures as they occur. Share-based liabilities paid relating to restricted stock units were $6 million, $5 million and $4 million in 2020, 2019 and 2018, respectively. This includes cash used to settle restricted stock units of $4 million, $5 million and $5 million in 2020, 2019 and 2018, respectively. Restricted stock units that are cash settled are classified as liability awards. All performance shares are classified as equity awards. Restricted Stock Units, Stock Grants, and Stock Units Restricted stock units are granted to officers and key employees. Restricted stock units typically vest and settle in equal annual installments over a 4-year period after the grant date. Vesting is typically dependent upon continuous service during the vesting period; however, awards granted to retirement-eligible employees will vest upon the employee’s retirement. Awardees elect to receive payment in either 100% stock, 100% cash, or 50% in cash and 50% in stock. Restricted stock unit awards typically include a dividend equivalent feature. This feature allows each award to accrue dividend rights equal to the dividends they would have received had they directly owned the stock. Interest on dividend rights compounds quarterly. If the award is forfeited the employee is not entitled to the dividends on those shares. Compensation cost for restricted stock unit awards is based on the fair value of the award, with the fair value being the market price of our stock on the measurement date. Restricted stock unit awards that will be settled in cash are accounted for as liability awards, with compensation cost initially calculated on the date of grant using the Company’s closing stock price, and remeasured at each balance sheet date. Restricted stock unit awards that will be settled in shares are accounted for as equity awards, with compensation cost calculated using the Company’s closing stock price on the date of grant. Compensation cost is recognized over the requisite service period based on the fair value of the award. Stock grants are issued to non-officer members of the Board of Directors. They may elect to receive the stock grant, or to defer receipt until a later date and receive stock units in lieu of the stock grant. The members of the Board of Directors who elect to defer may elect to receive payment in either 100% stock, 100% cash, or 50% in cash and 50% in stock. Each stock unit is convertible to one share of stock. The stock units accrue dividend rights, equal to the amount of dividends the Directors would have received had they directly owned stock equal to the number of vested restricted stock units or stock units from the date of grant to the date of payment, plus interest compounded quarterly. The dividends and interest are paid, based on the Director’s election, in either stock, cash, or 50% in cash and 50% in stock. Performance Share Awards Performance share awards are granted to officers and key employees. The awards contain two separate performance criteria that affect the number of shares that may be received if after the end of a 3-year performance period the performance criteria are met. For the first criteria, the number of shares that will vest is based on non-financial performance metrics (i.e., the metric component). The other criteria is based upon Pinnacle West’s total shareholder return (“TSR”) in relation to the TSR of other companies in a specified utility index (i.e., the TSR component). The exact number of shares issued will vary from 0% to 200% of the target award. Shares received include dividend rights paid in stock equal to the amount of dividends that recipients would have received had they directly owned stock, equal to the number of vested performance shares from the date of grant to the date of payment plus interest compounded quarterly. If the award is forfeited or if the performance criteria are not achieved, the employee is not entitled to the dividends on those shares. |
Derivative Accounting
Derivative Accounting | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Accounting | Derivative Accounting Derivative financial instruments are used to manage exposure to commodity price and transportation costs of electricity, natural gas, coal, emissions allowances and interest rates. Risks associated with market volatility are managed by utilizing various physical and financial derivative instruments, including futures, forwards, options and swaps. As part of our overall risk management program, we may use derivative instruments to hedge purchases and sales of electricity and natural gas. Derivative instruments that meet certain hedge accounting criteria may be designated as cash flow hedges and are used to limit our exposure to cash flow variability on forecasted transactions. The changes in market value of such instruments have a high correlation to price changes in the hedged transactions. Derivative instruments are also entered into for economic hedging purposes. While economic hedges may mitigate exposure to fluctuations in commodity prices, these instruments have not been designated as accounting hedges. Contracts that have the same terms (quantities, delivery points and delivery periods) and for which power does not flow are netted, which reduces both revenues and fuel and purchased power costs in our Consolidated Statements of Income, but does not impact our financial condition, net income or cash flows. Our derivative instruments, excluding those qualifying for a scope exception, are recorded on the balance sheet as an asset or liability and are measured at fair value. (See Note 13 for a discussion of fair value measurements.) Derivative instruments may qualify for the normal purchases and normal sales scope exception if they require physical delivery and the quantities represent those transacted in the normal course of business. Derivative instruments qualifying for the normal purchases and sales scope exception are accounted for under the accrual method of accounting and excluded from our derivative instrument discussion and disclosures below. For its regulated operations, APS defers for future rate treatment 100% of the unrealized gains and losses on derivatives pursuant to the PSA mechanism that would otherwise be recognized in income. Realized gains and losses on derivatives are deferred in accordance with the PSA to the extent the amounts are above or below the Base Fuel Rate (see Note 4). Gains and losses from derivatives in the following tables represent the amounts reflected in income before the effect of PSA deferrals. The following table shows the outstanding gross notional volume of derivatives, which represent both purchases and sales (does not reflect net position): Quantity Commodity Unit of Measure December 31, 2020 December 31, 2019 Power GWh 368 193 Gas Billion cubic feet 205 257 Gains and Losses from Derivative Instruments The following table provides information about APS’s gains and losses from derivative instruments in designated cash flow accounting hedging relationships (dollars in thousands): Financial Statement Year Ended Commodity Contracts Location 2020 2019 2018 Loss Reclassified from Accumulated OCI into Income (Effective Portion Realized) (a) Fuel and purchased power (b) (763) (1,512) (2,000) (a) During the years ended December 31, 2020, 2019, and 2018, we had no gains or losses reclassified from accumulated OCI to earnings related to discontinued cash flow hedges. (b) Amounts are before the effect of PSA deferrals. During the next twelve months, we estimate that no amounts will be reclassified from accumulated OCI into income. For APS, the delivery period for all derivative instruments in designated cash flow accounting hedging relationships have lapsed. The following table provides information about gains and losses from derivative instruments not designated as accounting hedging instruments (dollars in thousands): Financial Statement Year Ended Commodity Contracts Location 2020 2019 2018 Net Loss Recognized in Income Operating revenues $ — $ — $ (2,557) Net Loss Recognized in Income Fuel and purchased power (a) (3,178) (84,953) (12,951) Total $ (3,178) $ (84,953) $ (15,508) (a) Amounts are before the effect of PSA deferrals. Derivative Instruments in the Consolidated Balance Sheets Our derivative transactions are typically executed under standardized or customized agreements, which include collateral requirements and, in the event of a default, would allow for the netting of positive and negative exposures associated with a single counterparty. Agreements that allow for the offsetting of positive and negative exposures associated with a single counterparty are considered master netting arrangements. Transactions with counterparties that have master netting arrangements are offset and reported net on the Consolidated Balance Sheets. Transactions that do not allow for offsetting of positive and negative positions are reported gross on the Consolidated Balance Sheets. We do not offset a counterparty’s current derivative contracts with the counterparty’s non-current derivative contracts, although our master netting arrangements would allow current and non-current positions to be offset in the event of a default. These types of transactions may include non-derivative instruments, derivatives qualifying for scope exceptions, trade receivables and trade payables arising from settled positions, and other forms of non-cash collateral (such as letters of credit). These types of transactions are excluded from the offsetting tables presented below. The following tables provide information about the fair value of our risk management activities reported on a gross basis and the impacts of offsetting. These amounts relate to commodity contracts and are located in the assets and liabilities from risk management activities lines of our Consolidated Balance Sheets. As of December 31, 2020: Gross Amounts Net Other Amount Current assets $ 5,870 $ (2,939) $ 2,931 $ — $ 2,931 Investments and other assets 3,150 (1,332) 1,818 — 1,818 Total assets 9,020 (4,271) 4,749 — 4,749 Current liabilities (9,211) 2,939 (6,272) (1,285) (7,557) Deferred credits and other (12,394) 1,332 (11,062) — (11,062) Total liabilities (21,605) 4,271 (17,334) (1,285) (18,619) Total $ (12,585) $ — $ (12,585) $ (1,285) $ (13,870) (a) All of our gross recognized derivative instruments were subject to master netting arrangements. (b) No cash collateral has been provided to counterparties, or received from counterparties, that is subject to offsetting. (c) Represents cash collateral that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $1,285. As of December 31, 2019: Gross Recognized Derivatives (a) Amounts Net Recognized Derivatives Other (c) Amount Reported on Balance Sheet Current assets $ 584 $ (474) $ 110 $ 405 $ 515 Current liabilities (38,235) 474 (37,761) (1,185) (38,946) Deferred credits and other (33,186) — (33,186) — (33,186) Total liabilities (71,421) 474 (70,947) (1,185) (72,132) Total $ (70,837) $ — $ (70,837) $ (780) $ (71,617) (a) All of our gross recognized derivative instruments were subject to master netting arrangements. (b) No cash collateral has been provided to counterparties, or received from counterparties, that is subject to offsetting. (c) Represents cash collateral and cash margin that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral and margin posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $1,185 and cash margin provided to counterparties of $405. Credit Risk and Credit Related Contingent Features We are exposed to losses in the event of nonperformance or nonpayment by counterparties and have risk management contracts with many counterparties. As of December 31, 2020, we have four counterparties for which our exposure represents approximately 62% of Pinnacle West’s $5 million of risk management assets. This exposure relates to master agreements with counterparties and all four are rated as investment grade. Our risk management process assesses and monitors the financial exposure of all counterparties. Despite the fact that the great majority of our trading counterparties' debt is rated as investment grade by the credit rating agencies, there is still a possibility that one or more of these counterparties could default, resulting in a material impact on consolidated earnings for a given period. Counterparties in the portfolio consist principally of financial institutions, major energy companies, municipalities and local distribution companies. We maintain credit policies that we believe minimize overall credit risk to within acceptable limits. Determination of the credit quality of our counterparties is based upon a number of factors, including credit ratings and our evaluation of their financial condition. To manage credit risk, we employ collateral requirements and standardized agreements that allow for the netting of positive and negative exposures associated with a single counterparty. Valuation adjustments are established representing our estimated credit losses on our overall exposure to counterparties. Certain of our derivative instrument contracts contain credit-risk-related contingent features including, among other things, investment grade credit rating provisions, credit-related cross-default provisions, and adequate assurance provisions. Adequate assurance provisions allow a counterparty with reasonable grounds for uncertainty to demand additional collateral based on subjective events and/or conditions. For those derivative instruments in a net liability position, with investment grade credit contingencies, the counterparties could demand additional collateral if our debt credit rating were to fall below investment grade (below BBB- for Standard & Poor’s or Fitch or Baa3 for Moody’s). The following table provides information about our derivative instruments that have credit-risk-related contingent features (dollars in thousands): December 31, 2020 Aggregate fair value of derivative instruments in a net liability position $ 21,605 Cash collateral posted — Additional cash collateral in the event credit-risk related contingent features were fully triggered (a) 19,510 (a) This amount is after counterparty netting and includes those contracts which qualify for scope exceptions, which are excluded from the derivative details above. We also have energy related non-derivative instrument contracts with investment grade credit-related contingent features, which could also require us to post additional collateral of approximately $90 million if our debt credit ratings were to fall below investment grade. |
Other Income and Other Expense
Other Income and Other Expense | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Income and Other Expense | Other Income and Other Expense The following table provides detail of Pinnacle West’s Consolidated other income and other expense for 2020, 2019 and 2018 (dollars in thousands): 2020 2019 2018 Other income: Interest income $ 12,210 $ 10,377 $ 8,647 Investment gains (losses) — net 2,358 — — Debt return on Four Corners SCR deferral (Note 4) 26,121 19,541 16,153 Debt return on Ocotillo modernization project (Note 4) 15,865 20,282 — Miscellaneous 149 63 96 Total other income $ 56,703 $ 50,263 $ 24,896 Other expense: Non-operating costs $ (12,400) $ (10,663) $ (10,076) Investment gains (losses) — net — (1,835) (417) Miscellaneous (45,376) (a) (5,382) (7,473) Total other expense $ (57,776) $ (17,880) $ (17,966) (a) Miscellaneous includes donation of approximately $10 million to the APS Foundation and approximately $25.2 million related to the CCT plan (see Note 4). Other Income and Other Expense - APS The following table provides detail of APS’s other income and other expense for 2020, 2019 and 2018 (dollars in thousands): 2020 2019 2018 Other income: Interest income $ 9,621 $ 6,998 $ 6,496 Debt return on Four Corners SCR deferral (Note 4) 26,121 19,541 16,153 Debt return on Ocotillo modernization project (Note 4) 15,865 20,282 — Miscellaneous 148 63 97 Total other income $ 51,755 $ 46,884 $ 22,746 Other expense: Non-operating costs $ (10,659) $ (9,612) $ (9,462) Miscellaneous (43,035) (a) (3,378) (5,830) Total other expense $ (53,694) $ (12,990) $ (15,292) |
Palo Verde Sale Leaseback Varia
Palo Verde Sale Leaseback Variable Interest Entities | 12 Months Ended |
Dec. 31, 2020 | |
Variable Interest Entities [Abstract] | |
Palo Verde Sale Leaseback Variable Interest Entities | Palo Verde Sale Leaseback Variable Interest Entities In 1986, APS entered into agreements with three separate VIE lessor trust entities in order to sell and lease back interests in Palo Verde Unit 2 and related common facilities. APS will retain the assets through 2023 under one lease and 2033 under the other two leases. APS will be required to make payments relating to these leases of approximately $23 million annually for the period 2021 through 2023, and about $16 million annually for the period 2024 through 2033. At the end of the lease period, APS will have the option to purchase the leased assets at their fair market value, extend the leases for up to two years, or return the assets to the lessors. The leases’ terms give APS the ability to utilize the assets for a significant portion of the assets’ economic life, and therefore provide APS with the power to direct activities of the VIEs that most significantly impact the VIEs’ economic performance. Predominantly due to the lease terms, APS has been deemed the primary beneficiary of these VIEs and therefore consolidates the VIEs. As a result of consolidation, we eliminate lease accounting and instead recognize depreciation expense, resulting in an increase in net income of $19 million for 2020, 2019 and 2018. The increase in net income is entirely attributable to the noncontrolling interests. Income attributable to Pinnacle West shareholders is not impacted by the consolidation. Our Consolidated Balance Sheets include the following amounts relating to the VIEs (dollars in thousands): December 31, 2020 December 31, 2019 Palo Verde sale leaseback property, plant and equipment, net of accumulated depreciation $ 98,036 $ 101,906 Equity-Noncontrolling interests 119,290 122,540 Assets of the VIEs are restricted and may only be used for payment to the noncontrolling interest holders. These assets are reported on our consolidated financial statements. APS is exposed to losses relating to these VIEs upon the occurrence of certain events that APS does not consider to be reasonably likely to occur. Under certain circumstances (for example, the NRC issuing specified violation orders with respect to Palo Verde or the occurrence of specified nuclear events), APS would be required to make specified payments to the VIEs’ noncontrolling equity participants and take title to the leased Unit 2 interests, which, if appropriate, may be required to be written down in value. If such an event were to occur during the lease periods, APS may be required to pay the noncontrolling equity participants approximately $306 million beginning in 2021, and up to $456 million over the lease extension terms. For regulatory ratemaking purposes, the agreements continue to be treated as operating leases and, as a result, we have recorded a regulatory asset relating to the arrangements. |
Investments in Nuclear Decommis
Investments in Nuclear Decommissioning Trusts and Other Special Use Funds | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Nuclear Decommissioning Trusts and Other Special Use Funds | Investments in Nuclear Decommissioning Trusts and Other Special Use Funds We have investments in debt and equity securities held in Nuclear Decommissioning Trusts, Coal Reclamation Escrow Accounts, and an Active Union Employee Medical Account. Investments in debt securities are classified as available-for-sale securities. We record both debt and equity security investments at their fair value on our Consolidated Balance Sheets. (See Note 13 for a discussion of how fair value is determined and the classification of the investments within the fair value hierarchy.) The investments in each trust or account are restricted for use and are intended to fund specified costs and activities as further described for each fund below. Nuclear Decommissioning Trusts — APS established external decommissioning trusts in accordance with NRC regulations to fund the future costs APS expects to incur to decommission Palo Verde. Third-party investment managers are authorized to buy and sell securities per stated investment guidelines. The trust funds are invested in fixed income securities and equity securities. Earnings and proceeds from sales and maturities of securities are reinvested in the trusts. Because of the ability of APS to recover decommissioning costs in rates, and in accordance with the regulatory treatment, APS has deferred realized and unrealized gains and losses (including credit losses) in other regulatory liabilities. Coal Reclamation Escrow Account — APS has investments restricted for the future coal mine reclamation funding related to Four Corners. This escrow account is primarily invested in fixed income securities. Earnings and proceeds from sales of securities are reinvested in the escrow account. Because of the ability of APS to recover coal reclamation costs in rates, and in accordance with the regulatory treatment, APS has deferred realized and unrealized gains and losses (including credit losses) in other regulatory liabilities. Activities relating to APS coal reclamation escrow account investments are included within the other special use funds in the table below. Active Union Employee Medical Account — APS has investments restricted for paying active union employee medical costs. These investments may be used to pay active union employee medical costs incurred in the current and future periods. In 2020 and 2019, APS was reimbursed $14 million and $15 million, respectively, for prior year active union employee medical claims from the active union employee medical account. The account is invested primarily in fixed income securities. In accordance with the ratemaking treatment, APS has deferred the unrealized gains and losses (including credit losses) in other regulatory liabilities. Activities relating to active union employee medical account investments are included within the other special use funds in the tables below. On January 4, 2021, an additional $106 million of investments were transferred from APS other postretirement benefit trust assets into the active union employee medical account (see Note 8). APS The following tables present the unrealized gains and losses based on the original cost of the investment and summarizes the fair value of APS’s nuclear decommissioning trust and other special use fund assets at December 31, 2020 and December 31, 2019 (dollars in thousands): December 31, 2020 Fair Value Total Total Investment Type: Nuclear Decommissioning Trusts Other Special Use Funds Total Equity Securities $ 639,851 $ 37,337 $ 677,188 $ 421,666 $ — Available for Sale-Fixed Income Securities 516,412 216,668 733,080 (a) 46,581 (398) Other (17,828) 504 (17,324) (b) — — Total $ 1,138,435 $ 254,509 $ 1,392,944 $ 468,247 $ (398) (a) As of December 31, 2020, the amortized cost basis of these available-for-sale investments is $687 million. (b) Represents net pending securities sales and purchases. December 31, 2019 Fair Value Total Total Investment Type: Nuclear Decommissioning Trusts Other Special Use Funds Total Equity Securities $ 529,716 $ 7,142 $ 536,858 $ 337,681 $ — Available for Sale-Fixed Income Securities 478,658 237,479 716,137 (a) 25,795 (669) Other 2,401 474 2,875 (b) — — Total $ 1,010,775 $ 245,095 $ 1,255,870 $ 363,476 $ (669) (a) As of December 31, 2019, the amortized cost basis of these available-for-sale investments is $691 million. (b) Represents net pending securities sales and purchases. The following table sets forth APS’s realized gains and losses relating to the sale and maturity of available-for-sale debt securities and equity securities, and the proceeds from the sale and maturity of these investment securities for the years ended December 31, 2020, 2019 and 2018 (dollars in thousands): Year Ended December 31, Nuclear Decommissioning Trusts Other Special Use Funds Total 2020 Realized gains $ 12,194 $ 176 $ 12,370 Realized losses (5,553) (15) (5,568) Proceeds from the sale of securities (a) 675,035 144,484 819,519 2019 Realized gains 11,024 108 11,132 Realized losses (6,972) — (6,972) Proceeds from the sale of securities (a) 473,806 245,228 719,034 2018 Realized gains 6,679 1 6,680 Realized losses (13,552) — (13,552) Proceeds from the sale of securities (a) 554,385 98,648 653,033 (a) Proceeds are reinvested in the nuclear decommissioning trusts or other special use funds, excluding amounts reimbursed to the Company for active union employee medical claims from the active union trust. Fixed Income Securities Contractual Maturities The fair value of fixed income securities, summarized by contractual maturities, at December 31, 2020 is as follows (dollars in thousands): Nuclear Decommissioning Trusts Coal Reclamation Escrow Account Active Union Medical Trust Total Less than one year $ 19,563 $ 33,079 $ — $ 52,642 1 year – 5 years 151,537 29,722 142,311 323,570 5 years – 10 years 133,307 2,738 — 136,045 Greater than 10 years 212,005 8,818 — 220,823 Total $ 516,412 $ 74,357 $ 142,311 $ 733,080 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss | 12 Months Ended |
Dec. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | Changes in Accumulated Other Comprehensive Loss The following table shows the changes in Pinnacle West’s consolidated accumulated other comprehensive loss, including reclassification adjustments, net of tax, by component for the years ended December 31, 2020 and 2019 (dollars in thousands): Pension and Other Postretirement Benefits Derivative Instruments Total Balance at December 31, 2018 $ (45,997) $ (1,711) $ (47,708) OCI (loss) before reclassifications (14,041) — (14,041) Amounts reclassified from accumulated other comprehensive loss 3,516 (a) 1,137 (b) 4,653 Balance at December 31, 2019 (56,522) (574) (57,096) OCI (loss) before reclassifications (8,370) (2,089) (10,459) Amounts reclassified from accumulated other comprehensive loss 4,167 (a) 592 (b) 4,759 Balance at December 31, 2020 $ (60,725) $ (2,071) $ (62,796) (a) These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost (see Note 8). (b) These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA (see Note 16). Changes in Accumulated Other Comprehensive Loss — APS The following table shows the changes in APS’s consolidated accumulated other comprehensive loss, including reclassification adjustments, net of tax, by component for the years ended December 31, 2020 and 2019 (dollars in thousands): Pension and Other Postretirement Benefits Derivative Instruments Total Balance at December 31, 2018 $ (25,396) $ (1,711) $ (27,107) OCI (loss) before reclassifications (12,572) — (12,572) Amounts reclassified from accumulated other comprehensive loss 3,020 (a) 1,137 (b) 4,157 Balance at December 31, 2019 (34,948) (574) (35,522) OCI (loss) before reclassifications (9,568) (18) (9,586) Amounts reclassified from accumulated other comprehensive loss 3,598 (a) 592 (b) 4,190 Balance at December 31, 2020 $ (40,918) $ — $ (40,918) (a) These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost (see Note 8). (b) These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA (see Note 16). |
SCHEDULE I - CONDENSED FINANCIA
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
CONDENSED FINANCIAL INFORMATION OF REGISTRANT | PINNACLE WEST CAPITAL CORPORATION HOLDING COMPANY SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (dollars in thousands) Year Ended December 31, 2020 2019 2018 Operating expenses $ 7,901 $ 12,451 $ 53,844 Other Equity in earnings of subsidiaries 566,147 562,946 569,249 Other expense (4,586) (3,957) (3,202) Total 561,561 558,989 566,047 Interest expense 14,021 15,069 12,074 Income before income taxes 539,639 531,469 500,129 Income tax benefit (10,920) (6,851) (10,918) Net income attributable to common shareholders 550,559 538,320 511,047 Other comprehensive income (loss) — attributable to common shareholders (5,700) (9,388) 5,846 Total comprehensive income — attributable to common shareholders $ 544,859 $ 528,932 $ 516,893 See Combined Notes to Consolidated Financial Statements. PINNACLE WEST CAPITAL CORPORATION HOLDING COMPANY SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED BALANCE SHEETS (dollars in thousands) December 31, 2020 2019 ASSETS Current assets Cash and cash equivalents $ 19 $ 19 Accounts receivable 123,980 104,640 Income tax receivable 14,719 15,905 Other current assets 298 401 Total current assets 139,016 120,965 Investments and other assets Investments in subsidiaries 6,400,339 6,067,957 Deferred income taxes 7,589 40,757 Other assets 52,595 50,139 Total investments and other assets 6,460,523 6,158,853 Total Assets $ 6,599,539 $ 6,279,818 LIABILITIES AND EQUITY Current liabilities Accounts payable $ 5,669 $ 7,634 Accrued taxes 16,998 8,573 Common dividends payable 93,531 87,982 Short-term borrowings 169,000 114,675 Current maturities of long-term debt — 450,000 Operating lease liabilities 90 81 Other current liabilities 15,306 15,126 Total current liabilities 300,594 684,071 Long-term debt less current maturities (Note 7) 496,321 (575) Pension liabilities 17,541 17,942 Operating lease liabilities 1,683 1,780 Other 30,607 23,412 Total deferred credits and other 49,831 43,134 COMMITMENTS AND CONTINGENCIES (SEE NOTES) Common stock equity Common stock 2,671,193 2,650,134 Accumulated other comprehensive loss (62,796) (57,096) Retained earnings 3,025,106 2,837,610 Total Pinnacle West Shareholders’ equity 5,633,503 5,430,648 Noncontrolling interests 119,290 122,540 Total Equity 5,752,793 5,553,188 Total Liabilities and Equity $ 6,599,539 $ 6,279,818 See Combined Notes to Consolidated Financial Statements. PINNACLE WEST CAPITAL CORPORATION HOLDING COMPANY SCHEDULE I — CONDENSED FINANCIAL INFORMATION OF REGISTRANT CONDENSED STATEMENTS OF CASH FLOWS (dollars in thousands) Year Ended December 31, 2020 2019 2018 Cash flows from operating activities Net income $ 550,559 $ 538,320 $ 511,047 Adjustments to reconcile net income to net cash provided by operating activities: Equity in earnings of subsidiaries — net (566,147) (562,946) (569,249) Depreciation and amortization 76 76 76 Deferred income taxes 33,007 (35,831) 49,535 Accounts receivable (7,903) 182 (7,881) Accounts payable (1,964) (2,129) 1,967 Accrued taxes and income tax receivables — net 9,610 16,400 (13,535) Dividends received from subsidiaries 357,500 336,300 316,000 Other 20,163 (1,300) 31,807 Net cash flow provided by operating activities 394,901 289,072 319,767 Cash flows from investing activities Investments in subsidiaries (137,881) 1,557 (142,796) Repayments of loans from subsidiaries 932 4,190 6,477 Advances of loans to subsidiaries (7,261) (4,165) (500) Net cash flow provided by (used for) investing activities (144,210) 1,582 (136,819) Cash flows from financing activities Issuance of long-term debt 496,950 — 150,000 Short-term debt borrowings under revolving credit facility 211,690 49,000 20,000 Short-term debt repayments under revolving credit facility (230,690) (65,000) (32,000) Commercial paper — net 73,325 54,275 (7,000) Dividends paid on common stock (350,577) (329,643) (308,892) Repayment of long-term debt (450,000) — — Common stock equity issuance — net of purchases (1,389) 692 (5,055) Other — — (1) Net cash flow used for financing activities (250,691) (290,676) (182,948) Net decrease in cash and cash equivalents — (22) — Cash and cash equivalents at beginning of year 19 41 41 Cash and cash equivalents at end of year $ 19 $ 19 $ 41 See Combined Notes to Consolidated Financial Statements. PINNACLE WEST CAPITAL CORPORATION HOLDING COMPANY NOTES TO FINANCIAL STATEMENTS OF HOLDING COMPANY The Combined Notes to Consolidated Financial Statements in Part II, Item 8 should be read in conjunction with the Pinnacle West Capital Corporation Holding Company Financial Statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Pinnacle West is a holding company that conducts business through its subsidiaries, APS, El Dorado, BCE and 4CA. APS, our wholly-owned subsidiary, is a vertically-integrated electric utility that provides either retail or wholesale electric service to substantially all of the state of Arizona, with the major exceptions of about one-half of the Phoenix metropolitan area, the Tucson metropolitan area and Mohave County in northwestern Arizona. APS accounts for essentially all of our revenues and earnings, and is expected to continue to do so. El Dorado is an investment firm. BCE is a subsidiary that was formed in 2014 that focuses on growth opportunities that leverage the Company’s core expertise in the electric energy industry. 4CA is a subsidiary that was formed in 2016 as a result of the purchase of El Paso’s 7% interest in Four Corners. (See Note 11 for more information on 4CA matters.) Pinnacle West’s Consolidated Financial Statements include the accounts of Pinnacle West and our subsidiaries: APS, El Dorado, BCE and 4CA. APS’s Consolidated Financial Statements include the accounts of APS and certain VIEs relating to the Palo Verde sale leaseback. Intercompany accounts and transactions between the consolidated companies have been eliminated. We consolidate VIEs for which we are the primary beneficiary. We determine whether we are the primary beneficiary of a VIE through a qualitative analysis that identifies which variable interest holder has the controlling financial interest in the VIE. In performing our primary beneficiary analysis, we consider all relevant facts and circumstances, including the design and activities of the VIE, the terms of the contracts the VIE has entered into, and which parties participated significantly in the design or redesign of the entity. We continually evaluate our primary beneficiary conclusions to determine if changes have occurred which would impact our primary beneficiary assessments. We have determined that APS is the primary beneficiary of certain VIE lessor trusts relating to the Palo Verde sale leaseback, and therefore APS consolidates these entities. (See Note 18 for additional information.) Our consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments, except as otherwise disclosed in the notes) that we believe are necessary for the fair presentation of our financial position, results of operations and cash flows for the periods presented. |
Accounting Records and Use of Estimates | Accounting Records and Use of Estimates Our accounting records are maintained in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Regulatory Accounting | Regulatory Accounting APS is regulated by the ACC and FERC. The accompanying financial statements reflect the rate-making policies of these commissions. As a result, we capitalize certain costs that would be included as expense in the current period by unregulated companies. Regulatory assets represent incurred costs that have been deferred because they are probable of future recovery in customer rates. Regulatory liabilities generally represent amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and are refundable to customers. |
Electric Revenues | Electric Revenues Revenues primarily consist of activities that are classified as revenues from contracts with customers. Our electric revenues generally represent a single performance obligation delivered over time. We have elected to apply the practical expedient that allows us to recognize revenue based on the amount to which we have a right to invoice for services performed. We derive electric revenues primarily from sales of electricity to our regulated retail customers. Revenues related to the sale of electricity are generally recognized when service is rendered or electricity is delivered to customers. Unbilled revenues are estimated by applying an average revenue/kWh by customer class to the number of estimated kWhs delivered but not billed. Differences historically between the actual and estimated unbilled revenues are immaterial. We exclude sales taxes and franchise fees on electric revenues from both revenue and taxes other than income taxes. Revenues from our regulated retail customers and non-derivative instruments are reported on a gross basis on Pinnacle West’s Consolidated Statements of Income. In the electricity business, some contracts to purchase electricity are netted against other contracts to sell electricity. This is called a “book-out” and usually occurs for contracts that have the same terms (quantities, delivery points and delivery periods) and for which power does not flow. We net these book-outs, which reduces both wholesale revenues and fuel and purchased power costs. Some of our cost recovery mechanisms are alternative revenue programs. For alternative revenue programs that meet specified accounting criteria, we recognize revenues when the specific events permitting billing of the additional revenues have been completed. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The allowance for doubtful accounts represents our best estimate of accounts receivable and accrued unbilled revenues that will ultimately be uncollectible due to credit loss risk. The allowance includes a write-off component that is calculated by applying an estimated write-off factor to retail electric revenues. The write-off factor used to estimate uncollectible accounts is based upon consideration of historical collections experience, the current and forecasted economic environment, changes to our collection policies, and management’s best estimate of future collections success. (See Note 2.) |
Property, Plant and Equipment | Property, Plant and Equipment Utility plant is the term we use to describe the business property and equipment that supports electric service, consisting primarily of generation, transmission and distribution facilities. We report utility plant at its original cost, which includes: • material and labor; • contractor costs; • capitalized leases; • construction overhead costs (where applicable); and • allowance for funds used during construction. Property, plant and equipment balances and classes for APS are not materially different than Pinnacle West. We expense the costs of plant outages, major maintenance and routine maintenance as incurred. We charge retired utility plant to accumulated depreciation. Liabilities associated with the retirement of tangible long-lived assets are recognized at fair value as incurred and capitalized as part of the related tangible long-lived assets. Accretion of the liability due to the passage of time is an operating expense, and the capitalized cost is depreciated over the useful life of the long-lived asset. (See Note 12 for additional information.) APS records a regulatory liability for the excess that has been recovered in regulated rates over the amount calculated in accordance with guidance on accounting for asset retirement obligations. APS believes it is probable it will recover in regulated rates, the costs calculated in accordance with this accounting guidance. We record depreciation and amortization on utility plant on a straight-line basis over the remaining useful life of the related assets. The approximate remaining average useful lives of our utility property at December 31, 2020 were as follows: • Fossil plant — 17 years; • Nuclear plant — 20 years; • Other generation — 20 years; • Transmission — 38 years; • Distribution — 34 years; and • General plant — 7 years. |
Asset Retirement Obligations | Asset Retirement Obligations APS has asset retirement obligations for its Palo Verde nuclear facilities and certain other generation assets. The Palo Verde asset retirement obligation primarily relates to final plant decommissioning. This obligation is based on the NRC’s requirements for disposal of radiated property or plant and agreements APS reached with the ACC for final decommissioning of the plant. The non-nuclear generation asset retirement obligations primarily relate to requirements for removing portions of those plants at the end of the plant life or lease term and coal ash pond closures. Some of APS’s transmission and distribution assets have asset retirement obligations because they are subject to right of way and easement agreements that require final removal. These agreements have a history of uninterrupted renewal that APS expects to continue. As a result, APS cannot reasonably estimate the fair value of the asset retirement obligation related to such transmission and distribution assets. Additionally, APS has aquifer protection permits for some of its generation sites that require the closure of certain facilities at those sites. |
Allowance for Funds Used During Construction | Allowance for Funds Used During Construction AFUDC represents the approximate net composite interest cost of borrowed funds and an allowed return on the equity funds used for construction of regulated utility plant. Both the debt and equity components of AFUDC are non-cash amounts within the Consolidated Statements of Income. Plant construction costs, including AFUDC, are recovered in authorized rates through depreciation when completed projects are placed into commercial operation. AFUDC was calculated by using a composite rate of 6.72% for 2020, 6.98% for 2019, and 7.03% for 2018. APS compounds AFUDC semi-annually and ceases to accrue AFUDC when construction work is completed and the property is placed in service. On June 30, 2020, the United States Federal Energy Regulatory Commission (“FERC”) issued an order granting a waiver request related to the existing Allowance for Funds Used During Construction (“AFUDC”) rate calculation beginning March 1, 2020 through February 28, 2021. The order provides a simplified approach that companies may elect to implement in order to minimize the significant distorted effect on the AFUDC formula resulting from increased short-term debt financing during the COVID-19 pandemic. APS has adopted this simplified approach to computing the AFUDC composite rate by using a simple average of the actual historical short-term debt balances for 2019, instead of current period short-term debt balances, and has left all other aspects of the AFUDC formula composite rate calculation unchanged. This change impacts the AFUDC composite rate in 2020 but does not impact prior years. Furthermore, the change in the composite rate calculation does not impact our accounting treatment for these costs. The change did not have a material impact on our financial statements. |
Materials and Supplies | Materials and Supplies APS values materials, supplies and fossil fuel inventory using a weighted-average cost method. APS materials, supplies and fossil fuel inventories are carried at the lower of weighted-average cost or market, unless evidence indicates that the weighted-average cost (even if in excess of market) will be recovered. |
Fair Value Measurements | Fair Value Measurements We apply recurring fair value measurements to cash equivalents, derivative instruments, investments held in the nuclear decommissioning trust and other special use funds. On an annual basis, we apply fair value measurements to plan assets held in our retirement and other benefits plans. Due to the short-term nature of short-term borrowings, the carrying values of these instruments approximate fair value. Fair value measurements may also be applied on a nonrecurring basis to other assets and liabilities in certain circumstances such as impairments. We also disclose fair value information for our long-term debt, which is carried at amortized cost. (See Note 7 for additional information.) Fair value is the price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market which we can access for the asset or liability in an orderly transaction between willing market participants on the measurement date. Inputs to fair value may include observable and unobservable data. We maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We determine fair market value using observable inputs such as actively-quoted prices for identical instruments when available. When actively-quoted prices are not available for the identical instruments, we use other observable inputs, such as prices for similar instruments, other corroborative market information, or prices provided by other external sources. For options, long-term contracts and other contracts for which observable price data are not available, we use models and other valuation methods, which may incorporate unobservable inputs to determine fair market value. |
Derivative Accounting | Derivative Accounting We are exposed to the impact of market fluctuations in the commodity price and transportation costs of electricity, natural gas, coal and in interest rates. We manage risks associated with market volatility by utilizing various physical and financial instruments including futures, forwards, options and swaps. As part of our overall risk management program, we may use derivative instruments to hedge purchases and sales of electricity and natural gas. The changes in market value of such contracts have a high correlation to price changes in the hedged transactions. We also enter into derivative instruments for economic hedging purposes. Contracts that have the same terms (quantities, delivery points and delivery periods) and for which power does not flow are netted, which reduces both revenues and fuel and purchased power expenses in our Consolidated Statements of Income, but does not impact our financial condition, net income or cash flows. |
Loss Contingencies and Environmental Liabilities | Loss Contingencies and Environmental Liabilities Pinnacle West and APS are involved in certain legal and environmental matters that arise in the normal course of business. Contingent losses and environmental liabilities are recorded when it is determined that it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. When a range of the probable loss exists and no amount within the range is a better estimate than any other amount, Pinnacle West and APS record a loss contingency at the minimum amount in the range. Unless otherwise required by GAAP, legal fees are expensed as incurred. |
Retirement Plans and Other Postretirement Benefits | Retirement Plans and Other Postretirement Benefits Pinnacle West sponsors a qualified defined benefit and account balance pension plan for the employees of Pinnacle West and its subsidiaries, in addition to a non-qualified pension plan. We also sponsor another postretirement benefit plan for the employees of Pinnacle West and its subsidiaries that provides medical and life insurance benefits to retired employees. Pension and other postretirement benefit expense are determined by actuarial valuations, based on assumptions that are evaluated annually. (See Note 8 for additional information on pension and other postretirement benefits.) |
Nuclear Fuel | Nuclear Fuel APS amortizes nuclear fuel by using the unit-of-production method. The unit-of-production method is based on actual physical usage. APS divides the cost of the fuel by the estimated number of thermal units it expects to produce with that fuel. APS then multiplies that rate by the number of thermal units produced within the current period. This calculation determines the current period nuclear fuel expense. |
Income Taxes | Income Taxes |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Intangible Assets | Intangible Assets |
Investments | Investments El Dorado holds investments in both debt and equity securities. Investments in debt securities are generally accounted for as held-to-maturity and investments in equity securities are accounted for using either the equity method (if significant influence) or the measurement alternative for investments without readily determinable fair values (if less than 20% ownership and no significant influence). Bright Canyon holds investments in equity securities. Investments in equity securities are accounted for using either the equity method (if significant influence) or the measurement alternative for investments without readily determinable fair values (if less than 20% ownership and no significant influence). Our investments in the nuclear decommissioning trusts, coal reclamation escrow accounts and active union employee medical account, are accounted for in accordance with guidance on accounting for investments in debt and equity securities. (See Notes 13 and 19 for more information on these investments.) |
Leases | Leases We determine if an agreement is a lease at contract inception. A lease is defined as a contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To control the use of an identified asset an entity must have both a right to obtain substantially all of the benefits from the use of the asset and the right to direct the use of the asset. If we determine an agreement is a lease, and we are the lessee, we recognize a right-of-use lease asset and a lease liability at the lease commencement date. Lease liabilities are recognized based on the present value of the fixed lease payments over the lease term. To present value lease liabilities we use the implicit rate in the lease if the information is readily available, otherwise we use our incremental borrowing rate determined at lease commencement. Our incremental borrowing rate is based on the rate of interest we would have to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. When measuring right-of-use assets and lease liabilities we exclude variable lease payments, other than those that depend on an index or rate or are in-substance fixed payments. For short-term leases with terms of 12 months or less, we do not recognize a right-of-use lease asset or lease liability. We recognize operating lease expense using a straight-line pattern over the periods of use. APS enters into purchased power contracts that may contain leases. This occurs when a purchased power agreement designates a specific power plant, APS obtains substantially all of the economic benefits from the use of the plant and has the right to direct the use of the plant. Lease costs relating to purchased power lease contracts are reported in fuel and purchased power on the Consolidated Statements of Income, and are subject to recovery under the PSA or RES (see Note 4 ). We also may enter into lease agreements related to vehicles, office space, land, and other equipment. (See Note 9 for information on our lease agreements.) |
Business Segments | Business Segments Pinnacle West’s reportable business segment is our regulated electricity segment, which consists of traditional regulated retail and wholesale electricity businesses (primarily electricity service to Native Load customers) and related activities and includes electricity generation, transmission and distribution. All other segment activities are insignificant. |
New Accounting Standards | New Accounting Standards Standards Adopted in 2020 ASU 2016-13, Financial Instruments: Measurement of Credit Losses In June 2016, a new accounting standard was issued that amends the measurement of credit losses on certain financial instruments. The new standard requires entities to use a current expected credit loss model to measure impairment of certain investments in debt securities, trade accounts receivables and other financial instruments. Since the issuance of the new standard, various guidance has been issued that amends the new standard, including clarifications of certain aspects of the standard and targeted transition relief, among other changes. The new standard and related amendments were effective for us on January 1, 2020, and must be adopted using a modified retrospective approach for certain aspects of the standard, and a prospective approach for other aspects of the standard. We adopted the standard on January 1, 2020 using primarily the modified retrospective approach. While the adoption of this guidance changed our process and methodology for determining credit losses and resulted in additional disclosures, these changes did not have a material impact on our financial statements. (See Note 2 for allowance for doubtful accounts related credit loss disclosures.) ASU 2018-14, Retirement Benefits: Changes to the Disclosure Requirements for Defined Benefit Plans In August 2018, a new accounting standard was issued that amends certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments remove disclosures that are no longer considered beneficial, clarifies specific disclosure requirements and adds new disclosure requirements relating to defined benefit plans. The new standard is effective for fiscal years ending after December 15, 2020. We adopted and implemented the standard on a retrospective basis in our financial statements for the year ended December 31, 2020. While the adoption of this guidance modified the disclosure requirements relating to defined benefit plans, these changes did not have a material impact on our financial statements. (See Note 8 for Retirement Plans and Other Postretirement Benefits disclosure.) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of property, plant and equipment | Pinnacle West’s property, plant and equipment included in the December 31, 2020 and 2019 Consolidated Balance Sheets is composed of the following (dollars in thousands): Property, Plant and Equipment: 2020 2019 Generation $ 9,199,012 $ 8,916,872 Transmission 3,290,477 3,095,907 Distribution 7,107,007 6,690,697 General plant 1,241,389 1,132,816 Plant in service and held for future use 20,837,885 19,836,292 Accumulated depreciation and amortization (7,110,310) (6,637,857) Net 13,727,575 13,198,435 Construction work in progress 937,384 808,133 Palo Verde sale leaseback, net of accumulated depreciation 98,036 101,906 Intangible assets, net of accumulated amortization 282,570 290,564 Nuclear fuel, net of accumulated amortization 113,645 123,500 Total property, plant and equipment $ 15,159,210 $ 14,522,538 |
Summary of supplemental cash flow information | The following table summarizes supplemental Pinnacle West cash flow information for each of the last three years (dollars in thousands): Year ended December 31, 2020 2019 2018 Cash paid (received) during the period for: Income taxes, net of refunds $ (3,019) $ 12,535 $ 21,173 Interest, net of amounts capitalized 216,951 218,664 208,479 Significant non-cash investing and financing activities: Accrued capital expenditures $ 113,502 $ 141,297 $ 132,620 Dividends declared but not paid 93,531 87,982 82,675 Sale of 4CA 7% interest in Four Corners — — 68,907 The following table summarizes supplemental APS cash flow information for each of the last three years (dollars in thousands): Year ended December 31, 2020 2019 2018 Cash paid (received) during the period for: Income taxes, net of refunds $ 41,176 $ (15,042) $ 77,942 Interest, net of amounts capitalized 206,328 204,261 196,419 Significant non-cash investing and financing activities: Accrued capital expenditures $ 113,502 $ 141,297 $ 132,620 Dividends declared but not paid 93,500 88,000 82,700 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table provides detail of Pinnacle West’s consolidated revenue disaggregated by revenue sources (dollars in thousands): Year Ended December 31, Year Ended December 31, Year Ended December 31, 2020 2019 2018 Retail Electric Service Residential $ 1,929,178 (a) $ 1,761,122 $ 1,867,370 Non-Residential 1,486,098 1,509,514 1,628,891 Wholesale Energy Sales 93,345 121,805 109,198 Transmission Services for Others 65,859 62,460 60,261 Other Sources 12,502 16,308 25,527 Total Operating Revenues $ 3,586,982 $ 3,471,209 $ 3,691,247 |
Schedule of Allowance for Doubtful Accounts | The following table provides a rollforward of Pinnacle West’s allowance for doubtful accounts all of which primarily relates to APS (dollars in thousands): Year Ended December 31, 2020 Year Ended December 31, 2019 Year Ended December 31, 2018 Allowance for doubtful accounts, balance at beginning of period $ 8,171 $ 4,069 $ 2,513 Bad debt expense 20,633 11,819 10,870 Actual write-offs (9,022) (7,717) (9,314) Allowance for doubtful accounts, balance at end of period $ 19,782 $ 8,171 $ 4,069 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Regulated Operations [Abstract] | |
Schedule Of Capital Structure and Cost Of Capital | 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 2020 and 2019 (dollars in thousands): Twelve Months Ended 2020 2019 Beginning balance $ 70,137 $ 37,164 Deferred fuel and purchased power costs — current period 93,651 82,481 Amounts refunded/(charged) to customers 12,047 (49,508) Ending balance $ 175,835 $ 70,137 |
Schedule of regulatory assets | The detail of regulatory assets is as follows (dollars in thousands): S December 31, 2020 December 31, 2019 Amortization Through Current Non-Current Current Non-Current Pension (a) $ — $ 469,953 $ — $ 660,223 Deferred fuel and purchased power (b) (c) 2021 175,835 — 70,137 — Income taxes — AFUDC equity 2050 7,169 158,776 6,800 154,974 Retired power plant costs 2033 28,181 114,214 28,182 142,503 Ocotillo deferral N/A — 95,723 — 38,144 SCR deferral N/A — 81,307 — 52,644 Deferred property taxes 2027 8,569 49,626 8,569 58,196 Lost fixed cost recovery (b) 2021 41,807 — 26,067 — Deferred compensation 2036 — 36,195 — 36,464 Four Corners cost deferral 2024 8,077 24,075 8,077 32,152 Income taxes — investment tax credit basis adjustment 2049 1,113 24,291 1,098 24,981 Palo Verde VIEs (Note 18) 2046 — 21,255 — 20,635 Coal reclamation 2026 1,068 16,999 1,546 17,688 Deferred fuel and purchased power — mark-to-market (Note 16) 2024 3,341 9,244 36,887 33,185 Loss on reacquired debt 2038 1,689 10,877 1,637 12,031 Mead-Phoenix transmission line — contributions in aid of construction 2050 332 9,380 332 9,712 Demand side management (b) 2022 — 7,268 — — Tax expense adjustor mechanism (b) 2021 6,226 — 1,612 — Tax expense of Medicare subsidy 2024 1,235 3,704 1,235 4,940 PSA interest 2021 4,355 — 1,917 — TCA balancing account (b) 2021 — — 6,324 2,885 Other Various 2,716 1,100 2,787 2,716 Total regulatory assets (d) $ 291,713 $ 1,133,987 $ 203,207 $ 1,304,073 (a) This asset represents the future recovery of pension benefit obligations 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. (See Note 8 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.” |
Schedule of regulatory liabilities | The detail of regulatory liabilities is as follows (dollars in thousands): December 31, 2020 December 31, 2019 Amortization Through Current Non-Current Current Non-Current Excess deferred income taxes - ACC — Tax Cuts and Jobs Act (a) 2046 $ 41,330 $ 1,012,583 $ 59,918 $ 1,054,053 Excess deferred income taxes - FERC — Tax Cuts and Jobs Act (a) 2058 7,240 229,147 6,302 237,357 Asset retirement obligations 2057 — 506,049 — 418,423 Other postretirement benefits (d) 37,705 349,588 37,575 139,634 Removal costs (c) 52,844 103,008 47,356 136,072 Income taxes — change in rates 2050 2,839 66,553 2,797 68,265 Four Corners coal reclamation 2038 5,460 49,435 1,059 51,704 Spent nuclear fuel 2027 6,768 44,221 6,676 51,019 Income taxes — deferred investment tax credit 2049 2,231 48,648 2,202 50,034 Renewable energy standard (b) 2021 39,442 103 39,287 10,300 Sundance maintenance 2031 2,989 11,508 5,698 11,319 Property tax deferral N/A — 13,856 — 7,046 Demand side management (b) 2021 10,819 — 15,024 24,146 FERC transmission true up 2022 6,598 3,008 1,045 2,004 TCA balancing account (b) 2022 2,902 4,672 — — Tax expense adjustor mechanism (b) (e) 2021 7,089 — 7,018 — Active union medical trust N/A — 6,057 — 2,041 Deferred gains on utility property 2022 2,423 1,544 2,423 4,163 Other Various 409 189 532 255 Total regulatory liabilities $ 229,088 $ 2,450,169 $ 234,912 $ 2,267,835 (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 8. (e) Pursuant to Decision 77852, the ACC has authorized APS to return to customers up to $7 million of liability recorded to the TEAM balancing account through December 31, 2021. Should new base rates become effective prior to December 31, 2021, any remaining unreturned balance is anticipated to be included in the new base rates. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of unrecognized tax benefits roll forward | The following is a tabular reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties, at the beginning and end of the year that are included in accrued taxes and unrecognized tax benefits (dollars in thousands): Pinnacle West Consolidated APS Consolidated 2020 2019 2018 2020 2019 2018 Total unrecognized tax benefits, January 1 $ 43,435 $ 40,731 $ 41,966 $ 43,435 $ 40,731 $ 41,966 Additions for tax positions of the current year 3,418 3,373 3,436 3,418 3,373 3,436 Additions for tax positions of prior years 1,431 1,843 2,696 1,431 1,843 2,696 Reductions for tax positions of prior years for: Changes in judgment (1,965) (2,078) (1,764) (1,965) (2,078) (1,764) Settlements with taxing authorities — — — — — — Lapses of applicable statute of limitations (664) (434) (5,603) (664) (434) (5,603) Total unrecognized tax benefits, December 31 $ 45,655 $ 43,435 $ 40,731 $ 45,655 $ 43,435 $ 40,731 |
Summary of unrecognized tax benefits | Included in the balances of unrecognized tax benefits are the following tax positions that, if recognized, would decrease our effective tax rate (dollars in thousands): Pinnacle West Consolidated APS Consolidated 2020 2019 2018 2020 2019 2018 Tax positions, that if recognized, would decrease our effective tax rate $ 25,714 $ 22,813 $ 19,504 $ 25,714 $ 22,813 $ 19,504 Pinnacle West Consolidated APS Consolidated 2020 2019 2018 2020 2019 2018 Unrecognized tax benefit interest expense/(benefit) recognized $ 266 $ 459 $ (780) $ 266 $ 459 $ (780) Following are the total amount of accrued liabilities for interest recognized related to unrecognized benefits that could reverse and decrease our effective tax rate to the extent matters are settled favorably (dollars in thousands): Pinnacle West Consolidated APS Consolidated 2020 2019 2018 2020 2019 2018 Unrecognized tax benefit interest accrued $ 1,855 $ 1,589 $ 1,130 $ 1,855 $ 1,589 $ 1,130 |
Components of income tax expense | he components of income tax expense are as follows (dollars in thousands): Pinnacle West Consolidated APS Consolidated Year Ended December 31, Year Ended December 31, 2020 2019 2018 2020 2019 2018 Current: Federal $ 11,869 $ (13,551) $ 18,375 $ 57,299 $ (54,697) $ 88,180 State 1,932 3,195 3,342 99 695 1,877 Total current 13,801 (10,356) 21,717 57,398 (54,002) 90,057 Deferred: Federal 53,398 (14,982) 94,721 15,122 29,321 32,436 State 10,974 9,565 17,464 16,244 15,109 22,321 Total deferred 64,372 (5,417) 112,185 31,366 44,430 54,757 Income tax expense/(benefit) $ 78,173 $ (15,773) $ 133,902 $ 88,764 $ (9,572) $ 144,814 |
Comparison of pretax income from continuing operations at the federal income tax rate to income tax expense - continuing operations | he following chart compares pretax income at the 21% statutory federal income tax rate to income tax expense (dollars in thousands): Pinnacle West Consolidated APS Consolidated Year Ended December 31, Year Ended December 31, 2020 2019 2018 2020 2019 2018 Federal income tax expense at statutory rate $ 136,127 $ 113,828 $ 139,533 $ 142,020 $ 120,790 $ 154,260 Increases (reductions) in tax expense resulting from: State income tax net of federal income tax benefit 19,146 18,599 23,115 20,124 19,267 24,531 State income tax credits net of federal income tax benefit (8,951) (8,519) (6,704) (7,213) (6,781) (5,440) Nondeductible expenditures associated with ballot initiative — — 7,879 — — — Stock compensation 34 (2,252) (1,804) 183 (1,054) (780) Excess deferred income taxes — Tax Cuts and Jobs Act (50,543) (124,082) (6,725) (50,543) (124,082) (4,715) Allowance for equity funds used during construction (see Note 1) (2,747) (2,476) (7,231) (2,747) (2,476) (7,231) Palo Verde VIE noncontrolling interest (see Note 18) (4,094) (4,094) (4,094) (4,094) (4,094) (4,094) Investment tax credit amortization (7,510) (6,851) (6,742) (7,510) (6,851) (6,742) Other (3,289) 74 (3,325) (1,456) (4,291) (4,975) Income tax expense/(benefit) $ 78,173 $ (15,773) $ 133,902 $ 88,764 $ (9,572) $ 144,814 |
Components of the net deferred income tax liability | The components of the net deferred income tax liability were as follows (dollars in thousands): Pinnacle West Consolidated APS Consolidated December 31, December 31, 2020 2019 2020 2019 DEFERRED TAX ASSETS Risk management activities $ 4,287 $ 17,552 $ 4,287 $ 17,552 Regulatory liabilities: Excess deferred income taxes — Tax Cuts and Jobs Act 319,091 335,877 319,091 335,877 Asset retirement obligation and removal costs 157,470 143,011 157,470 143,011 Unamortized investment tax credits 50,879 52,236 50,879 52,236 Other postretirement benefits 95,778 43,841 95,778 43,841 Other 43,551 52,382 43,551 52,382 Operating lease liabilities 107,853 15,497 107,414 15,497 Pension liabilities 45,853 73,210 40,168 67,976 Coal reclamation liabilities 42,065 40,837 42,065 40,837 Renewable energy incentives 25,355 28,066 25,355 28,066 Credit and loss carryforwards 26,460 54,795 8,034 10,992 Other 78,113 47,605 78,113 55,451 Total deferred tax assets 996,755 904,909 972,205 863,718 DEFERRED TAX LIABILITIES Plant-related (2,489,899) (2,448,458) (2,489,899) (2,448,458) Risk management activities (1,174) (27) (1,174) (27) Pension and other postretirement assets (123,462) (21,892) (122,580) (21,458) Other special use funds (42,927) (44,507) (42,927) (44,507) Operating lease right-of-use assets (107,853) (15,497) (107,414) (15,497) Regulatory assets: Allowance for equity funds used during construction (41,038) (40,023) (41,038) (40,023) Deferred fuel and purchased power (47,673) (35,162) (47,673) (35,162) Pension benefits (116,219) (163,339) (116,219) (163,339) Retired power plant costs (35,214) (42,228) (35,214) (42,228) Other (106,227) (82,722) (106,227) (82,722) Other (20,472) (3,393) (5,513) (3,393) Total deferred tax liabilities (3,132,158) (2,897,248) (3,115,878) (2,896,814) Deferred income taxes — net $ (2,135,403) $ (1,992,339) $ (2,143,673) $ (2,033,096) |
Lines of Credit and Short-Ter_2
Lines of Credit and Short-Term Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Lines of Credit and Short-Term Borrowings | |
Schedule of consolidated credit facilities and amounts available and outstanding | The table below presents the consolidated credit facilities and the amounts available and outstanding as of December 31, 2020 and 2019 (dollars in thousands): December 31, 2020 December 31, 2019 Pinnacle West APS Total Pinnacle West APS Total Commitments under Credit Facilities $ 231,000 $ 1,000,000 $ 1,231,000 $ 250,000 $ 1,000,000 $ 1,250,000 Outstanding Commercial Paper, Term Loan and Revolving Credit Facility Borrowings (169,000) — (169,000) (114,675) — (114,675) Amount of Credit Facilities Available $ 62,000 $ 1,000,000 $ 1,062,000 $ 135,325 $ 1,000,000 $ 1,135,325 Weighted-Average Commitment Fees 0.125% 0.100% 0.125% 0.100% |
Long-Term Debt and Liquidity _2
Long-Term Debt and Liquidity Matters (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Components of long-term debt on the Consolidated Balance Sheets | The following table presents the components of long-term debt on the Consolidated Balance Sheets outstanding at December 31, 2020 and 2019 (dollars in thousands): Maturity Interest December 31, Dates (a) Rates 2020 2019 APS Pollution control bonds: Variable 2029 (b) $ 35,975 $ 35,975 Fixed 2024 4.70% — 115,150 Total pollution control bonds 35,975 151,125 Senior unsecured notes 2024-2050 2.55%-6.88% 5,830,000 4,875,000 Term loans (c) — 200,000 Unamortized discount (15,900) (12,434) Unamortized premium 14,781 7,423 Unamortized debt issuance cost (46,911) (37,981) Total APS long-term debt 5,817,945 5,183,133 Less current maturities — 350,000 Total APS long-term debt less current maturities 5,817,945 4,833,133 Pinnacle West Senior unsecured notes 2025 1.3% 500,000 300,000 Term loan (d) — 150,000 Unamortized discount (44) (57) Unamortized debt issuance cost (3,635) (518) Total Pinnacle West long-term debt 496,321 449,425 Less current maturities — 450,000 Total Pinnacle West long-term debt less current maturities 496,321 (575) TOTAL LONG-TERM DEBT LESS CURRENT MATURITIES $ 6,314,266 $ 4,832,558 (a) This schedule does not reflect the timing of redemptions that may occur prior to maturities. (b) The weighted-average rate for the variable rate pollution control bonds was 0.18% at December 31, 2020 and 1.54% at December 31, 2019. (c) The weighted-average interest rate was 2.12% at December 31, 2019. This term loan was repaid on May 26, 2020. See additional details below. (d) The weighted-average interest rate was 2.20% at December 31, 2019. This term loan was repaid on June 19, 2020. See additional details below. |
Principal payments due on Pinnacle West's and APS's total long-term debt | The following table shows principal payments due on Pinnacle West’s and APS’s total long-term debt (dollars in thousands): Year Consolidated Consolidated 2021 $ — $ — 2022 — — 2023 — — 2024 250,000 250,000 2025 800,000 300,000 Thereafter 5,315,975 5,315,975 Total $ 6,365,975 $ 5,865,975 |
Schedule of estimated fair value of long-term debt, including current maturities | The following table represents the estimated fair value of our long-term debt, including current maturities (dollars in thousands): As of As of Carrying Fair Value Carrying Fair Value Pinnacle West $ 496,321 $ 509,050 $ 449,425 $ 450,822 APS 5,817,945 7,103,791 5,183,133 5,743,570 Total $ 6,314,266 $ 7,612,841 $ 5,632,558 $ 6,194,392 |
Retirement Plans and Other Po_2
Retirement Plans and Other Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of net periodic benefit costs and the portion of these costs charged to expense (including administrative costs and excluding amounts capitalized as overhead construction, billed to electric plant participants or charged or amortized to the regulatory asset) | The following table provides details of the plans’ net periodic benefit costs and the portion of these costs charged to expense (including administrative costs and excluding amounts capitalized as overhead construction or billed to electric plant participants) (dollars in thousands): Pension Plans Other Benefits Plans 2020 2019 2018 2020 2019 2018 Service cost-benefits earned during the period $ 56,233 $ 49,902 $ 56,669 $ 22,236 $ 18,369 $ 21,100 Interest cost on benefit obligation 118,567 136,843 124,689 25,857 29,894 28,147 Expected return on plan assets (187,443) (171,884) (182,853) (40,077) (38,412) (42,082) Amortization of: Prior service credit — — — (37,575) (37,821) (37,842) Net actuarial loss 34,612 42,584 32,082 — — — Net periodic benefit cost/(benefit) $ 21,969 $ 57,445 $ 30,587 $ (29,559) $ (27,970) $ (30,677) Portion of cost/(benefit) charged to expense $ 3,386 $ 30,312 $ 10,120 $ (20,966) $ (19,859) $ (21,426) |
Schedule of changes in the benefit obligations and funded status | The following table shows the plans’ changes in the benefit obligations and funded status (dollars in thousands): Pension Plans Other Benefits Plans 2020 2019 2020 2019 Change in Benefit Obligation Benefit obligation at January 1 $ 3,613,114 $ 3,190,626 $ 746,924 $ 676,771 Service cost 56,233 49,902 22,236 18,369 Interest cost 118,567 136,843 25,857 29,894 Benefit payments (191,704) (177,882) (31,511) (32,486) Actuarial (gain) loss 306,657 413,625 (139,472) 54,376 Benefit obligation at December 31 3,902,867 3,613,114 624,034 746,924 Change in Plan Assets Fair value of plan assets at January 1 3,318,351 2,733,476 837,494 723,677 Actual return on plan assets 642,373 602,030 150,076 144,095 Employer contributions 100,000 150,000 — — Benefit payments (174,180) (167,155) (26,405) (30,278) Fair value of plan assets at December 31 3,886,544 3,318,351 961,165 837,494 Funded Status at December 31 $ (16,323) $ (294,763) $ 337,131 $ 90,570 |
Schedule of projected benefit obligation and the accumulated benefit obligation for pension plans with an accumulated obligation in excess of plan assets | The following table shows information for pension plans with an accumulated obligation in excess of plan assets (dollars in thousands): As of December 31, 2020 2019 Accumulated benefit obligation 171,672 169,091 Fair value of plan assets — — The Pinnacle West Capital Corporation Retirement Plan is more than 100% funded on an accumulated benefit obligation basis at December 31, 2020 and December 31, 2019, therefore the only pension plan with an accumulated benefit obligation in excess of plan assets in 2020 and 2019 is a non-qualified supplemental excess benefit retirement plan. The following table shows information for pension plans with a projected benefit obligation in excess of plan assets (dollars in thousands): As of December 31, 2020 2019 Projected benefit obligation 182,184 3,613,114 Fair value of plan assets — 3,318,351 |
Schedule of amounts recognized on the Consolidated Balance Sheets | The following table shows the amounts recognized on the Consolidated Balance Sheets (dollars in thousands): Pension Plans Other Benefits Plans 2020 2019 2020 2019 Noncurrent asset $ 165,861 $ — $ 337,131 $ 90,570 Current liability (15,700) (14,578) — — Noncurrent liability (166,484) (280,185) — — Net amount recognized $ (16,323) $ (294,763) $ 337,131 $ 90,570 |
Schedule of accumulated other comprehensive loss | The following table shows the details related to accumulated other comprehensive loss as of December 31, 2020 and 2019 (dollars in thousands): Pension Plans Other Benefits Plans 2020 2019 2020 2019 Net actuarial loss (gain) $ 552,301 $ 735,186 $ (237,233) $ 12,238 Prior service credit — — (152,337) (189,912) APS’s portion recorded as a regulatory (asset) liability (469,953) (660,223) 387,293 177,209 Income tax expense (benefit) (20,364) (18,546) 1,018 570 Accumulated other comprehensive loss (gain) $ 61,984 $ 56,417 $ (1,259) $ 105 |
Schedule of weighted-average assumptions used for both the pension and other benefits to determine benefit obligations and net periodic benefit costs | The following table shows the weighted-average assumptions used for both the pension and other benefits to determine benefit obligations and net periodic benefit costs: Benefit Obligations Benefit Costs 2020 2019 2020 2019 2018 Discount rate – pension plans 2.53 % 3.30 % 3.30 % 4.34 % 3.65 % Discount rate – other benefits plans 2.63 % 3.42 % 3.42 % 4.39 % 3.71 % Rate of compensation increase 4.00 % 4.00 % 4.00 % 4.00 % 4.00 % Expected long-term return on plan assets - pension plans N/A N/A 5.75 % 6.25 % 6.05 % Expected long-term return on plan assets - other benefit plans N/A N/A 4.85 % 5.40 % 5.40 % Initial healthcare cost trend rate (pre-65 participants) 6.50 % 7.00 % 7.00 % 7.00 % 7.00 % Ultimate healthcare cost trend rate (pre-65 participants) 4.75 % 4.75 % 4.75 % 4.75 % 4.75 % Number of years to ultimate trend rate (pre-65 participants) 5 6 5 7 8 Initial and ultimate healthcare cost trend rate (post-65 participants) (a) 2.00 % 4.75 % 4.75 % 4.75 % 4.75 % Interest crediting rate – cash balance pension plans 4.50 % 4.50 % 4.50 % 4.50 % 4.50 % (a) See discussion above relating to this assumptions impact on benefit obligations and the January 2021 asset transfer to the Active Union Employee Medical Account. |
Schedule of fair value of pension plan and other postretirement benefit plan assets, by asset category | Based on the IPS, and given the pension plan’s funded status at year-end 2020, the target and actual allocation for the pension plan at December 31, 2020 are as follows: Pension Plans Target Allocation Actual Allocation Long-term fixed income assets 72 % 68 % Return-generating assets 28 % 32 % Total 100 % 100 % The permissible range is within +/-3% of the target allocation shown in the above table, and also considers the plan’s funded status. At December 31, 2020, the return-seeking assets were slightly outside the target allocation permissible range and were rebalanced to within the target range during January 2021. The following table presents the additional target allocations, as a percent of total pension plan assets, for the return-generating assets: Asset Class Target Allocation Equities in US and other developed markets 17 % Equities in emerging markets 6 % Alternative investments 5 % Total 28 % Other Benefits Plans Actual Allocation Long-term fixed income assets 55 % Return-generating assets 45 % Total 100 % The fair value of Pinnacle West’s pension plan and other postretirement benefit plan assets at December 31, 2020, by asset category, are as follows (dollars in thousands): Level 1 Level 2 Other (a) Total Pension Plan: Cash and cash equivalents $ 9,911 $ — $ — $ 9,911 Fixed income securities: Corporate — 1,684,782 — 1,684,782 U.S. Treasury 794,571 — — 794,571 Other (b) — 112,224 — 112,224 Common stock equities (c) 331,058 — — 331,058 Mutual funds (d) 262,765 — — 262,765 Common and collective trusts: Equities — — 407,522 407,522 Real estate — — 191,595 191,595 Partnerships — — 22,420 22,420 Short-term investments and other (e) — — 69,696 69,696 Total $ 1,398,305 $ 1,797,006 $ 691,233 $ 3,886,544 Other Benefits: Cash and cash equivalents $ 1,909 $ — $ — $ 1,909 Fixed income securities: Corporate — 221,488 — 221,488 U.S. Treasury 258,102 — — 258,102 Other (b) — 8,316 — 8,316 Common stock equities (c) 175,605 — — 175,605 Mutual funds (d) 34,310 — — 34,310 Common and collective trusts: Equities — — 94,674 94,674 Real estate — — 19,778 19,778 Short-term investments and other (e) 142,995 — 3,988 146,983 Total $ 612,921 $ 229,804 $ 118,440 $ 961,165 (a) These investments primarily represent assets valued using NAV as a practical expedient, and have not been classified in the fair value hierarchy. (b) This category consists primarily of debt securities issued by municipalities. (c) This category primarily consists of U.S. common stock equities. (d) These funds invest in international common stock equities. (e) This category includes plan receivables and payables. Level 1 Level 2 Other (a) Total Pension Plan: Cash and cash equivalents $ 9,370 $ — $ — $ 9,370 Fixed income securities: Corporate — 1,541,729 — 1,541,729 U.S. Treasury 406,112 — — 406,112 Other (b) — 92,240 — 92,240 Common stock equities (c) 250,829 — — 250,829 Mutual funds (d) 185,928 — — 185,928 Common and collective trusts: Equities — — 392,403 392,403 Real estate — — 171,645 171,645 Fixed Income — — 98,065 98,065 Partnerships — — 103,796 103,796 Short-term investments and other (e) — — 66,234 66,234 Total $ 852,239 $ 1,633,969 $ 832,143 $ 3,318,351 Other Benefits: Cash and cash equivalents $ 2,184 $ — $ — $ 2,184 Fixed income securities: Corporate — 202,640 — 202,640 U.S. Treasury 353,650 — — 353,650 Other (b) — 7,999 — 7,999 Common stock equities (c) 146,316 — — 146,316 Mutual funds (d) 14,351 — — 14,351 Common and collective trusts: Equities — — 83,648 83,648 Real estate — — 19,806 19,806 Short-term investments and other (e) 2,881 — 4,019 6,900 Total $ 519,382 $ 210,639 $ 107,473 $ 837,494 (a) These investments primarily represent assets valued using NAV as a practical expedient, and have not been classified in the fair value hierarchy. (b) This category consists primarily of debt securities issued by municipalities. (c) This category primarily consists of U.S. common stock equities. (d) These funds invest in U.S. and international common stock equities. (e) This category includes plan receivables and payables. |
Schedule of estimated future benefit payments, which reflect estimated future employee service, for the next five years and the succeeding five years thereafter | Benefit payments, which reflect estimated future employee service, for the next five years and the succeeding five years thereafter, are estimated to be as follows (dollars in thousands): Year Pension Plans Other Benefits Plans 2021 $ 210,119 $ 31,204 2022 209,593 31,731 2023 215,527 32,196 2024 220,241 31,914 2025 220,787 31,484 Years 2026-2030 1,116,848 153,536 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of lease costs | The following table provides information related to our lease costs (dollars in thousands): Year Ended Year Ended Purchased Power Lease Contracts Land, Property & Equipment Leases Total Purchased Power Lease Contracts Land, Property & Equipment Leases Total Operating lease cost $ 68,883 $ 18,493 $ 87,376 $ 42,190 $ 18,038 $ 60,228 Variable lease cost 121,359 972 122,331 113,233 782 114,015 Short-term lease cost — 3,804 3,804 — 4,385 4,385 Total lease cost $ 190,242 $ 23,269 $ 213,511 $ 155,423 $ 23,205 $ 178,628 The following tables provide other additional information related to operating lease liabilities (dollars in thousands): Year Ended Year Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities — operating cash flows: $ 75,097 $ 69,075 Right-of-use operating lease assets obtained in exchange for operating lease liabilities 441,653 11,262 December 31, 2020 December 31, 2019 Weighted average remaining lease term 6 years 13 years Weighted average discount rate (a) 1.69 % 3.71 % |
Schedule of maturities of operating lease liabilities | The following table provides information related to the maturity of our operating lease liabilities (dollars in thousands): December 31, 2020 Year Purchased Power Lease Contracts Land, Property & Equipment Leases Total 2021 $ 66,658 $ 14,455 $ 81,113 2022 68,325 10,849 79,174 2023 70,033 8,503 78,536 2024 71,784 6,104 77,888 2025 73,578 4,400 77,978 Thereafter 36,760 37,314 74,074 Total lease commitments 387,138 81,625 468,763 Less imputed interest 14,375 18,267 32,642 Total lease liabilities $ 372,763 $ 63,358 $ 436,121 |
Jointly-Owned Facilities (Table
Jointly-Owned Facilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Jointly Owned Utility Plant, Net Ownership Amount [Abstract] | |
APS's interests in jointly-owned facilities recorded on the Consolidated Balance Sheets | The following table shows APS’s interests in those jointly-owned facilities recorded on the Consolidated Balance Sheets at December 31, 2020 (dollars in thousands): Percent Plant in Accumulated Construction Generating facilities: Palo Verde Units 1 and 3 29.1 % $ 1,911,339 $ 1,108,883 $ 26,623 Palo Verde Unit 2 (a) 16.8 % 649,035 379,305 7,268 Palo Verde Common 28.0 % (b) 774,054 320,107 41,607 Palo Verde Sale Leaseback (a) 351,050 253,014 — Four Corners Generating Station 63.0 % 1,621,418 581,436 35,028 Cholla common facilities (c) 50.5 % 193,807 109,447 1,206 Transmission facilities: ANPP 500kV System 33.5 % (b) 131,991 52,626 3,859 Navajo Southern System 26.0 % (b) 89,113 33,536 1,215 Palo Verde — Yuma 500kV System 25.3 % (b) 23,247 6,681 433 Four Corners Switchyards 61.8 % (b) 69,441 17,009 3,145 Phoenix — Mead System 17.1 % (b) 39,437 19,072 73 Palo Verde — Rudd 500kV System 50.0 % 93,123 28,206 1,921 Morgan — Pinnacle Peak System 64.6 % (b) 117,497 20,754 912 Round Valley System 50.0 % 531 174 13 Palo Verde — Morgan System 88.9 % (b) 257,220 20,943 530 Hassayampa — North Gila System 80.0 % 148,067 16,080 — Cholla 500kV Switchyard 85.7 % 7,896 1,850 940 Saguaro 500kV Switchyard 60.0 % 21,669 13,229 2 Kyrene — Knox System 50.0 % 578 323 — (a) See Note 18. (b) Weighted-average of interests. (c) PacifiCorp owns Cholla Unit 4 (see Note 4 for additional information) and APS operates the unit for PacifiCorp. The common facilities at Cholla are jointly-owned. Cholla Unit 4 was retired on December 24, 2020. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of estimated coal take-or-pay commitments | The following table summarizes our estimated coal take-or-pay commitments (dollars in thousands): Years Ended December 31, 2021 2022 2023 2024 2025 Thereafter Coal take-or-pay commitments (a) $ 182,569 $ 183,604 $ 184,540 $ 186,804 $ 177,114 $ 1,024,854 (a) Total take-or-pay commitments are approximately $1.9 billion. The total net present value of these commitments is approximately $1.5 billion. |
Summary of actual take-or-pay commitments | The following table summarizes actual amounts purchased under the coal contracts which include take-or-pay provisions for each of the last three years (dollars in thousands): Year Ended December 31, 2020 2019 2018 Total purchases $ 189,817 $ 204,888 $ 206,093 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Change in asset retirement obligations | The following table shows the change in our asset retirement obligations for 2020 and 2019 (dollars in thousands): 2020 2019 Asset retirement obligations at the beginning of year $ 657,218 $ 726,545 Changes attributable to: Accretion expense 38,652 39,726 Settlements (9,710) (12,591) Estimated cash flow revisions 18,923 (96,462) Asset retirement obligations at the end of year $ 705,083 $ 657,218 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair value of assets and liabilities that are measured at fair value on a recurring basis | The following table presents the fair value at December 31, 2020 of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands): Level 1 Level 2 Level 3 Other Total Assets Risk management activities — derivative instruments: Commodity contracts $ — $ 9,016 $ 4 $ (4,271) (a) $ 4,749 Nuclear decommissioning trust: Equity securities 29,796 — — (17,828) (b) 11,968 U.S. commingled equity funds — — — 610,055 (c) 610,055 U.S. Treasury debt 164,514 — — — 164,514 Corporate debt — 149,509 — — 149,509 Mortgage-backed securities — 99,623 — — 99,623 Municipal bonds — 89,705 — — 89,705 Other fixed income — 13,061 — — 13,061 Subtotal nuclear decommissioning trust 194,310 351,898 — 592,227 1,138,435 Other special use funds: Equity securities 37,337 — — 504 (b) 37,841 U.S. Treasury debt 203,220 — — — 203,220 Municipal bonds — 13,448 — — 13,448 Subtotal other special use funds 240,557 13,448 — 504 254,509 Total assets $ 434,867 $ 374,362 $ 4 $ 588,460 $ 1,397,693 Liabilities Risk management activities — derivative instruments: Commodity contracts $ — $ (20,498) $ (1,107) $ 2,986 (a) $ (18,619) (a) Represents counterparty netting, margin, and collateral (see Note 16). (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. The following table presents the fair value at December 31, 2019 of our assets and liabilities that are measured at fair value on a recurring basis (dollars in thousands): Level 1 Level 2 Level 3 Other Total Assets Risk management activities — derivative instruments: Commodity contracts $ — $ 551 $ 33 $ (69) (a) $ 515 Nuclear decommissioning trust: Equity securities 10,872 — — 2,401 (b) 13,273 U.S. commingled equity funds — — — 518,844 (c) 518,844 U.S. Treasury debt 160,607 — — — 160,607 Corporate debt — 115,869 — — 115,869 Mortgage-backed securities — 118,795 — — 118,795 Municipal bonds — 73,040 — — 73,040 Other fixed income — 10,347 — — 10,347 Subtotal nuclear decommissioning trust 171,479 318,051 — 521,245 1,010,775 Other special use funds: Equity securities 7,142 — — 474 (b) 7,616 U.S. Treasury debt 232,848 — — — 232,848 Municipal bonds — 4,631 — — 4,631 Subtotal other special use funds 239,990 4,631 — 474 245,095 Total assets $ 411,469 $ 323,233 $ 33 $ 521,650 $ 1,256,385 Liabilities Risk management activities — derivative instruments: Commodity contracts $ — $ (67,992) $ (3,429) $ (711) (a) $ (72,132) (a) Represents counterparty netting, margin, and collateral (see Note 16). (b) Represents net pending securities sales and purchases. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per weighted average common share outstanding | The following table presents the calculation of Pinnacle West’s basic and diluted earnings per share (in thousands, except per share amounts): 2020 2019 2018 Net income attributable to common shareholders $ 550,559 $ 538,320 $ 511,047 Weighted average common shares outstanding — basic 112,666 112,443 112,129 Net effect of dilutive securities: Contingently issuable performance shares and restricted stock units 276 315 421 Weighted average common shares outstanding — diluted 112,942 112,758 112,550 Earnings per weighted-average common share outstanding Net income attributable to common shareholders — basic $ 4.89 $ 4.79 $ 4.56 Net income attributable to common shareholders — diluted $ 4.87 $ 4.77 $ 4.54 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Nonvested Restricted Stock, Stock Grants and Stock Units | The following table is a summary of awards granted and the weighted-average grant date fair value for the three years ended 2020, 2019 and 2018: Restricted Stock Units, Stock Grants, and Stock Units (a) Performance Shares (b) 2020 2019 2018 2020 2019 2018 Units granted 118,403 109,106 132,997 122,830 142,874 171,708 Weighted-average grant date fair value $ 71.70 $ 89.15 $ 77.51 $ 104.74 $ 92.16 $ 76.56 (a) Units granted includes awards that will be cash settled of 45,646 in 2020, 48,972 in 2019, and 66,252 in 2018. (b) Reflects the target payout level. The following table is a summary of the status of non-vested awards as of December 31, 2020 and changes during the year: Restricted Stock Units, Stock Grants, and Stock Units Performance Shares Shares Weighted-Average Shares (b) Weighted-Average Nonvested at January 1, 2020 242,612 $ 81.38 306,970 $ 83.65 Granted 118,403 71.70 122,830 104.74 Vested (136,893) 73.80 (161,906) 76.53 Forfeited (c) (3,565) 82.61 (7,890) 85.06 Nonvested at December 31, 2020 220,557 (a) 77.93 260,004 98.28 Vested Awards Outstanding at December 31, 2020 82,921 161,906 (a) Includes 126,996 of awards that will be cash settled. (b) The nonvested performance shares are reflected at target payout level. |
Summary of Nonvested Performance Shares | The following table is a summary of awards granted and the weighted-average grant date fair value for the three years ended 2020, 2019 and 2018: Restricted Stock Units, Stock Grants, and Stock Units (a) Performance Shares (b) 2020 2019 2018 2020 2019 2018 Units granted 118,403 109,106 132,997 122,830 142,874 171,708 Weighted-average grant date fair value $ 71.70 $ 89.15 $ 77.51 $ 104.74 $ 92.16 $ 76.56 (a) Units granted includes awards that will be cash settled of 45,646 in 2020, 48,972 in 2019, and 66,252 in 2018. (b) Reflects the target payout level. The following table is a summary of the status of non-vested awards as of December 31, 2020 and changes during the year: Restricted Stock Units, Stock Grants, and Stock Units Performance Shares Shares Weighted-Average Shares (b) Weighted-Average Nonvested at January 1, 2020 242,612 $ 81.38 306,970 $ 83.65 Granted 118,403 71.70 122,830 104.74 Vested (136,893) 73.80 (161,906) 76.53 Forfeited (c) (3,565) 82.61 (7,890) 85.06 Nonvested at December 31, 2020 220,557 (a) 77.93 260,004 98.28 Vested Awards Outstanding at December 31, 2020 82,921 161,906 (a) Includes 126,996 of awards that will be cash settled. (b) The nonvested performance shares are reflected at target payout level. |
Derivative Accounting (Tables)
Derivative Accounting (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Outstanding gross notional amount of derivatives, which represents both purchases and sales (does not reflect net position) | The following table shows the outstanding gross notional volume of derivatives, which represent both purchases and sales (does not reflect net position): Quantity Commodity Unit of Measure December 31, 2020 December 31, 2019 Power GWh 368 193 Gas Billion cubic feet 205 257 |
Gains and losses from derivative instruments in designated cash flow accounting hedges relationships | The following table provides information about APS’s gains and losses from derivative instruments in designated cash flow accounting hedging relationships (dollars in thousands): Financial Statement Year Ended Commodity Contracts Location 2020 2019 2018 Loss Reclassified from Accumulated OCI into Income (Effective Portion Realized) (a) Fuel and purchased power (b) (763) (1,512) (2,000) (a) During the years ended December 31, 2020, 2019, and 2018, we had no gains or losses reclassified from accumulated OCI to earnings related to discontinued cash flow hedges. (b) Amounts are before the effect of PSA deferrals. |
Gains and losses from derivative instruments not designated as accounting hedges instruments | The following table provides information about gains and losses from derivative instruments not designated as accounting hedging instruments (dollars in thousands): Financial Statement Year Ended Commodity Contracts Location 2020 2019 2018 Net Loss Recognized in Income Operating revenues $ — $ — $ (2,557) Net Loss Recognized in Income Fuel and purchased power (a) (3,178) (84,953) (12,951) Total $ (3,178) $ (84,953) $ (15,508) (a) Amounts are before the effect of PSA deferrals. |
Schedule of the entity's fair value of risk management activities reported on a gross basis and the impacts on offsetting liabilities | The following tables provide information about the fair value of our risk management activities reported on a gross basis and the impacts of offsetting. These amounts relate to commodity contracts and are located in the assets and liabilities from risk management activities lines of our Consolidated Balance Sheets. As of December 31, 2020: Gross Amounts Net Other Amount Current assets $ 5,870 $ (2,939) $ 2,931 $ — $ 2,931 Investments and other assets 3,150 (1,332) 1,818 — 1,818 Total assets 9,020 (4,271) 4,749 — 4,749 Current liabilities (9,211) 2,939 (6,272) (1,285) (7,557) Deferred credits and other (12,394) 1,332 (11,062) — (11,062) Total liabilities (21,605) 4,271 (17,334) (1,285) (18,619) Total $ (12,585) $ — $ (12,585) $ (1,285) $ (13,870) (a) All of our gross recognized derivative instruments were subject to master netting arrangements. (b) No cash collateral has been provided to counterparties, or received from counterparties, that is subject to offsetting. (c) Represents cash collateral that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $1,285. As of December 31, 2019: Gross Recognized Derivatives (a) Amounts Net Recognized Derivatives Other (c) Amount Reported on Balance Sheet Current assets $ 584 $ (474) $ 110 $ 405 $ 515 Current liabilities (38,235) 474 (37,761) (1,185) (38,946) Deferred credits and other (33,186) — (33,186) — (33,186) Total liabilities (71,421) 474 (70,947) (1,185) (72,132) Total $ (70,837) $ — $ (70,837) $ (780) $ (71,617) (a) All of our gross recognized derivative instruments were subject to master netting arrangements. (b) No cash collateral has been provided to counterparties, or received from counterparties, that is subject to offsetting. (c) Represents cash collateral and cash margin that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral and margin posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $1,185 and cash margin provided to counterparties of $405. |
Schedule of the entity's fair value of risk management activities reported on a gross basis and the impacts on offsetting assets | The following tables provide information about the fair value of our risk management activities reported on a gross basis and the impacts of offsetting. These amounts relate to commodity contracts and are located in the assets and liabilities from risk management activities lines of our Consolidated Balance Sheets. As of December 31, 2020: Gross Amounts Net Other Amount Current assets $ 5,870 $ (2,939) $ 2,931 $ — $ 2,931 Investments and other assets 3,150 (1,332) 1,818 — 1,818 Total assets 9,020 (4,271) 4,749 — 4,749 Current liabilities (9,211) 2,939 (6,272) (1,285) (7,557) Deferred credits and other (12,394) 1,332 (11,062) — (11,062) Total liabilities (21,605) 4,271 (17,334) (1,285) (18,619) Total $ (12,585) $ — $ (12,585) $ (1,285) $ (13,870) (a) All of our gross recognized derivative instruments were subject to master netting arrangements. (b) No cash collateral has been provided to counterparties, or received from counterparties, that is subject to offsetting. (c) Represents cash collateral that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $1,285. As of December 31, 2019: Gross Recognized Derivatives (a) Amounts Net Recognized Derivatives Other (c) Amount Reported on Balance Sheet Current assets $ 584 $ (474) $ 110 $ 405 $ 515 Current liabilities (38,235) 474 (37,761) (1,185) (38,946) Deferred credits and other (33,186) — (33,186) — (33,186) Total liabilities (71,421) 474 (70,947) (1,185) (72,132) Total $ (70,837) $ — $ (70,837) $ (780) $ (71,617) (a) All of our gross recognized derivative instruments were subject to master netting arrangements. (b) No cash collateral has been provided to counterparties, or received from counterparties, that is subject to offsetting. (c) Represents cash collateral and cash margin that is not subject to offsetting. Amounts relate to non-derivative instruments, derivatives qualifying for scope exceptions, or collateral and margin posted in excess of the recognized derivative instrument. Includes cash collateral received from counterparties of $1,185 and cash margin provided to counterparties of $405. |
Information about derivative instruments that have credit-risk-related contingent features | The following table provides information about our derivative instruments that have credit-risk-related contingent features (dollars in thousands): December 31, 2020 Aggregate fair value of derivative instruments in a net liability position $ 21,605 Cash collateral posted — Additional cash collateral in the event credit-risk related contingent features were fully triggered (a) 19,510 (a) This amount is after counterparty netting and includes those contracts which qualify for scope exceptions, which are excluded from the derivative details above. |
Other Income and Other Expense
Other Income and Other Expense (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Detail of other income and other expense | The following table provides detail of Pinnacle West’s Consolidated other income and other expense for 2020, 2019 and 2018 (dollars in thousands): 2020 2019 2018 Other income: Interest income $ 12,210 $ 10,377 $ 8,647 Investment gains (losses) — net 2,358 — — Debt return on Four Corners SCR deferral (Note 4) 26,121 19,541 16,153 Debt return on Ocotillo modernization project (Note 4) 15,865 20,282 — Miscellaneous 149 63 96 Total other income $ 56,703 $ 50,263 $ 24,896 Other expense: Non-operating costs $ (12,400) $ (10,663) $ (10,076) Investment gains (losses) — net — (1,835) (417) Miscellaneous (45,376) (a) (5,382) (7,473) Total other expense $ (57,776) $ (17,880) $ (17,966) (a) Miscellaneous includes donation of approximately $10 million to the APS Foundation and approximately $25.2 million related to the CCT plan (see Note 4). The following table provides detail of APS’s other income and other expense for 2020, 2019 and 2018 (dollars in thousands): 2020 2019 2018 Other income: Interest income $ 9,621 $ 6,998 $ 6,496 Debt return on Four Corners SCR deferral (Note 4) 26,121 19,541 16,153 Debt return on Ocotillo modernization project (Note 4) 15,865 20,282 — Miscellaneous 148 63 97 Total other income $ 51,755 $ 46,884 $ 22,746 Other expense: Non-operating costs $ (10,659) $ (9,612) $ (9,462) Miscellaneous (43,035) (a) (3,378) (5,830) Total other expense $ (53,694) $ (12,990) $ (15,292) |
Palo Verde Sale Leaseback Var_2
Palo Verde Sale Leaseback Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Variable Interest Entities [Abstract] | |
Amounts relating to the VIEs included in Consolidated Balance Sheets | Our Consolidated Balance Sheets include the following amounts relating to the VIEs (dollars in thousands): December 31, 2020 December 31, 2019 Palo Verde sale leaseback property, plant and equipment, net of accumulated depreciation $ 98,036 $ 101,906 Equity-Noncontrolling interests 119,290 122,540 |
Investments in Nuclear Decomm_2
Investments in Nuclear Decommissioning Trusts and Other Special Use Funds (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Fair value of APS's nuclear decommissioning trust fund assets | The following tables present the unrealized gains and losses based on the original cost of the investment and summarizes the fair value of APS’s nuclear decommissioning trust and other special use fund assets at December 31, 2020 and December 31, 2019 (dollars in thousands): December 31, 2020 Fair Value Total Total Investment Type: Nuclear Decommissioning Trusts Other Special Use Funds Total Equity Securities $ 639,851 $ 37,337 $ 677,188 $ 421,666 $ — Available for Sale-Fixed Income Securities 516,412 216,668 733,080 (a) 46,581 (398) Other (17,828) 504 (17,324) (b) — — Total $ 1,138,435 $ 254,509 $ 1,392,944 $ 468,247 $ (398) (a) As of December 31, 2020, the amortized cost basis of these available-for-sale investments is $687 million. (b) Represents net pending securities sales and purchases. December 31, 2019 Fair Value Total Total Investment Type: Nuclear Decommissioning Trusts Other Special Use Funds Total Equity Securities $ 529,716 $ 7,142 $ 536,858 $ 337,681 $ — Available for Sale-Fixed Income Securities 478,658 237,479 716,137 (a) 25,795 (669) Other 2,401 474 2,875 (b) — — Total $ 1,010,775 $ 245,095 $ 1,255,870 $ 363,476 $ (669) (a) As of December 31, 2019, the amortized cost basis of these available-for-sale investments is $691 million. (b) Represents net pending securities sales and purchases. |
Realized gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds | The following table sets forth APS’s realized gains and losses relating to the sale and maturity of available-for-sale debt securities and equity securities, and the proceeds from the sale and maturity of these investment securities for the years ended December 31, 2020, 2019 and 2018 (dollars in thousands): Year Ended December 31, Nuclear Decommissioning Trusts Other Special Use Funds Total 2020 Realized gains $ 12,194 $ 176 $ 12,370 Realized losses (5,553) (15) (5,568) Proceeds from the sale of securities (a) 675,035 144,484 819,519 2019 Realized gains 11,024 108 11,132 Realized losses (6,972) — (6,972) Proceeds from the sale of securities (a) 473,806 245,228 719,034 2018 Realized gains 6,679 1 6,680 Realized losses (13,552) — (13,552) Proceeds from the sale of securities (a) 554,385 98,648 653,033 (a) Proceeds are reinvested in the nuclear decommissioning trusts or other special use funds, excluding amounts reimbursed to the Company for active union employee medical claims from the active union trust. |
Fair value of fixed income securities, summarized by contractual maturities | The fair value of fixed income securities, summarized by contractual maturities, at December 31, 2020 is as follows (dollars in thousands): Nuclear Decommissioning Trusts Coal Reclamation Escrow Account Active Union Medical Trust Total Less than one year $ 19,563 $ 33,079 $ — $ 52,642 1 year – 5 years 151,537 29,722 142,311 323,570 5 years – 10 years 133,307 2,738 — 136,045 Greater than 10 years 212,005 8,818 — 220,823 Total $ 516,412 $ 74,357 $ 142,311 $ 733,080 |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of changes in accumulated other comprehensive loss including reclassification adjustments, by component | The following table shows the changes in Pinnacle West’s consolidated accumulated other comprehensive loss, including reclassification adjustments, net of tax, by component for the years ended December 31, 2020 and 2019 (dollars in thousands): Pension and Other Postretirement Benefits Derivative Instruments Total Balance at December 31, 2018 $ (45,997) $ (1,711) $ (47,708) OCI (loss) before reclassifications (14,041) — (14,041) Amounts reclassified from accumulated other comprehensive loss 3,516 (a) 1,137 (b) 4,653 Balance at December 31, 2019 (56,522) (574) (57,096) OCI (loss) before reclassifications (8,370) (2,089) (10,459) Amounts reclassified from accumulated other comprehensive loss 4,167 (a) 592 (b) 4,759 Balance at December 31, 2020 $ (60,725) $ (2,071) $ (62,796) (a) These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost (see Note 8). (b) These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA (see Note 16). The following table shows the changes in APS’s consolidated accumulated other comprehensive loss, including reclassification adjustments, net of tax, by component for the years ended December 31, 2020 and 2019 (dollars in thousands): Pension and Other Postretirement Benefits Derivative Instruments Total Balance at December 31, 2018 $ (25,396) $ (1,711) $ (27,107) OCI (loss) before reclassifications (12,572) — (12,572) Amounts reclassified from accumulated other comprehensive loss 3,020 (a) 1,137 (b) 4,157 Balance at December 31, 2019 (34,948) (574) (35,522) OCI (loss) before reclassifications (9,568) (18) (9,586) Amounts reclassified from accumulated other comprehensive loss 3,598 (a) 592 (b) 4,190 Balance at December 31, 2020 $ (40,918) $ — $ (40,918) (a) These amounts primarily represent amortization of actuarial loss, and are included in the computation of net periodic pension cost (see Note 8). (b) These amounts represent realized gains and losses and are included in the computation of fuel and purchased power costs and are subject to the PSA (see Note 16). |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | 36 Months Ended | ||
May 31, 2014$ / kWh | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)$ / sharesshares | |
Approximate remaining average useful lives of utility property | |||||
Depreciation | $ 553 | $ 522 | $ 486 | ||
Depreciation rates (as a percent) | 2.84% | 2.81% | 2.81% | ||
Allowance for Funds Used During Construction | |||||
Composite rate used to calculate AFUDC (as a percent) | 6.72% | 6.98% | 7.03% | ||
Income Taxes | |||||
Percent likelihood largest tax benefit amount is realized (greater than) | 50.00% | ||||
Intangible Assets | |||||
Amortization expense | $ 70 | $ 66 | $ 68 | ||
Estimated amortization expense on existing intangible assets over the next five years | |||||
2021 | 68 | $ 68 | |||
2022 | 56 | 56 | |||
2023 | 48 | 48 | |||
2024 | 33 | 33 | |||
2025 | $ 25 | $ 25 | |||
Remaining amortization period for intangible assets | 7 years | ||||
Pinnacle West | |||||
Preferred Stock | |||||
Preferred stock, shares authorized (in shares) | shares | 10,000,000 | 10,000,000 | |||
ARIZONA PUBLIC SERVICE COMPANY | |||||
Nuclear Fuel | |||||
Charges for the permanent disposal of spent nuclear fuel (in dollars per kWh) | $ / kWh | 0.001 | ||||
Preferred Stock | |||||
Preferred stock, shares authorized (in shares) | shares | 15,535,000 | 15,535,000 | |||
Preferred stock par or stated value per share 1 (in dollars per share) | $ / shares | $ 25 | $ 25 | |||
Preferred stock par or stated value per share 2 (in dollars per share) | $ / shares | 50 | 50 | |||
Preferred stock par or stated value per share 3 (in dollars per share) | $ / shares | $ 100 | $ 100 | |||
Minimum | |||||
Approximate remaining average useful lives of utility property | |||||
Depreciation rates (as a percent) | 0.18% | ||||
Maximum | |||||
Approximate remaining average useful lives of utility property | |||||
Depreciation rates (as a percent) | 32.43% | ||||
Investments | |||||
Ownership percentage for classification as cost method investments by El Dorado | 20.00% | ||||
Fossil Plant | |||||
Approximate remaining average useful lives of utility property | |||||
Average useful life | 17 years | ||||
Nuclear plant | |||||
Approximate remaining average useful lives of utility property | |||||
Average useful life | 20 years | ||||
Other Generation | |||||
Approximate remaining average useful lives of utility property | |||||
Average useful life | 20 years | ||||
Transmission | |||||
Approximate remaining average useful lives of utility property | |||||
Average useful life | 38 years | ||||
Distribution | |||||
Approximate remaining average useful lives of utility property | |||||
Average useful life | 34 years | ||||
General plant | |||||
Approximate remaining average useful lives of utility property | |||||
Average useful life | 7 years | ||||
El Paso's Interest in Four Corners | 4CA | |||||
Utility Plant and Depreciation [Line Items] | |||||
Ownership interest acquired (as a percent) | 7.00% | 7.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Utility Plant and Depreciation [Line Items] | ||
Net | $ 13,727,575 | $ 13,198,435 |
Construction work in progress | 937,384 | 808,133 |
Intangible assets, net of accumulated amortization | 282,570 | 290,564 |
Nuclear fuel, net of accumulated amortization | 113,645 | 123,500 |
Total property, plant and equipment | 15,159,210 | 14,522,538 |
Electric Service | ||
Utility Plant and Depreciation [Line Items] | ||
Generation | 9,199,012 | 8,916,872 |
Transmission | 3,290,477 | 3,095,907 |
Distribution | 7,107,007 | 6,690,697 |
General plant | 1,241,389 | 1,132,816 |
Plant in service and held for future use | 20,837,885 | 19,836,292 |
Accumulated depreciation and amortization | (7,110,310) | (6,637,857) |
Net | 13,727,575 | 13,198,435 |
Construction work in progress | 937,384 | 808,133 |
Intangible assets, net of accumulated amortization | 282,570 | 290,564 |
Nuclear fuel, net of accumulated amortization | 113,645 | 123,500 |
Total property, plant and equipment | 15,159,210 | 14,522,538 |
Electric Service | Variable Interest Entity | ||
Utility Plant and Depreciation [Line Items] | ||
Total property, plant and equipment | $ 98,036 | $ 101,906 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash and Cash Equivalents [Line Items] | |||
Income taxes, net of refunds | $ (3,019) | $ 12,535 | $ 21,173 |
Interest, net of amounts capitalized | 216,951 | 218,664 | 208,479 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |||
Accrued capital expenditures | 113,502 | 141,297 | 132,620 |
Dividends declared but not paid | 93,531 | 87,982 | 82,675 |
Sale of 4CA 7% interest in Four Corners | $ 0 | 0 | 68,907 |
4CA | El Paso's Interest in Four Corners | |||
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |||
Ownership interest acquired (as a percent) | 7.00% | ||
ARIZONA PUBLIC SERVICE COMPANY | |||
Cash and Cash Equivalents [Line Items] | |||
Income taxes, net of refunds | $ 41,176 | (15,042) | 77,942 |
Interest, net of amounts capitalized | 206,328 | 204,261 | 196,419 |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |||
Accrued capital expenditures | 113,502 | 141,297 | 132,620 |
Dividends declared but not paid | $ 93,500 | $ 88,000 | $ 82,700 |
Revenue - Sources of Revenue (D
Revenue - Sources of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Total Operating Revenues | $ 3,586,982 | $ 3,471,209 | $ 3,691,247 |
Retail Electric Service | Retail residential | |||
Disaggregation of Revenue [Line Items] | |||
Total Operating Revenues | 1,929,178 | 1,761,122 | 1,867,370 |
Retail Electric Service | Retail non-residential | |||
Disaggregation of Revenue [Line Items] | |||
Total Operating Revenues | 1,486,098 | 1,509,514 | 1,628,891 |
Retail Electric Service | Wholesale | |||
Disaggregation of Revenue [Line Items] | |||
Total Operating Revenues | 93,345 | 121,805 | 109,198 |
Transmission Services for Others | |||
Disaggregation of Revenue [Line Items] | |||
Total Operating Revenues | 65,859 | 62,460 | 60,261 |
Other Sources | |||
Disaggregation of Revenue [Line Items] | |||
Total Operating Revenues | $ 12,502 | $ 16,308 | $ 25,527 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Operating revenues | $ 3,586,982 | $ 3,471,209 | $ 3,691,247 |
Regulatory cost recovery revenue | 54,000 | 56,000 | 47,000 |
Electric and Transmission Service | |||
Disaggregation of Revenue [Line Items] | |||
Operating revenues | 3,533,000 | 3,415,000 | 3,644,000 |
Retail Electric Service | Retail residential | |||
Disaggregation of Revenue [Line Items] | |||
Operating revenues | 1,929,178 | $ 1,761,122 | $ 1,867,370 |
Retail Electric Service | Arizona Attorney General Settlement | Retail residential | |||
Disaggregation of Revenue [Line Items] | |||
Operating revenues | $ (24,000) |
Revenue - Allowance for Doubtfu
Revenue - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for doubtful accounts, balance at beginning of period | $ 8,171 | $ 4,069 | $ 2,513 | |
Bad debt expense | 20,633 | 11,819 | 10,870 | |
Actual write-offs | (9,022) | (7,717) | (9,314) | |
Allowance for doubtful accounts, balance at end of period | $ 8,171 | $ 4,069 | $ 2,513 | $ 19,782 |
Regulatory Matters - Regulatory
Regulatory Matters - Regulatory Matters - COVID-19 (Details) - ARIZONA PUBLIC SERVICE COMPANY - USD ($) | Jan. 21, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | May 05, 2020 |
Public Utilities, General Disclosures [Line Items] | ||||
Demand side management funds | $ 36,000,000 | |||
Customer credits | $ 43,000,000 | $ 43,000,000 | ||
Customer credits, additional funds | 7,000,000 | 7,000,000 | ||
Voluntary funds | 15,000,000 | 15,000,000 | ||
Customer COVID assistance | 12,400,000 | 12,400,000 | ||
Non-customer funds | 8,800,000 | 8,800,000 | ||
Bill credits for limited income customers | $ 3,600,000 | 3,600,000 | ||
Threshold percentage for deferral of potential recovery | 50.00% | |||
Threshold for deferral of potential recovery | $ 2,500,000 | 2,500,000 | ||
Customer support fund, bill credit | 100 | 100 | ||
Expanded credit for limited income customers | 300 | 300 | ||
Customer assistance, small customers, bill credit | 1,000 | 1,000 | ||
Additional bill credit for delinquent limited income customers | 250 | 250 | ||
Customer support fund, non-profits and community organizations | $ 2,700,000 | 2,700,000 | ||
Damage from Fire, Explosion or Other Hazard | ||||
Public Utilities, General Disclosures [Line Items] | ||||
Negative impact on operating results | $ 23,000,000 | |||
Damage from Fire, Explosion or Other Hazard | Subsequent Event | ||||
Public Utilities, General Disclosures [Line Items] | ||||
Customer support fund, payment period | 8 months | |||
Past due balance threshold qualifying for payment extension | $ 75 |
Regulatory Matters - Retail Rat
Regulatory Matters - Retail Rate Case Filing (Details) | Nov. 06, 2020USD ($) | Oct. 31, 2019USD ($)$ / kWhGW | Jun. 30, 2019USD ($) | Aug. 13, 2018USD ($) | Jan. 08, 2018USD ($) | Mar. 27, 2017USD ($)$ / kWh | Dec. 31, 2020USD ($) | Oct. 02, 2020USD ($) |
ACC | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Increase (decrease) in revenue | $ (169,000,000) | $ (89,700,000) | ||||||
Average percentage annual customer bill increase | (5.14%) | (2.70%) | ||||||
Recommended return on equity, percentage | 10.00% | 9.40% | ||||||
Alternative, percentage | 0.30% | |||||||
Increment of fair value rate, percentage | 0.80% | 0.00% | ||||||
Residential Utility Consumer Office | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Increase (decrease) in revenue | $ 20,800,000 | |||||||
Average percentage annual customer bill increase | 0.63% | |||||||
Recommended return on equity, percentage | 8.74% | |||||||
Increment of fair value rate, percentage | 0.00% | |||||||
ACC | ARIZONA PUBLIC SERVICE COMPANY | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Requested rate increase for tax act | $ 184,000,000 | $ (86,500,000) | $ (119,100,000) | |||||
Retail Rate Case Filing with Arizona Corporation Commission | ACC | ARIZONA PUBLIC SERVICE COMPANY | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Base rate decrease, elimination of tax expense adjustment mechanism | $ 115,000,000 | |||||||
Approximate percentage of increase in average customer bill | 5.60% | 3.28% | ||||||
Approximate percentage of increase in average residential customer bill | 5.40% | 4.54% | ||||||
Rate matter, cost base rate | $ 8,870,000,000 | |||||||
Base fuel rate (in dollars per kWh) | $ / kWh | 0.030168 | |||||||
Rate matter, funding limited income crisis bill program | $ 1,250,000 | |||||||
Commercial customers, market pricing, threshold | GW | 200 | |||||||
Settlement agreement, net retail base rate increase | $ 94,600,000 | |||||||
Settlement agreement, non-fuel, non-depreciation, base rate increase | 87,200,000 | |||||||
Fuel-related base rate decrease | 53,600,000 | |||||||
Base rate increase, changes in depreciation schedules | $ 61,000,000 | |||||||
Authorized return on common equity (as a percent) | 10.00% | |||||||
Percentage of debt in capital structure | 44.20% | |||||||
Percentage of common equity in capital structure | 55.80% | |||||||
Resource comparison proxy for exported energy (in dollars per kWh) | $ / kWh | 0.129 | |||||||
AZ Sun II Program | Retail Rate Case Filing with Arizona Corporation Commission | ACC | ARIZONA PUBLIC SERVICE COMPANY | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Minimum annual renewable energy standard and tariff | $ 10,000,000 | |||||||
Maximum annual renewable energy standard and tariff | $ 15,000,000 | |||||||
Coal Community Transition Plan | ACC | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Amount funded by customers | $ 100,000,000 | |||||||
Amount funded by customers, term | 10 years | |||||||
Amount funded by shareholders | $ 25,000,000 | $ 25,200,000 | ||||||
Coal Community Transition Plan | ACC | Navajo Nation, Economic Development Organization | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Amount funded by shareholders, term | 5 years | |||||||
Amount funded by shareholders | $ 1,250,000 | |||||||
Coal Community Transition Plan | ACC | Navajo Nation, Electrification Projects | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Amount funded by customers | 10,000,000 | |||||||
Amount funded by shareholders | 10,000,000 | $ 10,000,000 | ||||||
Coal Community Transition Plan | ACC | Navajo Nation, Transmission Revenue Sharing | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Amount funded by shareholders | 2,500,000 | |||||||
Coal Community Transition Plan | ACC | Navajo County Communities, Cholla Power Plant Closure | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Amount funded by customers | $ 12,000,000 | |||||||
Amount funded by customers, term | 5 years | |||||||
Coal Community Transition Plan | ACC | Navajo Nation, Generation Station | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Amount funded by customers | $ 3,700,000 | |||||||
Minimum | ACC | ARIZONA PUBLIC SERVICE COMPANY | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Regulatory impact, operating results | $ 69,000,000 | |||||||
Minimum | Retail Rate Case Filing with Arizona Corporation Commission | ACC | ARIZONA PUBLIC SERVICE COMPANY | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Environmental surcharge cap rate (in dollars per kWh) | $ / kWh | 0.00016 | |||||||
Maximum | Retail Rate Case Filing with Arizona Corporation Commission | ACC | ARIZONA PUBLIC SERVICE COMPANY | ||||||||
Public Utilities, General Disclosures [Line Items] | ||||||||
Environmental surcharge cap rate (in dollars per kWh) | $ / kWh | 0.00050 |
Regulatory Matters - Capital St
Regulatory Matters - Capital Structure and Costs of Capital (Details) | Oct. 31, 2019 |
Cost of Capital | |
Long-term debt | 4.10% |
Common stock equity | 10.15% |
Weighted-average cost of capital | 7.41% |
Retail Rate Case Filing with Arizona Corporation Commission | ARIZONA PUBLIC SERVICE COMPANY | |
Capital Structure | |
Common stock equity | 54.70% |
Retail Rate Case Filing with Arizona Corporation Commission | ACC | ARIZONA PUBLIC SERVICE COMPANY | |
Capital Structure | |
Long-term debt | 45.30% |
Regulatory Matters - Additional
Regulatory Matters - Additional Information (Details) | Oct. 01, 2021$ / kWh | Feb. 22, 2021USD ($) | Feb. 15, 2021USD ($) | Feb. 01, 2021USD ($)$ / kWh | Aug. 20, 2020USD ($)Customer | Jun. 01, 2020USD ($) | May 01, 2020$ / kWh | Feb. 14, 2020USD ($) | Feb. 01, 2020$ / kWh | Nov. 14, 2019USD ($)Customer | Oct. 31, 2019USD ($) | Oct. 29, 2019USD ($) | Jun. 01, 2019USD ($) | May 01, 2019$ / kWh | Apr. 10, 2019 | Feb. 15, 2019USD ($) | Feb. 01, 2019$ / kWh | Aug. 13, 2018USD ($) | Jun. 01, 2018USD ($) | May 01, 2018$ / kWh | Feb. 15, 2018USD ($) | Feb. 01, 2018$ / kWh | Jan. 08, 2018USD ($) | Nov. 20, 2017USD ($) | Dec. 20, 2016$ / kWh | Dec. 31, 2020USD ($)programMW | Dec. 31, 2017$ / kWh | Jul. 01, 2020USD ($) | May 15, 2020USD ($) | May 05, 2020USD ($) | Dec. 31, 2019USD ($) | Jul. 01, 2019USD ($) | Mar. 15, 2019agreement | Dec. 31, 2018USD ($) | Jun. 29, 2018USD ($) | Nov. 14, 2017USD ($) | Sep. 01, 2017USD ($) |
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of customers | Customer | 3,800 | 13,000 | |||||||||||||||||||||||||||||||||||
Inconvenience payment | $ 25 | $ 25 | |||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Demand side management funds | $ 36,000,000 | ||||||||||||||||||||||||||||||||||||
Customer credits | $ 43,000,000 | ||||||||||||||||||||||||||||||||||||
Customer credits, additional funds | 7,000,000 | ||||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | Damage from Fire, Explosion or Other Hazard | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Pre-tax income | $ (23,000,000) | ||||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | Lost Fixed Cost Recovery Mechanism | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Fixed costs recoverable per power lost (in dollars per kWh) | $ / kWh | 0.025 | ||||||||||||||||||||||||||||||||||||
Rate matter cap percentage of retail revenue | 1.00% | ||||||||||||||||||||||||||||||||||||
Amount of adjustment approved representing prorated sales losses pending approval | $ 26,600,000 | $ 36,200,000 | $ 60,700,000 | ||||||||||||||||||||||||||||||||||
Decrease in amount of adjustment representing prorated sales losses | $ 9,600,000 | $ 24,500,000 | |||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ACC | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Program term | 18 years | ||||||||||||||||||||||||||||||||||||
Requested rate decrease for tax act | $ (184,000,000) | $ 86,500,000 | $ 119,100,000 | ||||||||||||||||||||||||||||||||||
Requested rate increase (decrease), deferred taxes amortization, period | 28 years 6 months | ||||||||||||||||||||||||||||||||||||
Requested rate increase (decrease), amount, one-time bill credit | $ 64,000,000 | ||||||||||||||||||||||||||||||||||||
Requested rate increase (decrease), amount, one-time bill credit, additional benefit | $ 39,500,000 | ||||||||||||||||||||||||||||||||||||
Number of public utility programs | program | 2 | ||||||||||||||||||||||||||||||||||||
Solar power capacity | MW | 80 | ||||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ACC | Arizona Renewable Energy Standard and Tariff 2018 | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 84,700,000 | $ 86,300,000 | $ 89,900,000 | ||||||||||||||||||||||||||||||||||
Request to meet revenue requirements | $ 4,500,000 | ||||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ACC | Demand Side Management Adjustor Charge 2018 | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 52,600,000 | $ 52,600,000 | |||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ACC | Power Supply Adjustor (PSA) | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
PSA rate (in dollars per kWh) | $ / kWh | (0.000456) | 0.001658 | 0.004555 | ||||||||||||||||||||||||||||||||||
Forward component of PSA rate (in dollars per kWh) | $ / kWh | (0.002086) | 0.000536 | |||||||||||||||||||||||||||||||||||
Historical component of PSA rate (in dollars per kWh) | $ / kWh | 0.001630 | 0.001122 | |||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ACC | Net Metering | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Cost of service, resource comparison proxy method, maximum annual percentage decrease | 10.00% | ||||||||||||||||||||||||||||||||||||
Cost of service for interconnected DG system customers, grandfathered period | 20 years | ||||||||||||||||||||||||||||||||||||
Guaranteed export price period | 10 years | ||||||||||||||||||||||||||||||||||||
Settlement agreement, energy price for exported energy (in dollars per kWh) | $ / kWh | 0.129 | ||||||||||||||||||||||||||||||||||||
Request second-year energy price for exported energy | $ / kWh | 0.094 | 0.105 | 0.116 | ||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ACC | Arizona Renewable Energy Standard and Tariff | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Plan term | 5 years | ||||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ACC | Demand Side Management Adjustor Charge 2019 | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 34,100,000 | ||||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ACC | Demand Side Management Adjustor Charge 2020 | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 51,900,000 | $ 51,900,000 | |||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ACC | Demand Side Management Adjustor Charge 2021 | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 63,700,000 | ||||||||||||||||||||||||||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | FERC | Transmission rates, transmission cost adjustor and other transmission matters | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Rate matters, increase (decrease) in cost recovery | $ (6,100,000) | $ 25,800,000 | $ (22,700,000) | ||||||||||||||||||||||||||||||||||
Rate matters, increase (decrease) in cost recovery, retail customer rates | $ 10,900,000 | $ 4,700,000 | $ (26,900,000) | ||||||||||||||||||||||||||||||||||
Cost Recovery Mechanisms | ARIZONA PUBLIC SERVICE COMPANY | ACC | Power Supply Adjustor (PSA) | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Maximum increase decrease in PSA rate (in dollars per kWh) | $ / kWh | 0.004 | ||||||||||||||||||||||||||||||||||||
PSA rate in prior years (in dollars per kWh) | $ / kWh | (0.002115) | (0.002897) | |||||||||||||||||||||||||||||||||||
Number of agreements | agreement | 2 | ||||||||||||||||||||||||||||||||||||
Solar Communities | ARIZONA PUBLIC SERVICE COMPANY | ACC | Arizona Renewable Energy Standard and Tariff 2018 | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Program term | 3 years | ||||||||||||||||||||||||||||||||||||
Minimum | ARIZONA PUBLIC SERVICE COMPANY | ACC | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Regulatory impact, operating results | $ 69,000,000 | ||||||||||||||||||||||||||||||||||||
Minimum | Solar Communities | ARIZONA PUBLIC SERVICE COMPANY | ACC | Arizona Renewable Energy Standard and Tariff 2018 | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Required annual capital investment | $ 10,000,000 | ||||||||||||||||||||||||||||||||||||
Maximum | Solar Communities | ARIZONA PUBLIC SERVICE COMPANY | ACC | Arizona Renewable Energy Standard and Tariff 2018 | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Required annual capital investment | $ 15,000,000 | ||||||||||||||||||||||||||||||||||||
Subsequent Event | ARIZONA PUBLIC SERVICE COMPANY | 2017 Settlement Agreement and its Customer Education and Outreach Plan | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Settlement amount | $ 24,750,000 | ||||||||||||||||||||||||||||||||||||
Settlement amount returned to customers | $ 24,000,000 | ||||||||||||||||||||||||||||||||||||
Subsequent Event | ARIZONA PUBLIC SERVICE COMPANY | Lost Fixed Cost Recovery Mechanism | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Amount of adjustment approved representing prorated sales losses pending approval | $ 38,500,000 | ||||||||||||||||||||||||||||||||||||
Decrease in amount of adjustment representing prorated sales losses | $ 11,800,000 | ||||||||||||||||||||||||||||||||||||
Subsequent Event | ARIZONA PUBLIC SERVICE COMPANY | FERC | Environmental Improvement Surcharge | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Rate matters, increase (decrease) in cost recovery | $ 10,300,000 | ||||||||||||||||||||||||||||||||||||
Rate matters, increase (decrease) in cost recovery, excess of annual amount | $ 1,500,000 | ||||||||||||||||||||||||||||||||||||
Forecast | ARIZONA PUBLIC SERVICE COMPANY | ACC | Power Supply Adjustor (PSA) | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
PSA rate (in dollars per kWh) | $ / kWh | 0.003544 | ||||||||||||||||||||||||||||||||||||
Forward component of PSA rate (in dollars per kWh) | $ / kWh | 0.003434 | ||||||||||||||||||||||||||||||||||||
Historical component of PSA rate (in dollars per kWh) | $ / kWh | 0.000110 | ||||||||||||||||||||||||||||||||||||
Forecast | ARIZONA PUBLIC SERVICE COMPANY | ACC | Net Metering | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
Request second-year energy price for exported energy | $ / kWh | 0.105 | ||||||||||||||||||||||||||||||||||||
Forecast | Cost Recovery Mechanisms | ARIZONA PUBLIC SERVICE COMPANY | ACC | Power Supply Adjustor (PSA) | |||||||||||||||||||||||||||||||||||||
Regulatory Matters [Line Items] | |||||||||||||||||||||||||||||||||||||
PSA rate in prior years (in dollars per kWh) | $ / kWh | 0.004 |
Regulatory Matters - Deferred F
Regulatory Matters - Deferred Fuel and Purchased Power Regulatory Asset (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Change in regulatory asset | |||
Deferred fuel and purchased power costs — current period | $ 93,651 | $ 82,481 | $ 78,277 |
Amounts refunded/(charged) to customers | 12,047 | (49,508) | (116,750) |
ARIZONA PUBLIC SERVICE COMPANY | |||
Change in regulatory asset | |||
Deferred fuel and purchased power costs — current period | 93,651 | 82,481 | 78,277 |
Amounts refunded/(charged) to customers | 12,047 | (49,508) | (116,750) |
ACC | ARIZONA PUBLIC SERVICE COMPANY | Power Supply Adjustor (PSA) | |||
Change in regulatory asset | |||
Beginning balance | 70,137 | 37,164 | |
Deferred fuel and purchased power costs — current period | 93,651 | 82,481 | |
Amounts refunded/(charged) to customers | 12,047 | (49,508) | |
Ending balance | $ 175,835 | $ 70,137 | $ 37,164 |
Regulatory Matters - Four Corne
Regulatory Matters - Four Corners, Cholla and Navajo Plant (Details) - ARIZONA PUBLIC SERVICE COMPANY - USD ($) $ in Millions | 1 Months Ended | ||
Sep. 30, 2018 | Apr. 30, 2018 | Dec. 31, 2020 | |
Retired power plant costs | |||
Acquisition | |||
Regulatory asset, net book value | $ 57 | ||
Navajo plant | |||
Acquisition | |||
Regulatory asset, net book value | 72 | ||
Navajo plant, coal reclamation regulatory asset | |||
Acquisition | |||
Regulatory asset, net book value | $ 18 | ||
Four Corners Units 4 and 5 | SCE | |||
Acquisition | |||
Settlement agreement, ACC approved rate adjustment, annualized customer impact | $ 58.5 | $ 67.5 |
Regulatory Matters - Schedule o
Regulatory Matters - Schedule of Regulatory Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Detail of regulatory assets | ||
Regulatory assets, current | $ 291,713 | $ 203,207 |
Regulatory assets, non-current | 1,133,987 | 1,304,073 |
Pension | ||
Detail of regulatory assets | ||
Regulatory assets, current | 0 | 0 |
Regulatory assets, non-current | 469,953 | 660,223 |
Deferred fuel and purchased power | ||
Detail of regulatory assets | ||
Regulatory assets, current | 175,835 | 70,137 |
Regulatory assets, non-current | 0 | 0 |
Income taxes — AFUDC equity | ||
Detail of regulatory assets | ||
Regulatory assets, current | 7,169 | 6,800 |
Regulatory assets, non-current | 158,776 | 154,974 |
Retired power plant costs | ||
Detail of regulatory assets | ||
Regulatory assets, current | 28,181 | 28,182 |
Regulatory assets, non-current | 114,214 | 142,503 |
Ocotillo deferral | ||
Detail of regulatory assets | ||
Regulatory assets, current | 0 | 0 |
Regulatory assets, non-current | 95,723 | 38,144 |
SCR deferral | ||
Detail of regulatory assets | ||
Regulatory assets, current | 0 | 0 |
Regulatory assets, non-current | 81,307 | 52,644 |
Deferred property taxes | ||
Detail of regulatory assets | ||
Regulatory assets, current | 8,569 | 8,569 |
Regulatory assets, non-current | 49,626 | 58,196 |
Lost fixed cost recovery | ||
Detail of regulatory assets | ||
Regulatory assets, current | 41,807 | 26,067 |
Regulatory assets, non-current | 0 | 0 |
Deferred compensation | ||
Detail of regulatory assets | ||
Regulatory assets, current | 0 | 0 |
Regulatory assets, non-current | 36,195 | 36,464 |
Four Corners cost deferral | ||
Detail of regulatory assets | ||
Regulatory assets, current | 8,077 | 8,077 |
Regulatory assets, non-current | 24,075 | 32,152 |
Income taxes — investment tax credit basis adjustment | ||
Detail of regulatory assets | ||
Regulatory assets, current | 1,113 | 1,098 |
Regulatory assets, non-current | 24,291 | 24,981 |
Palo Verde VIE | ||
Detail of regulatory assets | ||
Regulatory assets, current | 0 | 0 |
Regulatory assets, non-current | 21,255 | 20,635 |
Coal reclamation | ||
Detail of regulatory assets | ||
Regulatory assets, current | 1,068 | 1,546 |
Regulatory assets, non-current | 16,999 | 17,688 |
Deferred fuel and purchased power - mark-to-market | ||
Detail of regulatory assets | ||
Regulatory assets, current | 3,341 | 36,887 |
Regulatory assets, non-current | 9,244 | 33,185 |
Loss on reacquired debt | ||
Detail of regulatory assets | ||
Regulatory assets, current | 1,689 | 1,637 |
Regulatory assets, non-current | 10,877 | 12,031 |
Mead-Phoenix transmission line — contributions in aid of construction | ||
Detail of regulatory assets | ||
Regulatory assets, current | 332 | 332 |
Regulatory assets, non-current | 9,380 | 9,712 |
Demand side management | ||
Detail of regulatory assets | ||
Regulatory assets, current | 0 | 0 |
Regulatory assets, non-current | 7,268 | 0 |
Tax expense adjustor mechanism | ||
Detail of regulatory assets | ||
Regulatory assets, current | 6,226 | 1,612 |
Regulatory assets, non-current | 0 | 0 |
Tax expense of Medicare subsidy | ||
Detail of regulatory assets | ||
Regulatory assets, current | 1,235 | 1,235 |
Regulatory assets, non-current | 3,704 | 4,940 |
PSA interest | ||
Detail of regulatory assets | ||
Regulatory assets, current | 4,355 | 1,917 |
Regulatory assets, non-current | 0 | 0 |
TCA balancing account | ||
Detail of regulatory assets | ||
Regulatory assets, current | 0 | 6,324 |
Regulatory assets, non-current | 0 | 2,885 |
Other | ||
Detail of regulatory assets | ||
Regulatory assets, current | 2,716 | 2,787 |
Regulatory assets, non-current | $ 1,100 | $ 2,716 |
Regulatory Matters - Schedule_2
Regulatory Matters - Schedule of Regulatory Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Detail of regulatory liabilities | |||
Regulatory liabilities, current | $ 229,088 | $ 234,912 | |
Regulatory liabilities, non-current | 2,450,169 | 2,267,835 | |
Asset retirement obligations | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 0 | 0 | |
Regulatory liabilities, non-current | 506,049 | 418,423 | |
Other postretirement benefits | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 37,705 | 37,575 | |
Regulatory liabilities, non-current | 349,588 | 139,634 | |
Removal costs | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 52,844 | 47,356 | |
Regulatory liabilities, non-current | 103,008 | 136,072 | |
Income taxes — change in rates | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 2,839 | 2,797 | |
Regulatory liabilities, non-current | 66,553 | 68,265 | |
Four Corners coal reclamation | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 5,460 | 1,059 | |
Regulatory liabilities, non-current | 49,435 | 51,704 | |
Spent nuclear fuel | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 6,768 | 6,676 | |
Regulatory liabilities, non-current | 44,221 | 51,019 | |
Income taxes — deferred investment tax credit | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 2,231 | 2,202 | |
Regulatory liabilities, non-current | 48,648 | 50,034 | |
Renewable energy program | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 39,442 | 39,287 | |
Regulatory liabilities, non-current | 103 | 10,300 | |
Sundance maintenance | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 2,989 | 5,698 | |
Regulatory liabilities, non-current | 11,508 | 11,319 | |
Deferred property taxes | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 0 | 0 | |
Regulatory liabilities, non-current | 13,856 | 7,046 | |
Demand side management | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 10,819 | 15,024 | |
Regulatory liabilities, non-current | 0 | 24,146 | |
FERC transmission true up | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 6,598 | 1,045 | |
Regulatory liabilities, non-current | 3,008 | 2,004 | |
TCA balancing account | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 2,902 | 0 | |
Regulatory liabilities, non-current | 4,672 | 0 | |
Tax expense adjustor mechanism | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 7,089 | 7,018 | |
Regulatory liabilities, non-current | 0 | 0 | |
Tax expense adjustor mechanism | Forecast | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | $ 7,000 | ||
Active union medical trust | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 0 | 0 | |
Regulatory liabilities, non-current | 6,057 | 2,041 | |
Deferred gains on utility property | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 2,423 | 2,423 | |
Regulatory liabilities, non-current | 1,544 | 4,163 | |
Other | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 409 | 532 | |
Regulatory liabilities, non-current | 189 | 255 | |
ACC | Excess deferred income taxes - ACC - Tax Cuts and Jobs Act | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 41,330 | 59,918 | |
Regulatory liabilities, non-current | 1,012,583 | 1,054,053 | |
FERC | Excess deferred income taxes - ACC - Tax Cuts and Jobs Act | |||
Detail of regulatory liabilities | |||
Regulatory liabilities, current | 7,240 | 6,302 | |
Regulatory liabilities, non-current | $ 229,147 | $ 237,357 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2017 | |
Income Taxes | |||
Reduction in net deferred income tax liabilities | $ 1,140,000,000 | ||
Income tax benefit | $ 31,000,000 | $ 62,000,000 | |
Amortization period | 28 years 6 months | ||
Income tax expense benefit attributable to non controlling interests | $ 0 | ||
Interest expense to be received on the underpayment of income taxes | 1,000,000 | ||
Increase (decrease) in deferred income taxes due to regulation adoption | 42,000,000 | ||
ARIZONA PUBLIC SERVICE COMPANY | |||
Income Taxes | |||
Increase (decrease) in deferred income taxes due to regulation adoption | 8,000,000 | ||
Federal | |||
Income Taxes | |||
Income tax benefit | 14,000,000 | 57,000,000 | |
General business tax credit carryforwards | 35,000,000 | ||
State | |||
Income Taxes | |||
State credit carryforwards net of federal benefit | $ 33,000,000 | $ 16,000,000 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Tabular reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties, at the beginning and end of the year | |||
Total unrecognized tax benefits, beginning of the year | $ 43,435 | $ 40,731 | $ 41,966 |
Additions for tax positions of the current year | 3,418 | 3,373 | 3,436 |
Additions for tax positions of prior years | 1,431 | 1,843 | 2,696 |
Reductions for tax positions of prior years for: | |||
Changes in judgment | (1,965) | (2,078) | (1,764) |
Settlements with taxing authorities | 0 | 0 | 0 |
Lapses of applicable statute of limitations | (664) | (434) | (5,603) |
Total unrecognized tax benefits, end of the year | 45,655 | 43,435 | 40,731 |
ARIZONA PUBLIC SERVICE COMPANY | |||
Tabular reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties, at the beginning and end of the year | |||
Total unrecognized tax benefits, beginning of the year | 43,435 | 40,731 | 41,966 |
Additions for tax positions of the current year | 3,418 | 3,373 | 3,436 |
Additions for tax positions of prior years | 1,431 | 1,843 | 2,696 |
Reductions for tax positions of prior years for: | |||
Changes in judgment | (1,965) | (2,078) | (1,764) |
Settlements with taxing authorities | 0 | 0 | 0 |
Lapses of applicable statute of limitations | (664) | (434) | (5,603) |
Total unrecognized tax benefits, end of the year | $ 45,655 | $ 43,435 | $ 40,731 |
Income Taxes - Summary of Unrec
Income Taxes - Summary of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax [Line Items] | |||
Tax positions, that if recognized, would decrease our effective tax rate | $ 25,714 | $ 22,813 | $ 19,504 |
Unrecognized tax benefit interest expense/(benefit) recognized | 266 | 459 | (780) |
Unrecognized tax benefit interest accrued | 1,855 | 1,589 | 1,130 |
ARIZONA PUBLIC SERVICE COMPANY | |||
Income Tax [Line Items] | |||
Tax positions, that if recognized, would decrease our effective tax rate | 25,714 | 22,813 | 19,504 |
Unrecognized tax benefit interest expense/(benefit) recognized | 266 | 459 | (780) |
Unrecognized tax benefit interest accrued | $ 1,855 | $ 1,589 | $ 1,130 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
Federal | $ 11,869 | $ (13,551) | $ 18,375 |
State | 1,932 | 3,195 | 3,342 |
Total current | 13,801 | (10,356) | 21,717 |
Deferred: | |||
Federal | 53,398 | (14,982) | 94,721 |
State | 10,974 | 9,565 | 17,464 |
Total deferred | 64,372 | (5,417) | 112,185 |
Income tax expense/(benefit) | 78,173 | (15,773) | 133,902 |
ARIZONA PUBLIC SERVICE COMPANY | |||
Current: | |||
Federal | 57,299 | (54,697) | 88,180 |
State | 99 | 695 | 1,877 |
Total current | 57,398 | (54,002) | 90,057 |
Deferred: | |||
Federal | 15,122 | 29,321 | 32,436 |
State | 16,244 | 15,109 | 22,321 |
Total deferred | 31,366 | 44,430 | 54,757 |
Income tax expense/(benefit) | $ 88,764 | $ (9,572) | $ 144,814 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Reconciliation Increases Reductions in Tax Expense [Abstract] | |||
Federal income tax expense at statutory rate | $ 136,127 | $ 113,828 | $ 139,533 |
State income tax net of federal income tax benefit | 19,146 | 18,599 | 23,115 |
State income tax credits net of federal income tax benefit | (8,951) | (8,519) | (6,704) |
Nondeductible expenditures associated with ballot initiative | 0 | 0 | 7,879 |
Stock compensation | 34 | (2,252) | (1,804) |
Excess deferred income taxes — Tax Cuts and Jobs Act | (50,543) | (124,082) | (6,725) |
Allowance for equity funds used during construction (see Note 1) | (2,747) | (2,476) | (7,231) |
Palo Verde VIE noncontrolling interest (see Note 18) | (4,094) | (4,094) | (4,094) |
Investment tax credit amortization | (7,510) | (6,851) | (6,742) |
Other | (3,289) | 74 | (3,325) |
Income tax expense/(benefit) | 78,173 | (15,773) | 133,902 |
ARIZONA PUBLIC SERVICE COMPANY | |||
Income Tax Reconciliation Increases Reductions in Tax Expense [Abstract] | |||
Federal income tax expense at statutory rate | 142,020 | 120,790 | 154,260 |
State income tax net of federal income tax benefit | 20,124 | 19,267 | 24,531 |
State income tax credits net of federal income tax benefit | (7,213) | (6,781) | (5,440) |
Nondeductible expenditures associated with ballot initiative | 0 | 0 | 0 |
Stock compensation | 183 | (1,054) | (780) |
Excess deferred income taxes — Tax Cuts and Jobs Act | (50,543) | (124,082) | (4,715) |
Allowance for equity funds used during construction (see Note 1) | (2,747) | (2,476) | (7,231) |
Palo Verde VIE noncontrolling interest (see Note 18) | (4,094) | (4,094) | (4,094) |
Investment tax credit amortization | (7,510) | (6,851) | (6,742) |
Other | (1,456) | (4,291) | (4,975) |
Income tax expense/(benefit) | $ 88,764 | $ (9,572) | $ 144,814 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Income Tax Liability (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
DEFERRED TAX ASSETS | ||
Risk management activities | $ 4,287 | $ 17,552 |
Regulatory liabilities: | ||
Excess deferred income taxes — Tax Cuts and Jobs Act | 319,091 | 335,877 |
Asset retirement obligation and removal costs | 157,470 | 143,011 |
Unamortized investment tax credits | 50,879 | 52,236 |
Other postretirement liabilities | 95,778 | 43,841 |
Other | 43,551 | 52,382 |
Operating lease liabilities | 107,853 | 15,497 |
Pension liabilities | 45,853 | 73,210 |
Coal reclamation liabilities | 42,065 | 40,837 |
Renewable energy incentives | 25,355 | 28,066 |
Credit and loss carryforwards | 26,460 | 54,795 |
Other | 78,113 | 47,605 |
Total deferred tax assets | 996,755 | 904,909 |
DEFERRED TAX LIABILITIES | ||
Plant-related | (2,489,899) | (2,448,458) |
Risk management activities | (1,174) | (27) |
Pension and other postretirement assets | (123,462) | (21,892) |
Other special use funds | (42,927) | (44,507) |
Operating lease right-of-use assets | (107,853) | (15,497) |
Regulatory assets: | ||
Allowance for equity funds used during construction | (41,038) | (40,023) |
Deferred fuel and purchased power | (47,673) | (35,162) |
Pension benefits | (116,219) | (163,339) |
Retired power plant costs | (35,214) | (42,228) |
Other | (106,227) | (82,722) |
Other | (20,472) | (3,393) |
Total deferred tax liabilities | (3,132,158) | (2,897,248) |
Deferred income taxes — net | (2,135,403) | (1,992,339) |
ARIZONA PUBLIC SERVICE COMPANY | ||
DEFERRED TAX ASSETS | ||
Risk management activities | 4,287 | 17,552 |
Regulatory liabilities: | ||
Excess deferred income taxes — Tax Cuts and Jobs Act | 319,091 | 335,877 |
Asset retirement obligation and removal costs | 157,470 | 143,011 |
Unamortized investment tax credits | 50,879 | 52,236 |
Other postretirement liabilities | 95,778 | 43,841 |
Other | 43,551 | 52,382 |
Operating lease liabilities | 107,414 | 15,497 |
Pension liabilities | 40,168 | 67,976 |
Coal reclamation liabilities | 42,065 | 40,837 |
Renewable energy incentives | 25,355 | 28,066 |
Credit and loss carryforwards | 8,034 | 10,992 |
Other | 78,113 | 55,451 |
Total deferred tax assets | 972,205 | 863,718 |
DEFERRED TAX LIABILITIES | ||
Plant-related | (2,489,899) | (2,448,458) |
Risk management activities | (1,174) | (27) |
Pension and other postretirement assets | (122,580) | (21,458) |
Other special use funds | (42,927) | (44,507) |
Operating lease right-of-use assets | (107,414) | (15,497) |
Regulatory assets: | ||
Allowance for equity funds used during construction | (41,038) | (40,023) |
Deferred fuel and purchased power | (47,673) | (35,162) |
Pension benefits | (116,219) | (163,339) |
Retired power plant costs | (35,214) | (42,228) |
Other | (106,227) | (82,722) |
Other | (5,513) | (3,393) |
Total deferred tax liabilities | (3,115,878) | (2,896,814) |
Deferred income taxes — net | $ (2,143,673) | $ (2,033,096) |
Lines of Credit and Short-Ter_3
Lines of Credit and Short-Term Borrowings - Schedule of Credit Facilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Pinnacle West | ||
Lines of Credit and Short-Term Borrowings | ||
Commitment fees (as a percent) | 0.125% | 0.125% |
ARIZONA PUBLIC SERVICE COMPANY | ||
Lines of Credit and Short-Term Borrowings | ||
Commitment fees (as a percent) | 0.10% | 0.10% |
Revolving credit facility | ||
Lines of Credit and Short-Term Borrowings | ||
Commitments under Credit Facilities | $ 1,231,000 | $ 1,250,000 |
Outstanding Commercial Paper, Term Loan and Revolving Credit Facility Borrowings | (169,000) | (114,675) |
Amount of Credit Facilities Available | 1,062,000 | 1,135,325 |
Revolving credit facility | Pinnacle West | ||
Lines of Credit and Short-Term Borrowings | ||
Commitments under Credit Facilities | 231,000 | 250,000 |
Outstanding Commercial Paper, Term Loan and Revolving Credit Facility Borrowings | (169,000) | (114,675) |
Amount of Credit Facilities Available | 62,000 | 135,325 |
Revolving credit facility | ARIZONA PUBLIC SERVICE COMPANY | ||
Lines of Credit and Short-Term Borrowings | ||
Commitments under Credit Facilities | 1,000,000 | 1,000,000 |
Outstanding Commercial Paper, Term Loan and Revolving Credit Facility Borrowings | 0 | 0 |
Amount of Credit Facilities Available | $ 1,000,000 | $ 1,000,000 |
Lines of Credit and Short-Ter_4
Lines of Credit and Short-Term Borrowings - Additional Information (Details) | 12 Months Ended | |||||
Dec. 31, 2020USD ($)Facility | Dec. 23, 2020USD ($) | Dec. 17, 2020USD ($) | May 05, 2020USD ($) | May 04, 2020USD ($) | Dec. 31, 2019USD ($) | |
ARIZONA PUBLIC SERVICE COMPANY | ACC | ||||||
Debt Provisions | ||||||
Percentage of APS's capitalization used in calculation of short-term debt authorization | 7.00% | |||||
Required amount to be used in purchases of natural gas and power which is used in calculation of short-term debt authorization | $ 500,000,000 | |||||
Term loan | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Notes issued | $ 150,000,000 | |||||
Term loan | Pinnacle West | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Maximum borrowing capacity on credit facility upon satisfaction of certain conditions and consent of lenders | $ 50,000,000 | |||||
Notes issued | $ 31,000,000 | |||||
Long-term line of credit | $ 19,000,000 | |||||
Revolving credit facility | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Long-term line of credit | 169,000,000 | $ 114,675,000 | ||||
Amount committed | 1,231,000,000 | 1,250,000,000 | ||||
Revolving credit facility | Pinnacle West | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Long-term line of credit | 169,000,000 | 114,675,000 | ||||
Amount committed | 231,000,000 | 250,000,000 | ||||
Revolving credit facility | Pinnacle West | Revolving credit facility maturing July 2023 | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Maximum borrowing capacity on credit facility upon satisfaction of certain conditions and consent of lenders | 300,000,000 | |||||
Long-term line of credit | 0 | |||||
Amount committed | 200,000,000 | |||||
Revolving credit facility | ARIZONA PUBLIC SERVICE COMPANY | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Long-term line of credit | 0 | 0 | ||||
Amount committed | 1,000,000,000 | $ 1,000,000,000 | ||||
Revolving credit facility | ARIZONA PUBLIC SERVICE COMPANY | Revolving credit facility maturing June 2022 | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Amount committed | 500,000,000 | |||||
Revolving credit facility | ARIZONA PUBLIC SERVICE COMPANY | Revolving credit facility maturing July 2023 | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Amount committed | 500,000,000 | |||||
Revolving credit facility | ARIZONA PUBLIC SERVICE COMPANY | Revolving Credit Facility Maturing in 2022 and 2023 | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Maximum borrowing capacity on credit facility upon satisfaction of certain conditions and consent of lenders | 1,400,000,000 | |||||
Amount committed | $ 1,000,000,000 | |||||
Number of credit facilities | Facility | 2 | |||||
Additional capacity increase available | $ 700,000,000 | |||||
Letter of credit | Pinnacle West | Revolving credit facility maturing July 2023 | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Outstanding letters of credit | 0 | |||||
Letter of credit | ARIZONA PUBLIC SERVICE COMPANY | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Outstanding letters of credit | 5,200,000 | |||||
Letter of credit | ARIZONA PUBLIC SERVICE COMPANY | Revolving Credit Facility Maturing in 2022 and 2023 | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Outstanding letters of credit | 0 | |||||
Commercial paper | Pinnacle West | Revolving credit facility maturing July 2023 | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Commercial paper | 150,000,000 | |||||
Commercial paper | ARIZONA PUBLIC SERVICE COMPANY | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Maximum commercial paper support available under credit facility | 500,000,000 | |||||
Commercial paper | ARIZONA PUBLIC SERVICE COMPANY | Revolving Credit Facility Maturing in 2022 and 2023 | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Commercial paper | $ 0 | |||||
LIBOR | Term loan | Pinnacle West | ||||||
Lines of Credit and Short-Term Borrowings | ||||||
Debt instrument, basis spread on variable rate | 1.40% |
Long-Term Debt and Liquidity _3
Long-Term Debt and Liquidity Matters - Components of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 17, 2020 | Jun. 16, 2020 | May 22, 2020 | Dec. 31, 2019 |
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Total long-term debt | $ 6,314,266 | $ 5,632,558 | |||
TOTAL LONG-TERM DEBT LESS CURRENT MATURITIES | 6,314,266 | 4,832,558 | |||
Pinnacle West | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Gross long-term debt | 6,365,975 | ||||
Unamortized discount | (44) | (57) | |||
Unamortized debt issue costs | (3,635) | (518) | |||
Total long-term debt | 496,321 | 449,425 | |||
Less current maturities | 0 | 450,000 | |||
Total long-term debt less current maturities | 496,321 | (575) | |||
TOTAL LONG-TERM DEBT LESS CURRENT MATURITIES | 496,321 | (575) | |||
ARIZONA PUBLIC SERVICE COMPANY | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Gross long-term debt | 5,865,975 | ||||
Unamortized discount | (15,900) | (12,434) | |||
Unamortized premium | 14,781 | 7,423 | |||
Unamortized debt issue costs | (46,911) | (37,981) | |||
Total long-term debt | 5,817,945 | 5,183,133 | |||
Less current maturities | 0 | 350,000 | |||
Total long-term debt less current maturities | 5,817,945 | 4,833,133 | |||
TOTAL LONG-TERM DEBT LESS CURRENT MATURITIES | 5,817,945 | 4,833,133 | |||
Pollution Control Bonds - Variable | ARIZONA PUBLIC SERVICE COMPANY | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Gross long-term debt | $ 35,975 | $ 35,975 | |||
Pollution Control Bonds - Variable | ARIZONA PUBLIC SERVICE COMPANY | Minimum | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Weighted-average interest rate (as a percent) | 0.18% | 1.54% | |||
Pollution Control Bonds - Fixed | ARIZONA PUBLIC SERVICE COMPANY | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Gross long-term debt | $ 0 | $ 115,150 | |||
Interest rate (as a percent) | 4.70% | ||||
Total Pollution Control Bonds | ARIZONA PUBLIC SERVICE COMPANY | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Gross long-term debt | $ 35,975 | 151,125 | |||
Senior unsecured notes | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Interest rate (as a percent) | 1.30% | 2.25% | |||
Senior unsecured notes | ARIZONA PUBLIC SERVICE COMPANY | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Gross long-term debt | $ 5,830,000 | 4,875,000 | |||
Senior unsecured notes | ARIZONA PUBLIC SERVICE COMPANY | Minimum | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Interest rate (as a percent) | 2.55% | 3.35% | |||
Senior unsecured notes | ARIZONA PUBLIC SERVICE COMPANY | Maximum | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Interest rate (as a percent) | 6.88% | ||||
Senior unsecured notes | Pinnacle West | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Gross long-term debt | $ 500,000 | 300,000 | |||
Interest rate (as a percent) | 1.30% | ||||
Term loan | Term loans | ARIZONA PUBLIC SERVICE COMPANY | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Term loans | $ 0 | 200,000 | |||
Term loan | Term Loan Facility Maturing 2020 | Pinnacle West | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Term loans | $ 0 | $ 150,000 | |||
Weighted-average interest rate (as a percent) | 2.20% | ||||
Term loan | Term Loan Facility Maturing 2020 | ARIZONA PUBLIC SERVICE COMPANY | |||||
Long-Term Debt and Liquidity Matters [Line Items] | |||||
Weighted-average interest rate (as a percent) | 2.12% |
Long-Term Debt and Liquidity _4
Long-Term Debt and Liquidity Matters - Additional Information (Details) - USD ($) | Nov. 19, 2020 | Jun. 17, 2020 | May 22, 2020 | Jan. 15, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 23, 2020 | Dec. 17, 2020 | Dec. 16, 2020 | Nov. 18, 2020 | Sep. 11, 2020 | Jun. 16, 2020 | May 05, 2020 |
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Repayment of long-term debt | $ 915,150,000 | $ 600,000,000 | $ 182,000,000 | |||||||||||
Issuance of long-term debt | $ 1,596,672,000 | 1,092,188,000 | 445,245,000 | |||||||||||
Maximum | ||||||||||||||
Debt Provisions | ||||||||||||||
Ratio of consolidated debt to consolidated capitalization (as a percent) | 65.00% | |||||||||||||
Term loan | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Notes issued | $ 150,000,000 | |||||||||||||
Repayment of long-term debt | $ 150,000,000 | |||||||||||||
Pinnacle West | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Repayment of long-term debt | $ 450,000,000 | 0 | 0 | |||||||||||
Issuance of long-term debt | $ 496,950,000 | 0 | 150,000,000 | |||||||||||
Debt Provisions | ||||||||||||||
Actual ratio of consolidated debt to total consolidated capitalization required to be maintained as per the debt covenant (as a percent) | 54.00% | |||||||||||||
Pinnacle West | Term loan | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Notes issued | $ 31,000,000 | |||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Repayment of long-term debt | $ 465,150,000 | 600,000,000 | 182,000,000 | |||||||||||
Issuance of long-term debt | $ 1,099,722,000 | $ 1,092,188,000 | 295,245,000 | |||||||||||
Debt Provisions | ||||||||||||||
Actual ratio of consolidated debt to total consolidated capitalization required to be maintained as per the debt covenant (as a percent) | 49.00% | |||||||||||||
Equity infusion from Pinnacle West | $ 150,000,000 | $ 150,000,000 | ||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | ACC | ||||||||||||||
Debt Provisions | ||||||||||||||
Long term debt authorization | $ 7,500,000,000 | $ 5,900,000,000 | ||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | Term loan | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Repayment of long-term debt | $ 200,000,000 | |||||||||||||
ARIZONA PUBLIC SERVICE COMPANY | Senior notes | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Interest rate (as a percent) | 2.20% | |||||||||||||
Extinguishment of debt | $ 150,000,000 | |||||||||||||
Senior unsecured notes | Pinnacle West | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Interest rate (as a percent) | 1.30% | |||||||||||||
Senior unsecured notes | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Interest rate (as a percent) | 1.30% | 2.25% | ||||||||||||
Senior unsecured notes | Senior notes | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Notes issued | $ 500,000,000 | $ 300,000,000 | ||||||||||||
Senior unsecured notes | ARIZONA PUBLIC SERVICE COMPANY | Maximum | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Interest rate (as a percent) | 6.88% | |||||||||||||
Senior unsecured notes | ARIZONA PUBLIC SERVICE COMPANY | Minimum | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Interest rate (as a percent) | 3.35% | 2.55% | ||||||||||||
Senior unsecured notes | ARIZONA PUBLIC SERVICE COMPANY | Senior notes | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Notes issued | $ 405,000,000 | $ 250,000,000 | $ 300,000,000 | $ 400,000,000 | ||||||||||
Interest rate (as a percent) | 2.60% | 2.65% | ||||||||||||
Extinguishment of debt | $ 600,000,000 | |||||||||||||
Issuance of long-term debt | $ 105,000,000 | |||||||||||||
City of Farmington, New Mexico Pollution Control Revenue Refunding Bond | ARIZONA PUBLIC SERVICE COMPANY | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Interest rate (as a percent) | 4.70% | |||||||||||||
Repayment of long-term debt | 49,400,000 | |||||||||||||
City of Farmington, New Mexico Pollution Control Revenue Refunding Bond, 1994 Series B | ARIZONA PUBLIC SERVICE COMPANY | ||||||||||||||
Long-Term Debt and Liquidity Matters [Line Items] | ||||||||||||||
Interest rate (as a percent) | 4.70% | |||||||||||||
Repayment of long-term debt | $ 65,750,000 |
Long-Term Debt and Liquidity _5
Long-Term Debt and Liquidity Matters - Future Principal Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Pinnacle West | |
Principal payments due on long-term debt | |
2021 | $ 0 |
2022 | 0 |
2023 | 0 |
2024 | 250,000 |
2025 | 800,000 |
Thereafter | 5,315,975 |
Total | 6,365,975 |
ARIZONA PUBLIC SERVICE COMPANY | |
Principal payments due on long-term debt | |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 250,000 |
2025 | 300,000 |
Thereafter | 5,315,975 |
Total | $ 5,865,975 |
Long-Term Debt and Liquidity _6
Long-Term Debt and Liquidity Matters - Fair Value of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Estimated fair value of long-term debt, including current maturities | ||
Carrying Amount | $ 6,314,266 | $ 5,632,558 |
Fair Value | 7,612,841 | 6,194,392 |
Pinnacle West | ||
Estimated fair value of long-term debt, including current maturities | ||
Carrying Amount | 496,321 | 449,425 |
Fair Value | 509,050 | 450,822 |
ARIZONA PUBLIC SERVICE COMPANY | ||
Estimated fair value of long-term debt, including current maturities | ||
Carrying Amount | 5,817,945 | 5,183,133 |
Fair Value | $ 7,103,791 | $ 5,743,570 |
Retirement Plans and Other Po_3
Retirement Plans and Other Postretirement Benefits - Additional Information (Details) - USD ($) | Jan. 04, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | ||||
Initial pre-65 ultimate health care cost trend rate (as a percent) | 4.75% | 4.75% | ||
Initial post-65 healthcare cost trend rate (as a percent) | 2.00% | 4.75% | ||
Funded percentage (more than) | 100.00% | |||
Partnership funding commitments, contribution amount (up to) | $ 50,000,000 | |||
Partnership funding commitments, funded amount | 38,000,000 | |||
Minimum contributions under MAP-21 | ||||
Voluntary employer contributions over next three years (up to) | $ 100,000,000 | |||
Subsequent Event | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Transfer to active union medical account | $ (106,000,000) | |||
Pension Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected long-term return on plan assets for next fiscal year (as a percent) | 5.30% | |||
Contributions | ||||
Employer contributions | $ 100,000,000 | $ 150,000,000 | $ 50,000,000 | |
Minimum contributions under MAP-21 | ||||
Minimum contributions under MAP-21 | $ 0 | |||
Pension Benefits | Subsequent Event | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Transfer to active union medical account | (106,000,000) | |||
Other Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected long-term return on plan assets for next fiscal year (as a percent) | 5.05% | |||
Contributions | ||||
Employer contributions | $ 0 | 0 | ||
Minimum contributions under MAP-21 | ||||
Retiree medical cost reimbursement | 26,000,000 | 30,000,000 | 72,000,000 | |
Other Benefits | Subsequent Event | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Transfer to active union medical account | $ 106,000,000 | |||
Pinnacle West | ||||
Minimum contributions under MAP-21 | ||||
Expenses recorded for the defined contribution savings plan | $ 11,000,000 | $ 11,000,000 | $ 11,000,000 | |
ARIZONA PUBLIC SERVICE COMPANY | ||||
Minimum contributions under MAP-21 | ||||
APS's employees share of total cost of the plans (as a percent) | 99.00% |
Retirement Plans and Other Po_4
Retirement Plans and Other Postretirement Benefits - Net Periodic Benefit Costs and Portion including Portion Charged to Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net periodic benefit costs and the portion of these costs charged to expense | |||
Portion of cost/(benefit) charged to expense | $ (56,341) | $ (22,989) | $ (49,791) |
Pension Benefits | |||
Net periodic benefit costs and the portion of these costs charged to expense | |||
Service cost-benefits earned during the period | 56,233 | 49,902 | 56,669 |
Interest cost on benefit obligation | 118,567 | 136,843 | 124,689 |
Expected return on plan assets | (187,443) | (171,884) | (182,853) |
Prior service credit | 0 | 0 | 0 |
Net actuarial loss | 34,612 | 42,584 | 32,082 |
Net periodic benefit cost/(benefit) | 21,969 | 57,445 | 30,587 |
Portion of cost/(benefit) charged to expense | 3,386 | 30,312 | 10,120 |
Other Benefits | |||
Net periodic benefit costs and the portion of these costs charged to expense | |||
Service cost-benefits earned during the period | 22,236 | 18,369 | 21,100 |
Interest cost on benefit obligation | 25,857 | 29,894 | 28,147 |
Expected return on plan assets | (40,077) | (38,412) | (42,082) |
Prior service credit | (37,575) | (37,821) | (37,842) |
Net actuarial loss | 0 | 0 | 0 |
Net periodic benefit cost/(benefit) | (29,559) | (27,970) | (30,677) |
Portion of cost/(benefit) charged to expense | $ (20,966) | $ (19,859) | $ (21,426) |
Retirement Plans and Other Po_5
Retirement Plans and Other Postretirement Benefits - Changes Benefit Obligations and Funded Status (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Pension Benefits | |||
Change in Benefit Obligation | |||
Benefit obligation at the beginning of the period | $ 3,613,114 | $ 3,190,626 | |
Service cost | 56,233 | 49,902 | $ 56,669 |
Interest cost | 118,567 | 136,843 | 124,689 |
Benefit payments | (191,704) | (177,882) | |
Actuarial (gain) loss | 306,657 | 413,625 | |
Benefit obligation at the end of the period | 3,902,867 | 3,613,114 | 3,190,626 |
Change in Plan Assets | |||
Balance at the beginning of the period | 3,318,351 | 2,733,476 | |
Actual return on plan assets | 642,373 | 602,030 | |
Employer contributions | 100,000 | 150,000 | 50,000 |
Benefit payments | (174,180) | (167,155) | |
Balance at the end of the period | 3,886,544 | 3,318,351 | 2,733,476 |
Funded Status at the end of the period | (16,323) | (294,763) | |
Other Benefits | |||
Change in Benefit Obligation | |||
Benefit obligation at the beginning of the period | 746,924 | 676,771 | |
Service cost | 22,236 | 18,369 | 21,100 |
Interest cost | 25,857 | 29,894 | 28,147 |
Benefit payments | (31,511) | (32,486) | |
Actuarial (gain) loss | (139,472) | 54,376 | |
Benefit obligation at the end of the period | 624,034 | 746,924 | 676,771 |
Change in Plan Assets | |||
Balance at the beginning of the period | 837,494 | 723,677 | |
Actual return on plan assets | 150,076 | 144,095 | |
Employer contributions | 0 | 0 | |
Benefit payments | (26,405) | (30,278) | |
Balance at the end of the period | 961,165 | 837,494 | $ 723,677 |
Funded Status at the end of the period | $ 337,131 | $ 90,570 |
Retirement Plans and Other Po_6
Retirement Plans and Other Postretirement Benefits - Projected Benefit Obligation for Pension Plans (Details) - Pension Benefits - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Projected benefit obligation and the accumulated benefit obligation for pension plans with an accumulated obligation in excess of plan assets | ||
Accumulated benefit obligation | $ 171,672 | $ 169,091 |
Fair value of plan assets | 0 | 0 |
Projected benefit obligation | 182,184 | 3,613,114 |
Fair value of plan assets | $ 0 | $ 3,318,351 |
Retirement Plans and Other Po_7
Retirement Plans and Other Postretirement Benefits - Amounts Recognized on the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Amounts recognized on the Consolidated Balance Sheets | ||
Noncurrent asset | $ 502,992 | $ 90,570 |
Pension Benefits | ||
Amounts recognized on the Consolidated Balance Sheets | ||
Noncurrent asset | 165,861 | 0 |
Current liability | (15,700) | (14,578) |
Noncurrent liability | (166,484) | (280,185) |
Net amount recognized | (16,323) | (294,763) |
Other Benefits | ||
Amounts recognized on the Consolidated Balance Sheets | ||
Noncurrent asset | 337,131 | 90,570 |
Current liability | 0 | 0 |
Noncurrent liability | 0 | 0 |
Net amount recognized | $ 337,131 | $ 90,570 |
Retirement Plans and Other Po_8
Retirement Plans and Other Postretirement Benefits - Impact to Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Pension Benefits | ||
Details related to accumulated other comprehensive loss | ||
Net actuarial loss (gain) | $ 552,301 | $ 735,186 |
Prior service credit | 0 | 0 |
APS’s portion recorded as a regulatory (asset) liability | (469,953) | (660,223) |
Income tax expense (benefit) | (20,364) | (18,546) |
Accumulated other comprehensive loss (gain) | 61,984 | 56,417 |
Other Benefits | ||
Details related to accumulated other comprehensive loss | ||
Net actuarial loss (gain) | (237,233) | 12,238 |
Prior service credit | (152,337) | (189,912) |
APS’s portion recorded as a regulatory (asset) liability | 387,293 | 177,209 |
Income tax expense (benefit) | 1,018 | 570 |
Accumulated other comprehensive loss (gain) | $ (1,259) | $ 105 |
Retirement Plans and Other Po_9
Retirement Plans and Other Postretirement Benefits - Weighted-Average Assumptions for Pensions and Other Benefits (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Weighted-average assumptions used to determine benefit obligations | |||
Rate of compensation increase (as a percent) | 4.00% | 4.00% | |
Initial pre-65 healthcare cost trend rate (as a percent) | 6.50% | 7.00% | |
Initial pre-65 ultimate health care cost trend rate (as a percent) | 4.75% | 4.75% | |
Number of years to ultimate trend rate (pre-65 participants) | 5 years | 6 years | |
Initial post-65 healthcare cost trend rate (as a percent) | 2.00% | 4.75% | |
Interest crediting rate – cash balance pension plans | 4.50% | 4.50% | |
Weighted-average assumptions used to determine net periodic benefit costs | |||
Initial pre-65 health care cost trend rate (as a percent) | 7.00% | 7.00% | 7.00% |
Initial pre-65 ultimate healthcare cost trend rate (as a percent) | 4.75% | 4.75% | 4.75% |
Number of years to ultimate trend rate (pre-65 participants) | 5 years | 7 years | 8 years |
Initial post-65 health care cost trend rate (as a percent) | 4.75% | 4.75% | 4.75% |
Interest crediting rate – cash balance pension plans | 4.50% | 4.50% | 4.50% |
Pension Benefits | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 2.53% | 3.30% | |
Weighted-average assumptions used to determine net periodic benefit costs | |||
Discount rate (as a percent) | 3.30% | 4.34% | 3.65% |
Rate of compensation increase (as a percent) | 4.00% | 4.00% | 4.00% |
Expected long-term return on plan assets (as a percent) | 5.75% | 6.25% | 6.05% |
Other Benefits | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 2.63% | 3.42% | |
Weighted-average assumptions used to determine net periodic benefit costs | |||
Discount rate (as a percent) | 3.42% | 4.39% | 3.71% |
Expected long-term return on plan assets (as a percent) | 4.85% | 5.40% | 5.40% |
Retirement Plans and Other P_10
Retirement Plans and Other Postretirement Benefits - Asset Allocation (Details) | Dec. 31, 2020 |
Pension Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Allocation | 100.00% |
Actual Allocation | 100.00% |
Pension Benefits | Long-term fixed income assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Allocation | 72.00% |
Actual Allocation | 68.00% |
Pension Benefits | Return-generating assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Allocation | 28.00% |
Actual Allocation | 32.00% |
Target Allocation | 28.00% |
Pension Benefits | Equities in US and other developed markets | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Allocation | 17.00% |
Pension Benefits | Equities in emerging markets | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Allocation | 6.00% |
Pension Benefits | Alternative investments | |
Defined Benefit Plan Disclosure [Line Items] | |
Target Allocation | 5.00% |
Other Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual Allocation | 100.00% |
Other Benefits | Long-term fixed income assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual Allocation | 55.00% |
Other Benefits | Return-generating assets | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual Allocation | 45.00% |
Retirement Plans and Other P_11
Retirement Plans and Other Postretirement Benefits - Fair Value of Pinnacle West's Pension Plan (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Other | $ 691,233 | $ 832,143 | |
Fair value of plan assets | 3,886,544 | 3,318,351 | $ 2,733,476 |
Pension Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 1,398,305 | 852,239 | |
Pension Benefits | Significant Other Observable Inputs (Level 2) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 1,797,006 | 1,633,969 | |
Other Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Other | 118,440 | 107,473 | |
Fair value of plan assets | 961,165 | 837,494 | $ 723,677 |
Other Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 612,921 | 519,382 | |
Other Benefits | Significant Other Observable Inputs (Level 2) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 229,804 | 210,639 | |
Cash and cash equivalents | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 9,911 | 9,370 | |
Cash and cash equivalents | Pension Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 9,911 | 9,370 | |
Cash and cash equivalents | Other Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 1,909 | 2,184 | |
Cash and cash equivalents | Other Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 1,909 | 2,184 | |
Corporate | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 1,684,782 | 1,541,729 | |
Corporate | Pension Benefits | Significant Other Observable Inputs (Level 2) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 1,684,782 | 1,541,729 | |
Corporate | Other Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 221,488 | 202,640 | |
Corporate | Other Benefits | Significant Other Observable Inputs (Level 2) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 221,488 | 202,640 | |
U.S. Treasury | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 794,571 | 406,112 | |
U.S. Treasury | Pension Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 794,571 | 406,112 | |
U.S. Treasury | Other Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 258,102 | 353,650 | |
U.S. Treasury | Other Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 258,102 | 353,650 | |
Other fixed income | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 112,224 | 92,240 | |
Other fixed income | Pension Benefits | Significant Other Observable Inputs (Level 2) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 112,224 | 92,240 | |
Other fixed income | Other Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 8,316 | 7,999 | |
Other fixed income | Other Benefits | Significant Other Observable Inputs (Level 2) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 8,316 | 7,999 | |
Common stock equities | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 331,058 | 250,829 | |
Common stock equities | Pension Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 331,058 | 250,829 | |
Common stock equities | Other Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 175,605 | 146,316 | |
Common stock equities | Other Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 175,605 | 146,316 | |
Mutual funds | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 262,765 | 185,928 | |
Mutual funds | Pension Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 262,765 | 185,928 | |
Mutual funds | Other Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Fair value of plan assets | 34,310 | 14,351 | |
Mutual funds | Other Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 34,310 | 14,351 | |
Equities | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Other | 407,522 | 392,403 | |
Fair value of plan assets | 407,522 | 392,403 | |
Equities | Other Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Other | 94,674 | 83,648 | |
Fair value of plan assets | 94,674 | 83,648 | |
Real estate | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Other | 191,595 | 171,645 | |
Fair value of plan assets | 191,595 | 171,645 | |
Real estate | Other Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Other | 19,778 | 19,806 | |
Fair value of plan assets | 19,778 | 19,806 | |
Fixed income | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Other | 98,065 | ||
Fair value of plan assets | 98,065 | ||
Partnerships | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Other | 22,420 | 103,796 | |
Fair value of plan assets | 22,420 | 103,796 | |
Short-term investments and other | Pension Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Other | 69,696 | 66,234 | |
Fair value of plan assets | 69,696 | 66,234 | |
Short-term investments and other | Pension Benefits | Significant Other Observable Inputs (Level 2) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 0 | ||
Short-term investments and other | Other Benefits | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Other | 3,988 | 4,019 | |
Fair value of plan assets | 146,983 | 6,900 | |
Short-term investments and other | Other Benefits | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | 142,995 | 2,881 | |
Short-term investments and other | Other Benefits | Significant Other Observable Inputs (Level 2) | |||
Fair value of Pinnacle West's pension plan and other postretirement benefit plan assets, by asset category | |||
Gross fair value of plan assets | $ 0 | $ 0 |
Retirement Plans and Other P_12
Retirement Plans and Other Postretirement Benefits - Estimated Future Benefit Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Pension Benefits | |
Estimated Future Benefit Payments | |
2021 | $ 210,119 |
2022 | 209,593 |
2023 | 215,527 |
2024 | 220,241 |
2025 | 220,787 |
Years 2026-2030 | 1,116,848 |
Other Benefits | |
Estimated Future Benefit Payments | |
2021 | 31,204 |
2022 | 31,731 |
2023 | 32,196 |
2024 | 31,914 |
2025 | 31,484 |
Years 2026-2030 | $ 153,536 |
Leases - Additional information
Leases - Additional information (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2020USD ($)Counterparty | Jun. 01, 2020Lease | Dec. 31, 2019USD ($) | |
Operating Leased Assets [Line Items] | ||||
Number of lease agreements, sell and lease back | Counterparty | 3 | |||
Number of lease agreements | Lease | 2 | |||
Operating lease right-of-use assets | $ 505,064 | $ 145,813 | ||
Operating lease, liability | 436,121 | |||
Prepaid lease costs reclassified as other deferred debits | 34,983 | 33,400 | ||
Deferred lease costs | 187,448 | $ 168,323 | ||
Operating lease, expense | $ 18,000 | |||
Lease not yet commenced | 650,000 | |||
Purchased Power Lease Contracts | ||||
Operating Leased Assets [Line Items] | ||||
Operating lease, liability | $ 372,763 | |||
Operating lease, expense | 47,000 | |||
Contingent rentals | $ 109,000 |
Leases - Lease costs (Details)
Leases - Lease costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Leased Assets [Line Items] | ||
Operating lease cost | $ 87,376 | $ 60,228 |
Variable lease cost | 122,331 | 114,015 |
Short-term lease cost | 3,804 | 4,385 |
Total lease cost | 213,511 | 178,628 |
Purchased Power Lease Contracts | ||
Operating Leased Assets [Line Items] | ||
Operating lease cost | 68,883 | 42,190 |
Variable lease cost | 121,359 | 113,233 |
Short-term lease cost | 0 | 0 |
Total lease cost | 190,242 | 155,423 |
Land, Property & Equipment Leases | ||
Operating Leased Assets [Line Items] | ||
Operating lease cost | 18,493 | 18,038 |
Variable lease cost | 972 | 782 |
Short-term lease cost | 3,804 | 4,385 |
Total lease cost | $ 23,269 | $ 23,205 |
Leases - Maturity of our operat
Leases - Maturity of our operating lease liabilities (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Lessee, Lease, Description [Line Items] | |
2021 | $ 81,113 |
2022 | 79,174 |
2023 | 78,536 |
2024 | 77,888 |
2025 | 77,978 |
Thereafter | 74,074 |
Total lease commitments | 468,763 |
Less imputed interest | 32,642 |
Total lease liabilities | 436,121 |
Purchased Power Lease Contracts | |
Lessee, Lease, Description [Line Items] | |
2021 | 66,658 |
2022 | 68,325 |
2023 | 70,033 |
2024 | 71,784 |
2025 | 73,578 |
Thereafter | 36,760 |
Total lease commitments | 387,138 |
Less imputed interest | 14,375 |
Total lease liabilities | 372,763 |
Land, Property & Equipment Leases | |
Lessee, Lease, Description [Line Items] | |
2021 | 14,455 |
2022 | 10,849 |
2023 | 8,503 |
2024 | 6,104 |
2025 | 4,400 |
Thereafter | 37,314 |
Total lease commitments | 81,625 |
Less imputed interest | 18,267 |
Total lease liabilities | $ 63,358 |
Leases - Other additional infor
Leases - Other additional information related to operating lease liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liabilities - operating cash flows | $ 75,097 | $ 69,075 |
Right-of-use operating lease assets obtained in exchange for operating lease liabilities | $ 441,653 | $ 11,262 |
Weighted average remaining lease term | 6 years | 13 years |
Weighted average discount rate | 1.69% | 3.71% |
Jointly-Owned Facilities (Detai
Jointly-Owned Facilities (Details) - ARIZONA PUBLIC SERVICE COMPANY $ in Thousands | Dec. 31, 2020USD ($) |
Palo Verde Units 1 and 3 | |
Interests in jointly-owned facilities | |
Percent owned | 29.10% |
Plant in service | $ 1,911,339 |
Accumulated depreciation | 1,108,883 |
Construction work in progress | $ 26,623 |
Palo Verde Unit 2 | |
Interests in jointly-owned facilities | |
Percent owned | 16.80% |
Plant in service | $ 649,035 |
Accumulated depreciation | 379,305 |
Construction work in progress | $ 7,268 |
Palo Verde Common | |
Interests in jointly-owned facilities | |
Percent owned | 28.00% |
Plant in service | $ 774,054 |
Accumulated depreciation | 320,107 |
Construction work in progress | 41,607 |
Palo Verde Sale Leaseback | |
Interests in jointly-owned facilities | |
Plant in service | 351,050 |
Accumulated depreciation | 253,014 |
Construction work in progress | $ 0 |
Four Corners Generating Station | |
Interests in jointly-owned facilities | |
Percent owned | 63.00% |
Plant in service | $ 1,621,418 |
Accumulated depreciation | 581,436 |
Construction work in progress | $ 35,028 |
Cholla Common Facilities | |
Interests in jointly-owned facilities | |
Percent owned | 50.50% |
Plant in service | $ 193,807 |
Accumulated depreciation | 109,447 |
Construction work in progress | $ 1,206 |
ANPP 500kV System | |
Interests in jointly-owned facilities | |
Percent owned | 33.50% |
Plant in service | $ 131,991 |
Accumulated depreciation | 52,626 |
Construction work in progress | $ 3,859 |
Navajo Southern System | |
Interests in jointly-owned facilities | |
Percent owned | 26.00% |
Plant in service | $ 89,113 |
Accumulated depreciation | 33,536 |
Construction work in progress | $ 1,215 |
Palo Verde — Yuma 500kV System | |
Interests in jointly-owned facilities | |
Percent owned | 25.30% |
Plant in service | $ 23,247 |
Accumulated depreciation | 6,681 |
Construction work in progress | $ 433 |
Four Corners Switchyards | |
Interests in jointly-owned facilities | |
Percent owned | 61.80% |
Plant in service | $ 69,441 |
Accumulated depreciation | 17,009 |
Construction work in progress | $ 3,145 |
Phoenix — Mead System | |
Interests in jointly-owned facilities | |
Percent owned | 17.10% |
Plant in service | $ 39,437 |
Accumulated depreciation | 19,072 |
Construction work in progress | $ 73 |
Palo Verde — Rudd 500kV System | |
Interests in jointly-owned facilities | |
Percent owned | 50.00% |
Plant in service | $ 93,123 |
Accumulated depreciation | 28,206 |
Construction work in progress | $ 1,921 |
Morgan — Pinnacle Peak System | |
Interests in jointly-owned facilities | |
Percent owned | 64.60% |
Plant in service | $ 117,497 |
Accumulated depreciation | 20,754 |
Construction work in progress | $ 912 |
Round Valley System | |
Interests in jointly-owned facilities | |
Percent owned | 50.00% |
Plant in service | $ 531 |
Accumulated depreciation | 174 |
Construction work in progress | $ 13 |
Palo Verde — Morgan System | |
Interests in jointly-owned facilities | |
Percent owned | 88.90% |
Plant in service | $ 257,220 |
Accumulated depreciation | 20,943 |
Construction work in progress | $ 530 |
Hassayampa — North Gila System | |
Interests in jointly-owned facilities | |
Percent owned | 80.00% |
Plant in service | $ 148,067 |
Accumulated depreciation | 16,080 |
Construction work in progress | $ 0 |
Cholla 500kV Switchyard | |
Interests in jointly-owned facilities | |
Percent owned | 85.70% |
Plant in service | $ 7,896 |
Accumulated depreciation | 1,850 |
Construction work in progress | $ 940 |
Saguaro 500kV Switchyard | |
Interests in jointly-owned facilities | |
Percent owned | 60.00% |
Plant in service | $ 21,669 |
Accumulated depreciation | 13,229 |
Construction work in progress | $ 2 |
Kyrene — Knox System | |
Interests in jointly-owned facilities | |
Percent owned | 50.00% |
Plant in service | $ 578 |
Accumulated depreciation | 323 |
Construction work in progress | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Palo Verde Nuclear Generating Station and Contractual Obligations (Details) | Nov. 02, 2020USD ($)claim | Dec. 31, 2020USD ($)Trust | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($)time_periodclaim | Dec. 31, 1986Trust |
Fuel and Purchased Power Commitments and Purchase Obligations [Abstract] | ||||||
Total take-or-pay commitments | $ 170,097,000 | $ 165,695,000 | ||||
ARIZONA PUBLIC SERVICE COMPANY | ||||||
Palo Verde Nuclear Generating Station [Abstract] | ||||||
Maximum insurance against public liability per occurrence for a nuclear incident | 13,800,000,000 | |||||
Maximum available nuclear liability insurance | 450,000,000 | |||||
Remaining nuclear liability insurance through mandatory industry wide retrospective assessment program | 13,300,000,000 | |||||
Maximum assessment per reactor for each nuclear incident | 137,600,000 | |||||
Annual limit per incident with respect to maximum assessment | $ 20,500,000 | |||||
Number of VIE lessor trusts | Trust | 3 | 3 | ||||
Maximum potential retrospective assessment per incident of APS | $ 120,100,000 | |||||
Annual payment limitation with respect to maximum potential retrospective assessment | 17,900,000 | |||||
Amount of "all risk" (including nuclear hazards) insurance for property damage to, and decontamination of, property at Palo Verde | 2,800,000,000 | |||||
Request second-year energy price for exported energy | $ 25,800,000 | |||||
Period to provide collateral assurance based on rating triggers | 20 days | |||||
Collateral assurance based on rating triggers | $ 75,100,000 | |||||
Fuel and Purchased Power Commitments and Purchase Obligations [Abstract] | ||||||
2021 | 772,000,000 | |||||
2022 | 671,000,000 | |||||
2023 | 632,000,000 | |||||
2024 | 592,000,000 | |||||
2025 | 564,000,000 | |||||
Thereafter | 5,400,000,000 | |||||
Total take-or-pay commitments | 170,097,000 | 165,695,000 | ||||
ARIZONA PUBLIC SERVICE COMPANY | Coal take-or-pay commitments | ||||||
Fuel and Purchased Power Commitments and Purchase Obligations [Abstract] | ||||||
2021 | 182,569,000 | |||||
2022 | 183,604,000 | |||||
2023 | 184,540,000 | |||||
2024 | 186,804,000 | |||||
2025 | 177,114,000 | |||||
Thereafter | 1,024,854,000 | |||||
Total take-or-pay commitments | 1,900,000,000 | |||||
Present value of commitments | 1,500,000,000 | |||||
Total purchases | 189,817,000 | 204,888,000 | $ 206,093,000 | |||
ARIZONA PUBLIC SERVICE COMPANY | Renewable energy credits | ||||||
Fuel and Purchased Power Commitments and Purchase Obligations [Abstract] | ||||||
2021 | 35,000,000 | |||||
2022 | 31,000,000 | |||||
2023 | 30,000,000 | |||||
2024 | 28,000,000 | |||||
2025 | 25,000,000 | |||||
Thereafter | 105,000,000 | |||||
ARIZONA PUBLIC SERVICE COMPANY | Coal Mine Reclamation Obligations | ||||||
Fuel and Purchased Power Commitments and Purchase Obligations [Abstract] | ||||||
2021 | 16,000,000 | |||||
2022 | 17,000,000 | |||||
2023 | 18,000,000 | |||||
2024 | 19,000,000 | |||||
2025 | 20,000,000 | |||||
Thereafter | 69,000,000 | |||||
ARIZONA PUBLIC SERVICE COMPANY | Coal Mine Reclamation Balance Sheet Obligations | ||||||
Fuel and Purchased Power Commitments and Purchase Obligations [Abstract] | ||||||
Total take-or-pay commitments | $ 170,000,000 | $ 166,000,000 | ||||
Arizona Public Service Company and Palo Verde Owners vs. United States Department of Energy - Spent Nuclear Fuel and Waste Disposal | ||||||
Palo Verde Nuclear Generating Station [Abstract] | ||||||
Settlement amount, awarded to company | $ 12,200,000 | $ 99,700,000 | ||||
Arizona Public Service Company and Palo Verde Owners vs. United States Department of Energy - Spent Nuclear Fuel and Waste Disposal | ARIZONA PUBLIC SERVICE COMPANY | ||||||
Palo Verde Nuclear Generating Station [Abstract] | ||||||
Gain contingency, new claims filed, number | claim | 7 | 6 | ||||
Gain contingency, number of separate time periods | time_period | 6 | |||||
Settlement amount, awarded to company | $ 3,600,000 | $ 29,000,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Superfund-Related Matters and Southwest Power Outage (Details) - ARIZONA PUBLIC SERVICE COMPANY - Contaminated groundwater wells $ in Millions | Apr. 05, 2018plaintiffDefendant | Dec. 16, 2016plaintiff | Aug. 06, 2013Defendant | Dec. 31, 2020USD ($) |
Commitments and Contingencies [Line Items] | ||||
Costs related to investigation and study under Superfund site | $ | $ 3 | |||
Number of defendants against whom Roosevelt Irrigation District ("RID") filed lawsuit | Defendant | 28 | 24 | ||
Number of plaintiffs | 2 | |||
Settled Litigation | ||||
Commitments and Contingencies [Line Items] | ||||
Number of plaintiffs | 2 |
Commitments and Contingencies_3
Commitments and Contingencies - Environmental Matters and Financial Assurances (Details) - USD ($) $ in Thousands | Feb. 22, 2021 | Jul. 03, 2018 | Jul. 06, 2016 | Dec. 31, 2020 |
Financial Assurances | ||||
Equity contribution guarantees | $ 3,000 | |||
Production tax credit guarantees | 39,000 | |||
2017 Settlement Agreement and its Customer Education and Outreach Plan | ARIZONA PUBLIC SERVICE COMPANY | Subsequent Event | ||||
Arizona Attorney General [Abstract] | ||||
Settlement amount | $ 24,750 | |||
Settlement amount returned to customers | $ 24,000 | |||
Letter of credit | ARIZONA PUBLIC SERVICE COMPANY | ||||
Financial Assurances | ||||
Outstanding letters of credit | 5,200 | |||
Four Corners | NTEC | ||||
Environmental Matters | ||||
Option to purchase, ownership interest (as a percent) | 7.00% | 7.00% | ||
Payment received for coal supply agreement | $ 70,000 | |||
Four Corners | 4CA | ||||
Environmental Matters | ||||
Percentage share cost of control | 7.00% | |||
Remaining balance of notes | 27,000 | |||
Four Corners | Coal Supply Agreement Arbitration | NTEC | ||||
Environmental Matters | ||||
Option to purchase, ownership interest (as a percent) | 7.00% | |||
Four Corners | Coal Supply Agreement Arbitration | 4CA | ||||
Environmental Matters | ||||
Asset purchase agreement | $ 10,000 | |||
Regional Haze Rules | Four Corners Units 4 and 5 | ARIZONA PUBLIC SERVICE COMPANY | ||||
Environmental Matters | ||||
Percentage share cost of control | 63.00% | |||
Expected environmental cost | $ 400,000 | |||
Regional Haze Rules | Four Corners Units 4 and 5 | Four Corners | ARIZONA PUBLIC SERVICE COMPANY | ||||
Environmental Matters | ||||
Additional expected environment cost | $ 45,000 | |||
Regional Haze Rules | Four Corners Units 4 and 5 | Natural Gas Tolling Letter of Credit | ARIZONA PUBLIC SERVICE COMPANY | ||||
Environmental Matters | ||||
Additional percentage share of cost of control | 7.00% | |||
Coal Combustion Waste | Four Corners | ARIZONA PUBLIC SERVICE COMPANY | ||||
Environmental Matters | ||||
Additional expected environment cost | $ 27,000 | |||
Coal Combustion Waste | Navajo Generating Station | ARIZONA PUBLIC SERVICE COMPANY | ||||
Environmental Matters | ||||
Additional expected environment cost | 1,000 | |||
Coal Combustion Waste | Minimum | Cholla | ARIZONA PUBLIC SERVICE COMPANY | ||||
Environmental Matters | ||||
Additional expected environment cost | 16,000 | |||
Coal Combustion Waste | Minimum | Cholla and Four Corners | ARIZONA PUBLIC SERVICE COMPANY | ||||
Environmental Matters | ||||
Additional expected environment cost | 10,000 | |||
Coal Combustion Waste | Maximum | Cholla and Four Corners | ARIZONA PUBLIC SERVICE COMPANY | ||||
Environmental Matters | ||||
Additional expected environment cost | 15,000 | |||
Surety Bonds Expiring in 2020 | ARIZONA PUBLIC SERVICE COMPANY | ||||
Financial Assurances | ||||
Surety bonds expiring, amount | $ 16,000 |
Asset Retirement Obligations (D
Asset Retirement Obligations (Details) - ARIZONA PUBLIC SERVICE COMPANY - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Change in asset retirement obligations | ||
Asset retirement obligations at the beginning of year | $ 657,218 | $ 726,545 |
Changes attributable to: | ||
Accretion expense | 38,652 | 39,726 |
Settlements | (9,710) | (12,591) |
Estimated cash flow revisions | 18,923 | (96,462) |
Asset retirement obligations at the end of year | 705,083 | 657,218 |
Four Corners Units 4 and 5 | ||
Asset Retirement Obligations | ||
Increase (decrease) in asset retirement obligation | 13,000 | |
Navajo Generating Station | ||
Asset Retirement Obligations | ||
Increase (decrease) in asset retirement obligation | $ 6,000 | (8,000) |
Palo Verde Nuclear Generating Station | ||
Asset Retirement Obligations | ||
Increase (decrease) in asset retirement obligation | (89,000) | |
Decrease in regulatory asset | 80,000 | |
Decrease in regulatory liability | $ 9,000 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Commodity contracts, assets | $ 4,749 | $ 515 |
Commodity contracts, liabilities | (4,271) | (69) |
Nuclear decommissioning trust | 1,138,435 | 1,010,775 |
Nuclear decommissioning trust, other | 592,227 | 521,245 |
Other special use fund | 254,509 | 245,095 |
Other special use funds, other | 504 | 474 |
Total assets | 1,397,693 | 1,256,385 |
Total assets, other | 588,460 | 521,650 |
Liabilities | ||
Gross derivative liability, other | 2,986 | |
Gross derivative liability, other | (711) | |
Amount reported on balance sheet | (18,619) | (72,132) |
Equity securities | ||
Assets | ||
Nuclear decommissioning trust | 11,968 | 13,273 |
Nuclear decommissioning trust, other | (17,828) | 2,401 |
Other special use fund | 37,841 | 7,616 |
Other special use funds, other | 504 | 474 |
U.S. commingled equity funds | ||
Assets | ||
Nuclear decommissioning trust | 610,055 | 518,844 |
U.S. Treasury debt | ||
Assets | ||
Nuclear decommissioning trust | 164,514 | 160,607 |
Other special use fund | 203,220 | 232,848 |
Corporate debt | ||
Assets | ||
Nuclear decommissioning trust | 149,509 | 115,869 |
Mortgage-backed securities | ||
Assets | ||
Nuclear decommissioning trust | 99,623 | 118,795 |
Municipal bonds | ||
Assets | ||
Nuclear decommissioning trust | 89,705 | 73,040 |
Other special use fund | 13,448 | 4,631 |
Other fixed income | ||
Assets | ||
Nuclear decommissioning trust | 13,061 | 10,347 |
Level 1 | ||
Assets | ||
Commodity contracts, assets | 0 | 0 |
Nuclear decommissioning trust | 194,310 | 171,479 |
Other special use fund | 240,557 | 239,990 |
Total assets | 434,867 | 411,469 |
Liabilities | ||
Gross derivative liability | 0 | 0 |
Level 1 | Equity securities | ||
Assets | ||
Nuclear decommissioning trust | 29,796 | 10,872 |
Other special use fund | 37,337 | 7,142 |
Level 1 | U.S. commingled equity funds | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Level 1 | U.S. Treasury debt | ||
Assets | ||
Nuclear decommissioning trust | 164,514 | 160,607 |
Other special use fund | 203,220 | 232,848 |
Level 1 | Corporate debt | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Level 1 | Mortgage-backed securities | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Level 1 | Municipal bonds | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Other special use fund | 0 | 0 |
Level 1 | Other fixed income | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Level 2 | ||
Assets | ||
Commodity contracts, assets | 9,016 | 551 |
Nuclear decommissioning trust | 351,898 | 318,051 |
Other special use fund | 13,448 | 4,631 |
Total assets | 374,362 | 323,233 |
Liabilities | ||
Gross derivative liability | (20,498) | (67,992) |
Level 2 | Equity securities | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Other special use fund | 0 | 0 |
Level 2 | U.S. commingled equity funds | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Level 2 | U.S. Treasury debt | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Other special use fund | 0 | 0 |
Level 2 | Corporate debt | ||
Assets | ||
Nuclear decommissioning trust | 149,509 | 115,869 |
Level 2 | Mortgage-backed securities | ||
Assets | ||
Nuclear decommissioning trust | 99,623 | 118,795 |
Level 2 | Municipal bonds | ||
Assets | ||
Nuclear decommissioning trust | 89,705 | 73,040 |
Other special use fund | 13,448 | 4,631 |
Level 2 | Other fixed income | ||
Assets | ||
Nuclear decommissioning trust | 13,061 | 10,347 |
Level 3 | ||
Assets | ||
Commodity contracts, assets | 4 | 33 |
Nuclear decommissioning trust | 0 | 0 |
Other special use fund | 0 | 0 |
Total assets | 4 | 33 |
Liabilities | ||
Gross derivative liability | (1,107) | (3,429) |
Level 3 | Equity securities | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Other special use fund | 0 | 0 |
Level 3 | U.S. commingled equity funds | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Level 3 | U.S. Treasury debt | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Other special use fund | 0 | 0 |
Level 3 | Corporate debt | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Level 3 | Mortgage-backed securities | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Level 3 | Municipal bonds | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Other special use fund | 0 | 0 |
Level 3 | Other fixed income | ||
Assets | ||
Nuclear decommissioning trust | 0 | 0 |
Fair Value Measured at Net Asset Value Per Share | U.S. commingled equity funds | ||
Assets | ||
Nuclear decommissioning trust | $ 610,055 | $ 518,844 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - USD ($) | Dec. 31, 2020 | Nov. 06, 2020 |
Fair Value Disclosures [Abstract] | ||
Stated interest rate for notes receivable | 3.90% | |
Financing receivable | $ 27,100,000 | |
Coal Community Transition Plan | ACC | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Amount funded by shareholders | $ 25,200,000 | $ 25,000,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |||
Net income attributable to common shareholders | $ 550,559 | $ 538,320 | $ 511,047 |
Weighted Average common shares outstanding — basic (in shares) | 112,666 | 112,443 | 112,129 |
Net effect of dilutive securities: | |||
Contingently issuable performance shares and restricted stock units (in shares) | 276 | 315 | 421 |
Weighted average common shares outstanding — diluted (in shares) | 112,942 | 112,758 | 112,550 |
Earnings per weighted-average common share outstanding | |||
Net income attributable to common shareholders - basic (in dollars per share) | $ 4.89 | $ 4.79 | $ 4.56 |
Net Income attributable to common shareholders - diluted (in dollars per share) | $ 4.87 | $ 4.77 | $ 4.54 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020USD ($)performance_criteriashares | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Stock-Based Compensation | |||
Compensation cost that has been charged against income | $ 18 | $ 18 | $ 20 |
Total income tax benefit recognized | 4 | 7 | 7 |
Total unrecognized compensation cost related to nonvested share-based compensation arrangements granted | $ 9 | ||
Expected weighted-average period of recognition of unrecognized compensation cost | 2 years | ||
Total fair value of shares vested | $ 22 | 21 | 24 |
Performance Shares | |||
Number of performance element criteria | performance_criteria | 2 | ||
Performance period | 3 years | ||
Restricted stock unit awards | |||
Stock-Based Compensation | |||
Share-based liabilities paid | $ 6 | 5 | 4 |
Cash flow effect, cash used to settle awards | $ 4 | $ 5 | $ 5 |
Restricted Stock Units, Stock Grants and Stock Units | |||
Vesting period | 4 years | ||
Percentage of cash that the participant may elect as a dividend for the first option available under the plan | 50.00% | ||
Percentage of stock that the participant may elect as dividend under second option of plan | 50.00% | ||
Performance Shares | Maximum | |||
Performance Shares | |||
Exact number of shares issued as a percentage of the target award | 200.00% | ||
Performance Shares | Minimum | |||
Performance Shares | |||
Exact number of shares issued as a percentage of the target award | 0.00% | ||
Officers and Key Employees | Restricted stock unit awards | |||
Restricted Stock Units, Stock Grants and Stock Units | |||
Percentage of fully transferable shares of stock that the participant may elect as a deferral for the first option available under the plan | 100.00% | ||
Percentage of fully transferable shares of stock in that participant may receive cash | 100.00% | ||
Non-Officer Board of Director Member | Restricted stock unit awards | |||
Restricted Stock Units, Stock Grants and Stock Units | |||
Percentage of fully transferable shares of stock that the participant may elect as a deferral for the first option available under the plan | 100.00% | ||
Percentage of cash that the participant may elect as a dividend for the first option available under the plan | 100.00% | ||
Percentage of stock that the participant may elect as dividend under second option of plan | 50.00% | ||
Percentage of cash that the participant may elect as a dividend equivalent deferral for the first option available under the plan | 50.00% | ||
Percentage of fully transferable shares of stock that the participant may elect as a dividend equivalent deferral for the first option available under the plan | 50.00% | ||
2012 Plan | |||
Stock-Based Compensation | |||
Common shares available for grant (in shares) | shares | 4.6 | ||
Common shares available for issuance (in shares) | shares | 1.5 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock, Stock Grants, Stock Units and Performance Shares (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted Stock Units, Stock Grants, and Stock Units | |||
Stocks granted and the weighted average fair value | |||
Units granted (in shares) | 118,403 | 109,106 | 132,997 |
Grant date fair value (in dollars per share) | $ 71.70 | $ 89.15 | $ 77.51 |
Number of granted awards to be settled in cash (in shares) | 45,646 | 48,972 | 66,252 |
Performance Shares | |||
Stocks granted and the weighted average fair value | |||
Units granted (in shares) | 122,830 | 142,874 | 171,708 |
Grant date fair value (in dollars per share) | $ 104.74 | $ 92.16 | $ 76.56 |
Stock-Based Compensation - Stat
Stock-Based Compensation - Status of Nonvested Restricted Stock, Stock Grants, Stock Units and Performance Shares (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted Stock Units, Stock Grants, and Stock Units | |||
Nonvested shares | |||
Balance at the beginning of the period (in shares) | 242,612 | ||
Granted (in shares) | 118,403 | ||
Vested (in shares) | (136,893) | ||
Forfeited (in shares) | (3,565) | ||
Balance at the end of the period (in shares) | 220,557 | 242,612 | |
Weighted-Average Grant-Date Fair Value | |||
Balance at the beginning of the period (in dollars per share) | $ 81.38 | ||
Granted (in dollars per share) | 71.70 | $ 89.15 | $ 77.51 |
Vested (in dollars per share) | 73.80 | ||
Forfeited (in dollars per share) | 82.61 | ||
Balance at the end of the period (in dollars per share) | $ 77.93 | $ 81.38 | |
Vested awards outstanding at end of year (in shares) | 82,921 | ||
Vested awards outstanding at end of year (in dollars per share) | |||
Number of nonvested awards to be settled in cash (in shares) | 126,996 | ||
Performance Shares | |||
Nonvested shares | |||
Balance at the beginning of the period (in shares) | 306,970 | ||
Granted (in shares) | 122,830 | ||
Vested (in shares) | (161,906) | ||
Forfeited (in shares) | (7,890) | ||
Balance at the end of the period (in shares) | 260,004 | 306,970 | |
Weighted-Average Grant-Date Fair Value | |||
Balance at the beginning of the period (in dollars per share) | $ 83.65 | ||
Granted (in dollars per share) | 104.74 | $ 92.16 | $ 76.56 |
Vested (in dollars per share) | 76.53 | ||
Forfeited (in dollars per share) | 85.06 | ||
Balance at the end of the period (in dollars per share) | $ 98.28 | $ 83.65 | |
Vested awards outstanding at end of year (in shares) | 161,906 | ||
Vested awards outstanding at end of year (in dollars per share) |
Derivative Accounting - Additio
Derivative Accounting - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Derivative [Line Items] | |
Amounts reclassified from accumulated other comprehensive income | $ 0 |
ARIZONA PUBLIC SERVICE COMPANY | |
Derivative [Line Items] | |
Percentage of unrealized gains and losses on certain derivatives deferred for future rate treatment before accounting treatment change | 100.00% |
Commodity Contracts | |
Derivative [Line Items] | |
Aggregate fair value of derivative instruments in a net liability position | $ 21,605,000 |
Additional collateral to counterparties for energy related non-derivative instrument contracts | $ 90,000,000 |
Risk Management Assets | Credit Concentration Risk | |
Derivative [Line Items] | |
Concentration risk, percentage | 62.00% |
Aggregate fair value of derivative instruments in a net liability position | $ 5,000,000 |
Derivative Accounting - Outstan
Derivative Accounting - Outstanding Gross Notional Amounts Outstanding (Details) - Commodity Contracts MWh in Thousands | 12 Months Ended | |
Dec. 31, 2020MWhBcf | Dec. 31, 2019MWhBcf | |
Outstanding gross notional amount of derivatives | ||
Power (in MWh) | MWh | 368 | 193 |
Gas (in bcf) | Bcf | 205 | 257 |
Derivative Accounting - Gains a
Derivative Accounting - Gains and Losses from Derivative Instruments (Details) - Commodity Contracts - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Designated as Hedging Instruments | |||
Derivative Instruments in Designated Cash Flows Hedges | |||
Amount reclassified from accumulated other comprehensive income to earnings related to discontinued cash flow hedges | $ 0 | $ 0 | $ 0 |
Not Designated as Hedging Instruments | |||
Derivative Instruments Not Designated as Cash Flows Hedges | |||
Net Loss Recognized in Income | (3,178,000) | (84,953,000) | (15,508,000) |
Revenue | Not Designated as Hedging Instruments | |||
Derivative Instruments Not Designated as Cash Flows Hedges | |||
Net Loss Recognized in Income | 0 | 0 | (2,557,000) |
Fuel and purchased power | Designated as Hedging Instruments | |||
Derivative Instruments in Designated Cash Flows Hedges | |||
Loss reclassified from accumulated other comprehensive income into income (effective portion realized) | (763,000) | (1,512,000) | (2,000,000) |
Fuel and purchased power | Not Designated as Hedging Instruments | |||
Derivative Instruments Not Designated as Cash Flows Hedges | |||
Net Loss Recognized in Income | $ (3,178,000) | $ (84,953,000) | $ (12,951,000) |
Derivative Accounting - Derivat
Derivative Accounting - Derivative Instruments in the Balance Sheet (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Gross Recognized Derivatives | $ 4,749,000 | $ 515,000 |
Liabilities | ||
Amount Reported on Balance Sheet | (18,619,000) | (72,132,000) |
Commodity Contracts | ||
Assets | ||
Gross Recognized Derivatives | 9,020,000 | |
Amounts Offset | (4,271,000) | |
Net Recognized Derivatives | 4,749,000 | |
Other | 0 | 405,000 |
Amount Reported on Balance Sheet | 4,749,000 | |
Liabilities | ||
Gross Recognized Derivatives | (21,605,000) | (71,421,000) |
Amounts Offset | 4,271,000 | 474,000 |
Net Recognized Derivatives | (17,334,000) | (70,947,000) |
Other | (1,285,000) | (1,185,000) |
Amount Reported on Balance Sheet | (18,619,000) | (72,132,000) |
Assets and Liabilities | ||
Gross Recognized Derivatives | (12,585,000) | (70,837,000) |
Amounts Offset | 0 | 0 |
Net Recognized Derivatives | (12,585,000) | (70,837,000) |
Other | (1,285,000) | (780,000) |
Amount Reported on Balance Sheet | (13,870,000) | (71,617,000) |
Commodity Contracts | Current Assets | ||
Assets | ||
Gross Recognized Derivatives | 5,870,000 | 584,000 |
Amounts Offset | (2,939,000) | (474,000) |
Net Recognized Derivatives | 2,931,000 | 110,000 |
Other | 0 | 405,000 |
Amount Reported on Balance Sheet | 2,931,000 | 515,000 |
Commodity Contracts | Investments and Other Assets | ||
Assets | ||
Gross Recognized Derivatives | 3,150,000 | |
Amounts Offset | (1,332,000) | |
Net Recognized Derivatives | 1,818,000 | |
Other | 0 | |
Amount Reported on Balance Sheet | 1,818,000 | |
Commodity Contracts | Current Liabilities | ||
Liabilities | ||
Gross Recognized Derivatives | (9,211,000) | (38,235,000) |
Amounts Offset | 2,939,000 | 474,000 |
Net Recognized Derivatives | (6,272,000) | (37,761,000) |
Other | (1,285,000) | (1,185,000) |
Amount Reported on Balance Sheet | (7,557,000) | (38,946,000) |
Commodity Contracts | Deferred Credits and Other | ||
Liabilities | ||
Gross Recognized Derivatives | (12,394,000) | (33,186,000) |
Amounts Offset | 1,332,000 | 0 |
Net Recognized Derivatives | (11,062,000) | (33,186,000) |
Other | 0 | 0 |
Amount Reported on Balance Sheet | $ (11,062,000) | $ (33,186,000) |
Derivative Accounting - Credit
Derivative Accounting - Credit Risk and Related Contingent Features (Details) - Commodity Contracts $ in Thousands | Dec. 31, 2020USD ($) |
Credit Risk and Credit-Related Contingent Features | |
Aggregate fair value of derivative instruments in a net liability position | $ 21,605 |
Cash collateral posted | 0 |
Additional cash collateral in the event credit-risk related contingent features were fully triggered | $ 19,510 |
Other Income and Other Expens_2
Other Income and Other Expense (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 06, 2020 | |
Other income: | ||||
Interest income | $ 12,210,000 | $ 10,377,000 | $ 8,647,000 | |
Investment gains (losses) — net | 2,358,000 | 0 | 0 | |
Miscellaneous | 149,000 | 63,000 | 96,000 | |
Total other income | 56,703,000 | 50,263,000 | 24,896,000 | |
Other expense: | ||||
Non-operating costs | (12,400,000) | (10,663,000) | (10,076,000) | |
Investment gains (losses) — net | 0 | (1,835,000) | (417,000) | |
Miscellaneous | (45,376,000) | (5,382,000) | (7,473,000) | |
Total other expense | (57,776,000) | (17,880,000) | (17,966,000) | |
ARIZONA PUBLIC SERVICE COMPANY | ||||
Other income: | ||||
Interest income | 9,621,000 | 6,998,000 | 6,496,000 | |
Miscellaneous | 148,000 | 63,000 | 97,000 | |
Total other income | 51,755,000 | 46,884,000 | 22,746,000 | |
Other expense: | ||||
Non-operating costs | (10,659,000) | (9,612,000) | (9,462,000) | |
Miscellaneous | (43,035,000) | (3,378,000) | (5,830,000) | |
Total other expense | (53,694,000) | (12,990,000) | (15,292,000) | |
ACC | Coal Community Transition Plan | ||||
Other expense: | ||||
Amount funded by shareholders | 25,200,000 | $ 25,000,000 | ||
ACC | Navajo Nation, Electrification Projects | Coal Community Transition Plan | ||||
Other expense: | ||||
Amount funded by shareholders | 10,000,000 | $ 10,000,000 | ||
SCR deferral | ||||
Other income: | ||||
Debt return on Four Corners SCR | 26,121,000 | 19,541,000 | 16,153,000 | |
SCR deferral | ARIZONA PUBLIC SERVICE COMPANY | ||||
Other income: | ||||
Debt return on Four Corners SCR | 26,121,000 | 19,541,000 | 16,153,000 | |
Octotillo deferral | ||||
Other income: | ||||
Debt return on Four Corners SCR | 15,865,000 | 20,282,000 | 0 | |
Octotillo deferral | ARIZONA PUBLIC SERVICE COMPANY | ||||
Other income: | ||||
Debt return on Four Corners SCR | $ 15,865,000 | $ 20,282,000 | $ 0 |
Palo Verde Sale Leaseback Var_3
Palo Verde Sale Leaseback Variable Interest Entities (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020USD ($)TrustLease | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 1986Trust | |
Palo Verde Sale Leaseback Variable Interest Entities | ||||
Increase in net income due to consolidation of Palo Verde Sale Leaseback Trusts | $ 19,493 | $ 19,493 | $ 19,493 | |
ARIZONA PUBLIC SERVICE COMPANY | ||||
Palo Verde Sale Leaseback Variable Interest Entities | ||||
Number of VIE lessor trusts | Trust | 3 | 3 | ||
Increase in net income due to consolidation of Palo Verde Sale Leaseback Trusts | $ 19,493 | $ 19,493 | 19,493 | |
ARIZONA PUBLIC SERVICE COMPANY | Variable Interest Entity | ||||
Palo Verde Sale Leaseback Variable Interest Entities | ||||
Increase in net income due to consolidation of Palo Verde Sale Leaseback Trusts | $ 19,000 | |||
Initial loss exposure to the VIEs noncontrolling equity participants during lease extension period | 306,000 | |||
Maximum loss exposure to the VIE's noncontrolling equity participants during lease extension period | $ 456,000 | |||
Period Through 2023 | ARIZONA PUBLIC SERVICE COMPANY | Variable Interest Entity | ||||
Palo Verde Sale Leaseback Variable Interest Entities | ||||
Number of leases under which assets are retained | Lease | 1 | |||
Period Through 2033 | ARIZONA PUBLIC SERVICE COMPANY | Variable Interest Entity | ||||
Palo Verde Sale Leaseback Variable Interest Entities | ||||
Number of leases under which assets are retained | Lease | 2 | |||
Period 2021 through 2023 | ARIZONA PUBLIC SERVICE COMPANY | Variable Interest Entity | ||||
Palo Verde Sale Leaseback Variable Interest Entities | ||||
Annual lease payments | $ 23,000 | |||
Period 2024 through 2033 | ARIZONA PUBLIC SERVICE COMPANY | Variable Interest Entity | ||||
Palo Verde Sale Leaseback Variable Interest Entities | ||||
Annual lease payments | $ 16,000 | |||
Maximum | Period 2024 through 2033 | ARIZONA PUBLIC SERVICE COMPANY | Variable Interest Entity | ||||
Palo Verde Sale Leaseback Variable Interest Entities | ||||
Lease period | 2 years |
Palo Verde Sale Leaseback Var_4
Palo Verde Sale Leaseback Variable Interest Entities - Schedule of VIEs (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Palo Verde Sale Leaseback Variable Interest Entities | ||
Palo Verde sale leaseback property plant and equipment, net of accumulated depreciation | $ 15,159,210 | $ 14,522,538 |
Amounts relating to the VIEs included in Condensed Consolidated Balance Sheets | ||
Equity — Noncontrolling interests | 119,290 | 122,540 |
ARIZONA PUBLIC SERVICE COMPANY | ||
Palo Verde Sale Leaseback Variable Interest Entities | ||
Palo Verde sale leaseback property plant and equipment, net of accumulated depreciation | 15,158,846 | 14,522,156 |
Amounts relating to the VIEs included in Condensed Consolidated Balance Sheets | ||
Equity — Noncontrolling interests | 119,290 | 122,540 |
Palo Verde VIE | ARIZONA PUBLIC SERVICE COMPANY | ||
Palo Verde Sale Leaseback Variable Interest Entities | ||
Palo Verde sale leaseback property plant and equipment, net of accumulated depreciation | 98,036 | 101,906 |
Amounts relating to the VIEs included in Condensed Consolidated Balance Sheets | ||
Equity — Noncontrolling interests | $ 119,290 | $ 122,540 |
Investments in Nuclear Decomm_3
Investments in Nuclear Decommissioning Trusts and Other Special Use Funds (Details) - USD ($) $ in Thousands | Jan. 04, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Subsequent Event | |||||
Fair value of fixed income securities, summarized by contractual maturities | |||||
Transfer to active union medical account | $ 106,000 | ||||
ARIZONA PUBLIC SERVICE COMPANY | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | $ 1,392,944 | $ 1,392,944 | $ 1,255,870 | ||
Total Unrealized Gains | 468,247 | 468,247 | 363,476 | ||
Total Unrealized Losses | (398) | (398) | (669) | ||
Amortized cost | 687,000 | 687,000 | 691,000 | ||
Realized gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds | |||||
Realized gains | 12,370 | 11,132 | $ 6,680 | ||
Realized losses | (5,568) | (6,972) | (13,552) | ||
Proceeds from the sale of securities | 819,519 | 719,034 | 653,033 | ||
Fair value of fixed income securities, summarized by contractual maturities | |||||
Employee medical claims amount | 14,000 | 15,000 | |||
ARIZONA PUBLIC SERVICE COMPANY | Equity securities | |||||
Nuclear decommissioning trust fund assets | |||||
Equity Securities | 677,188 | 677,188 | 536,858 | ||
Total Unrealized Gains | 421,666 | 421,666 | 337,681 | ||
Total Unrealized Losses | 0 | 0 | 0 | ||
ARIZONA PUBLIC SERVICE COMPANY | Fixed income securities | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 733,080 | 733,080 | 716,137 | ||
Total Unrealized Gains | 46,581 | 46,581 | 25,795 | ||
Total Unrealized Losses | (398) | (398) | (669) | ||
Fair value of fixed income securities, summarized by contractual maturities | |||||
Less than one year | 52,642 | 52,642 | |||
1 year - 5 years | 323,570 | 323,570 | |||
5 years - 10 years | 136,045 | 136,045 | |||
Greater than 10 years | 220,823 | 220,823 | |||
Total | 733,080 | 733,080 | |||
ARIZONA PUBLIC SERVICE COMPANY | Other Receivables from Broker-Dealers and Clearing | |||||
Nuclear decommissioning trust fund assets | |||||
Other | (17,324) | (17,324) | 2,875 | ||
Total Unrealized Gains | 0 | 0 | 0 | ||
Total Unrealized Losses | 0 | 0 | 0 | ||
Nuclear Decommissioning Trusts | ARIZONA PUBLIC SERVICE COMPANY | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 1,138,435 | 1,138,435 | 1,010,775 | ||
Realized gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds | |||||
Realized gains | 12,194 | 11,024 | 6,679 | ||
Realized losses | (5,553) | (6,972) | (13,552) | ||
Proceeds from the sale of securities | 675,035 | 473,806 | 554,385 | ||
Nuclear Decommissioning Trusts | ARIZONA PUBLIC SERVICE COMPANY | Equity securities | |||||
Nuclear decommissioning trust fund assets | |||||
Equity Securities | 639,851 | 639,851 | 529,716 | ||
Nuclear Decommissioning Trusts | ARIZONA PUBLIC SERVICE COMPANY | Fixed income securities | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 516,412 | 516,412 | 478,658 | ||
Fair value of fixed income securities, summarized by contractual maturities | |||||
Less than one year | 19,563 | 19,563 | |||
1 year - 5 years | 151,537 | 151,537 | |||
5 years - 10 years | 133,307 | 133,307 | |||
Greater than 10 years | 212,005 | 212,005 | |||
Total | 516,412 | 516,412 | |||
Nuclear Decommissioning Trusts | ARIZONA PUBLIC SERVICE COMPANY | Other Receivables from Broker-Dealers and Clearing | |||||
Nuclear decommissioning trust fund assets | |||||
Other | (17,828) | (17,828) | 2,401 | ||
Coal Reclamation Escrow Account | ARIZONA PUBLIC SERVICE COMPANY | Fixed income securities | |||||
Fair value of fixed income securities, summarized by contractual maturities | |||||
Less than one year | 33,079 | 33,079 | |||
1 year - 5 years | 29,722 | 29,722 | |||
5 years - 10 years | 2,738 | 2,738 | |||
Greater than 10 years | 8,818 | 8,818 | |||
Total | 74,357 | 74,357 | |||
Active union medical trust | ARIZONA PUBLIC SERVICE COMPANY | Fixed income securities | |||||
Fair value of fixed income securities, summarized by contractual maturities | |||||
Less than one year | 0 | 0 | |||
1 year - 5 years | 142,311 | 142,311 | |||
5 years - 10 years | 0 | 0 | |||
Greater than 10 years | 0 | 0 | |||
Total | 142,311 | 142,311 | |||
Other Special Use Funds | ARIZONA PUBLIC SERVICE COMPANY | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 254,509 | 254,509 | 245,095 | ||
Realized gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds | |||||
Realized gains | 176 | 108 | 1 | ||
Realized losses | (15) | 0 | 0 | ||
Proceeds from the sale of securities | 144,484 | 245,228 | $ 98,648 | ||
Other Special Use Funds | ARIZONA PUBLIC SERVICE COMPANY | Equity securities | |||||
Nuclear decommissioning trust fund assets | |||||
Equity Securities | 37,337 | 37,337 | 7,142 | ||
Other Special Use Funds | ARIZONA PUBLIC SERVICE COMPANY | Fixed income securities | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 216,668 | 216,668 | 237,479 | ||
Other Special Use Funds | ARIZONA PUBLIC SERVICE COMPANY | Other Receivables from Broker-Dealers and Clearing | |||||
Nuclear decommissioning trust fund assets | |||||
Other | $ 504 | $ 504 | $ 474 |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Changes in accumulated other comprehensive income (loss) by component | ||
Beginning balance | $ 5,553,188 | $ 5,348,705 |
Ending balance | 5,752,793 | 5,553,188 |
Pension and Other Postretirement Benefits | ||
Changes in accumulated other comprehensive income (loss) by component | ||
Beginning balance | (56,522) | (45,997) |
OCI (loss) before reclassifications | (8,370) | (14,041) |
Amounts reclassified from accumulated other comprehensive loss | 4,167 | 3,516 |
Ending balance | (60,725) | (56,522) |
Derivative Instruments | ||
Changes in accumulated other comprehensive income (loss) by component | ||
Beginning balance | (574) | (1,711) |
OCI (loss) before reclassifications | (2,089) | 0 |
Amounts reclassified from accumulated other comprehensive loss | 592 | 1,137 |
Ending balance | (2,071) | (574) |
Accumulated Other Comprehensive Income (Loss) | ||
Changes in accumulated other comprehensive income (loss) by component | ||
Beginning balance | (57,096) | (47,708) |
OCI (loss) before reclassifications | (10,459) | (14,041) |
Amounts reclassified from accumulated other comprehensive loss | 4,759 | 4,653 |
Ending balance | (62,796) | (57,096) |
ARIZONA PUBLIC SERVICE COMPANY | ||
Changes in accumulated other comprehensive income (loss) by component | ||
Beginning balance | 5,998,803 | 5,786,797 |
Ending balance | 6,345,185 | 5,998,803 |
ARIZONA PUBLIC SERVICE COMPANY | Pension and Other Postretirement Benefits | ||
Changes in accumulated other comprehensive income (loss) by component | ||
Beginning balance | (34,948) | (25,396) |
OCI (loss) before reclassifications | (9,568) | (12,572) |
Amounts reclassified from accumulated other comprehensive loss | 3,598 | 3,020 |
Ending balance | (40,918) | (34,948) |
ARIZONA PUBLIC SERVICE COMPANY | Derivative Instruments | ||
Changes in accumulated other comprehensive income (loss) by component | ||
Beginning balance | (574) | (1,711) |
OCI (loss) before reclassifications | (18) | 0 |
Amounts reclassified from accumulated other comprehensive loss | 592 | 1,137 |
Ending balance | 0 | (574) |
ARIZONA PUBLIC SERVICE COMPANY | Accumulated Other Comprehensive Income (Loss) | ||
Changes in accumulated other comprehensive income (loss) by component | ||
Beginning balance | (35,522) | (27,107) |
OCI (loss) before reclassifications | (9,586) | (12,572) |
Amounts reclassified from accumulated other comprehensive loss | 4,190 | 4,157 |
Ending balance | $ (40,918) | $ (35,522) |
SCHEDULE I - CONDENSED FINANC_2
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONDENSED FINANCIAL STATEMENTS | |||
Operating expenses | $ 2,798,830 | $ 2,799,249 | $ 2,917,560 |
Other | |||
Total | 89,044 | 86,803 | 109,040 |
Interest expense | 247,501 | 235,251 | 243,465 |
Income tax benefit | 78,173 | (15,773) | 133,902 |
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | 550,559 | 538,320 | 511,047 |
Other comprehensive income (loss) — attributable to common shareholders | (5,700) | (9,388) | 5,846 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | 544,859 | 528,932 | 516,893 |
Pinnacle West | |||
CONDENSED FINANCIAL STATEMENTS | |||
Operating expenses | 7,901 | 12,451 | 53,844 |
Other | |||
Equity in earnings of subsidiaries | 566,147 | 562,946 | 569,249 |
Other expense | (4,586) | (3,957) | (3,202) |
Total | 561,561 | 558,989 | 566,047 |
Interest expense | 14,021 | 15,069 | 12,074 |
Income before income taxes | 539,639 | 531,469 | 500,129 |
Income tax benefit | (10,920) | (6,851) | (10,918) |
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | 550,559 | 538,320 | 511,047 |
Other comprehensive income (loss) — attributable to common shareholders | (5,700) | (9,388) | 5,846 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 544,859 | $ 528,932 | $ 516,893 |
SCHEDULE I - CONDENSED FINANC_3
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||||
Cash and cash equivalents | $ 59,968 | $ 10,283 | ||
Accounts receivable | 313,576 | 266,426 | ||
Income tax receivable | 6,792 | 21,727 | ||
Other current assets | 76,627 | 61,958 | ||
Total current assets | 1,198,319 | 1,030,030 | ||
Investments and other assets | ||||
Other assets | 92,922 | 96,953 | ||
Total investments and other assets | 1,485,866 | 1,352,823 | ||
Total Assets | 20,020,421 | 18,479,247 | ||
Current liabilities | ||||
Accounts payable | 318,585 | 346,448 | ||
Accrued taxes | 159,551 | 144,899 | ||
Common dividends payable | 93,531 | 87,982 | ||
Short-term borrowings | 169,000 | 114,675 | ||
Current maturities of long-term debt | 0 | 800,000 | ||
Operating lease liabilities | 74,785 | 12,713 | ||
Other current liabilities | 187,448 | 168,323 | ||
Total current liabilities | 1,360,433 | 2,078,365 | ||
Deferred credits and other | ||||
LONG-TERM DEBT LESS CURRENT MATURITIES (Note 7) | 6,314,266 | 4,832,558 | ||
Operating lease liabilities | 361,336 | 51,872 | ||
Other | 190,643 | 159,844 | ||
Total deferred credits and other | 6,592,929 | 6,015,136 | ||
COMMITMENTS AND CONTINGENCIES (SEE NOTES) | ||||
Common stock equity | ||||
Common stock | 2,677,482 | 2,659,561 | ||
Accumulated other comprehensive loss | (62,796) | (57,096) | ||
Retained earnings | 3,025,106 | 2,837,610 | ||
Total shareholders’ equity | 5,633,503 | 5,430,648 | ||
Noncontrolling interests (Note 18) | 119,290 | 122,540 | ||
Total equity | 5,752,793 | 5,553,188 | $ 5,348,705 | $ 5,135,730 |
Total Liabilities and Equity | 20,020,421 | 18,479,247 | ||
Pinnacle West | ||||
Current assets | ||||
Cash and cash equivalents | 19 | 19 | ||
Accounts receivable | 123,980 | 104,640 | ||
Income tax receivable | 14,719 | 15,905 | ||
Other current assets | 298 | 401 | ||
Total current assets | 139,016 | 120,965 | ||
Investments and other assets | ||||
Investments in subsidiaries | 6,400,339 | 6,067,957 | ||
Deferred income taxes | 7,589 | 40,757 | ||
Other assets | 52,595 | 50,139 | ||
Total investments and other assets | 6,460,523 | 6,158,853 | ||
Total Assets | 6,599,539 | 6,279,818 | ||
Current liabilities | ||||
Accounts payable | 5,669 | 7,634 | ||
Accrued taxes | 16,998 | 8,573 | ||
Common dividends payable | 93,531 | 87,982 | ||
Short-term borrowings | 169,000 | 114,675 | ||
Current maturities of long-term debt | 0 | 450,000 | ||
Operating lease liabilities | 90 | 81 | ||
Other current liabilities | 15,306 | 15,126 | ||
Total current liabilities | 300,594 | 684,071 | ||
Deferred credits and other | ||||
LONG-TERM DEBT LESS CURRENT MATURITIES (Note 7) | 496,321 | (575) | ||
Pension liabilities | 17,541 | 17,942 | ||
Operating lease liabilities | 1,683 | 1,780 | ||
Other | 30,607 | 23,412 | ||
Total deferred credits and other | 49,831 | 43,134 | ||
COMMITMENTS AND CONTINGENCIES (SEE NOTES) | ||||
Common stock equity | ||||
Common stock | 2,671,193 | 2,650,134 | ||
Accumulated other comprehensive loss | (62,796) | (57,096) | ||
Retained earnings | 3,025,106 | 2,837,610 | ||
Total shareholders’ equity | 5,633,503 | 5,430,648 | ||
Noncontrolling interests (Note 18) | 119,290 | 122,540 | ||
Total equity | 5,752,793 | 5,553,188 | ||
Total Liabilities and Equity | $ 6,599,539 | $ 6,279,818 |
SCHEDULE I - CONDENSED FINANC_4
SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT - Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities | |||
Net income | $ 570,052 | $ 557,813 | $ 530,540 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 686,253 | 664,140 | 650,955 |
Deferred income taxes | 69,469 | (1,479) | 117,355 |
Accounts receivable | (18,191) | (12,789) | 37,530 |
Accounts payable | (6,059) | 50,641 | (14,602) |
Net cash flow provided by operating activities | 966,365 | 956,726 | 1,277,144 |
Cash flows from investing activities | |||
Net cash flow used for investing activities | (1,277,818) | (1,130,977) | (1,192,824) |
Cash flows from financing activities | |||
Issuance of long-term debt | 1,596,672 | 1,092,188 | 445,245 |
Short-term debt borrowings under revolving credit facility | 751,690 | 49,000 | 45,000 |
Short-term debt repayments under revolving credit facility | (770,690) | (65,000) | (57,000) |
Dividends paid on common stock | (350,577) | (329,643) | (308,892) |
Repayment of long-term debt | (915,150) | (600,000) | (182,000) |
Common stock equity issuance and purchases — net | (1,389) | 692 | (5,055) |
Net cash flow provided by (used for) financing activities | 361,138 | 178,768 | (92,446) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 49,685 | 4,517 | (8,126) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 10,283 | 5,766 | 13,892 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 59,968 | 10,283 | 5,766 |
Pinnacle West | |||
Cash Flows from Operating Activities | |||
Net income | 550,559 | 538,320 | 511,047 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in earnings of subsidiaries - net | (566,147) | (562,946) | (569,249) |
Depreciation and amortization | 76 | 76 | 76 |
Deferred income taxes | 33,007 | (35,831) | 49,535 |
Accounts receivable | (7,903) | 182 | (7,881) |
Accounts payable | (1,964) | (2,129) | 1,967 |
Accrued taxes and income tax receivable - net | 9,610 | 16,400 | (13,535) |
Dividends received from subsidiaries | 357,500 | 336,300 | 316,000 |
Other | 20,163 | (1,300) | 31,807 |
Net cash flow provided by operating activities | 394,901 | 289,072 | 319,767 |
Cash flows from investing activities | |||
Investments in subsidiaries | (137,881) | 1,557 | (142,796) |
Repayments of loans from subsidiaries | 932 | 4,190 | 6,477 |
Advances of loans to subsidiaries | (7,261) | (4,165) | (500) |
Net cash flow used for investing activities | (144,210) | 1,582 | (136,819) |
Cash flows from financing activities | |||
Issuance of long-term debt | 496,950 | 0 | 150,000 |
Short-term debt borrowings under revolving credit facility | 211,690 | 49,000 | 20,000 |
Short-term debt repayments under revolving credit facility | (230,690) | (65,000) | (32,000) |
Commercial paper — net | 73,325 | 54,275 | (7,000) |
Dividends paid on common stock | (350,577) | (329,643) | (308,892) |
Repayment of long-term debt | (450,000) | 0 | 0 |
Common stock equity issuance and purchases — net | (1,389) | 692 | (5,055) |
Other | 0 | 0 | (1) |
Net cash flow provided by (used for) financing activities | (250,691) | (290,676) | (182,948) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 0 | (22) | 0 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 19 | 41 | 41 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ 19 | $ 19 | $ 41 |