Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 25, 2024 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 1-8962 | |
Entity Registrant Name | PINNACLE WEST CAPITAL CORPORATION | |
Entity Tax Identification Number | 86-0512431 | |
Entity Incorporation, State or Country Code | AZ | |
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 | |
Trading Symbol | PNW | |
Security Exchange Name | NYSE | |
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 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 113,611,506 | |
Entity Central Index Key | 0000764622 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
APS | ||
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2024 | |
Entity File Number | 1-4473 | |
Entity Registrant Name | ARIZONA PUBLIC SERVICE COMPANY | |
Entity Tax Identification Number | 86-0011170 | |
Entity Incorporation, State or Country Code | AZ | |
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 | |
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 Common Stock, Shares Outstanding | 71,264,947 | |
Entity Central Index Key | 0000007286 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Statement [Abstract] | ||||
OPERATING REVENUES (Note 2) | $ 1,308,994 | $ 1,121,703 | $ 2,260,706 | $ 2,066,658 |
OPERATING EXPENSES | ||||
Fuel and purchased power | 437,172 | 407,754 | 795,036 | 802,258 |
Operations and maintenance | 272,266 | 277,238 | 529,844 | 527,318 |
Depreciation and amortization | 225,017 | 195,101 | 435,311 | 387,007 |
Taxes other than income taxes | 58,651 | 57,642 | 117,815 | 114,780 |
Other expense | 2,141 | 688 | 2,161 | 1,298 |
Total | 995,247 | 938,423 | 1,880,167 | 1,832,661 |
OPERATING INCOME | 313,747 | 183,280 | 380,539 | 233,997 |
OTHER INCOME (DEDUCTIONS) | ||||
Allowance for equity funds used during construction | 8,910 | 13,034 | 19,202 | 28,095 |
Pension and other postretirement non-service credits - net (Note 5) | 12,877 | 10,474 | 24,445 | 20,339 |
Other income (Note 9) | 5,885 | 6,406 | 36,492 | 12,483 |
Other expense (Note 9) | (3,032) | (4,813) | (10,599) | (8,944) |
Total | 24,640 | 25,101 | 69,540 | 51,973 |
INTEREST EXPENSE | ||||
Interest charges | 108,891 | 93,832 | 208,665 | 181,951 |
Allowance for borrowed funds used during construction | (11,036) | (12,317) | (24,177) | (25,039) |
Total | 97,855 | 81,515 | 184,488 | 156,912 |
Income Before Income Taxes | 240,532 | 126,866 | 265,591 | 129,058 |
Income Taxes | 32,421 | 15,897 | 36,312 | 17,080 |
Net Income | 208,111 | 110,969 | 229,279 | 111,978 |
Less: Net income attributable to noncontrolling interests (Note 6) | 4,306 | 4,306 | 8,612 | 8,612 |
Net Income Attributable to Common Shareholders | $ 203,805 | $ 106,663 | $ 220,667 | $ 103,366 |
Weighted-average common shares outstanding - basic (in shares) | 113,695 | 113,411 | 113,658 | 113,385 |
Weighted-average common shares outstanding - diluted (in shares) | 115,803 | 113,717 | 115,015 | 113,657 |
Earnings Per Weighted-Average Common Share Outstanding | ||||
Net income attributable to common shareholders - basic (in dollars per share) | $ 1.79 | $ 0.94 | $ 1.94 | $ 0.91 |
Net income attributable to common shareholders - diluted (in dollars per share) | $ 1.76 | $ 0.94 | $ 1.92 | $ 0.91 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
NET INCOME | $ 208,111 | $ 110,969 | $ 229,279 | $ 111,978 |
OTHER COMPREHENSIVE LOSS, NET OF TAX | ||||
Derivative instruments net unrealized gain (loss), net of tax benefit (expense) of $131, $(147), $131 and $56 | (399) | 446 | (399) | (170) |
Pension and other postretirement benefit activity, net of tax benefit (expense) of $103, $165, $(82), $(4) | (313) | (501) | 249 | 14 |
Total other comprehensive income (loss) | (712) | (55) | (150) | (156) |
COMPREHENSIVE INCOME | 207,399 | 110,914 | 229,129 | 111,822 |
Less: Comprehensive income attributable to noncontrolling interests | 4,306 | 4,306 | 8,612 | 8,612 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 203,093 | $ 106,608 | $ 220,517 | $ 103,210 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Derivative instruments net unrealized gain (loss), net of tax benefit (expense) | $ 131 | $ (147) | $ 131 | $ 56 |
Pension and other postretirement benefit activity, net of tax benefit (expense) | $ 103 | $ 165 | $ (82) | $ (4) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 4,007 | $ 4,955 |
Customer and other receivables | 564,399 | 513,892 |
Accrued unbilled revenues (Note 2) | 314,718 | 167,553 |
Allowance for doubtful accounts (Note 2) | (15,826) | (22,433) |
Materials and supplies (at average cost) | 484,000 | 444,344 |
Income tax receivable | 0 | 332 |
Fossil fuel (at average cost) | 65,045 | 49,203 |
Assets from risk management activities (Note 7) | 760 | 6,808 |
Assets held for sale (Note 16) | 0 | 35,139 |
Deferred fuel and purchased power regulatory asset (Note 4) | 322,667 | 463,195 |
Other regulatory assets (Note 4) | 169,266 | 162,562 |
Other current assets | 139,563 | 101,417 |
Total current assets | 2,048,599 | 1,926,967 |
INVESTMENTS AND OTHER ASSETS | ||
Nuclear decommissioning trusts (Notes 11 and 12) | 1,245,593 | 1,201,246 |
Other special use funds (Notes 11 and 12) | 367,804 | 362,781 |
Other assets | 119,395 | 102,845 |
Total investments and other assets | 1,732,792 | 1,666,872 |
PROPERTY, PLANT AND EQUIPMENT | ||
Plant in service and held for future use | 25,013,171 | 24,211,167 |
Accumulated depreciation and amortization | (8,727,099) | (8,408,040) |
Net | 16,286,072 | 15,803,127 |
Construction work in progress | 1,477,727 | 1,724,004 |
Palo Verde sale leaseback, net of accumulated depreciation (Note 6) | 84,491 | 86,426 |
Intangible assets, net of accumulated amortization | 593,017 | 267,110 |
Nuclear fuel, net of accumulated amortization | 125,407 | 99,490 |
Total property, plant and equipment | 18,566,714 | 17,980,157 |
DEFERRED DEBITS | ||
Regulatory assets (Note 4) | 1,358,978 | 1,390,279 |
Operating lease right-of-use assets (Note 14) | 1,599,331 | 1,309,975 |
Assets for pension and other postretirement benefits (Note 5) | 339,071 | 323,438 |
Other | 55,645 | 63,465 |
Total deferred debits | 3,353,025 | 3,087,157 |
TOTAL ASSETS | 25,701,130 | 24,661,153 |
CURRENT LIABILITIES | ||
Accounts payable | 548,840 | 442,455 |
Accrued taxes | 201,214 | 166,833 |
Accrued interest | 76,652 | 72,916 |
Common dividends payable | 99,936 | 99,813 |
Short-term borrowings (Note 3) | 531,450 | 609,500 |
Current maturities of long-term debt (Note 3) | 1,000,000 | 875,000 |
Customer deposits | 41,558 | 42,037 |
Liabilities from risk management activities (Note 7) | 104,309 | 80,913 |
Liabilities for asset retirements (Note 15) | 37,306 | 28,550 |
Operating lease liabilities (Note 14) | 107,232 | 67,883 |
Regulatory liabilities (Note 4) | 230,551 | 209,923 |
Other current liabilities | 132,976 | 193,524 |
Total current liabilities | 3,112,024 | 2,889,347 |
LONG-TERM DEBT LESS CURRENT MATURITIES (Note 3) | 8,056,225 | 7,540,622 |
DEFERRED CREDITS AND OTHER | ||
Deferred income taxes | 2,440,175 | 2,416,480 |
Regulatory liabilities (Note 4) | 1,811,230 | 1,965,865 |
Liabilities for asset retirements (Note 15) | 1,103,417 | 937,451 |
Liabilities for pension benefits (Note 5) | 109,464 | 112,702 |
Liabilities from risk management activities (Note 7) | 26,364 | 42,975 |
Customer advances | 514,066 | 533,580 |
Coal mine reclamation | 186,451 | 184,007 |
Deferred investment tax credit | 253,661 | 257,743 |
Unrecognized tax benefits | 35,138 | 33,861 |
Operating lease liabilities (Note 14) | 1,515,169 | 1,210,189 |
Other | 221,424 | 251,469 |
Total deferred credits and other | 8,216,559 | 7,946,322 |
COMMITMENTS AND CONTINGENCIES (Note 8) | ||
EQUITY | ||
Common stock, no par value; authorized 150,000,000 shares, 113,711,763 and 113,537,689 issued at respective dates | 2,764,511 | 2,752,676 |
Treasury stock at cost; 101,641 and 113,272 shares at respective dates | (7,191) | (8,185) |
Total common stock | 2,757,320 | 2,744,491 |
Retained earnings | 3,487,113 | 3,466,317 |
Accumulated other comprehensive loss (Note 13) | (33,294) | (33,144) |
Total shareholder equity | 6,211,139 | 6,177,664 |
Noncontrolling interests (Note 6) | 105,183 | 107,198 |
Total equity | 6,316,322 | 6,284,862 |
TOTAL LIABILITIES AND EQUITY | $ 25,701,130 | $ 24,661,153 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Jun. 30, 2024 | Dec. 31, 2023 |
EQUITY | ||
Common stock, authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, issued (in shares) | 113,711,763 | 113,537,689 |
Treasury stock at cost (in shares) | 101,641 | 113,272 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 229,279 | $ 111,978 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Gain on sale relating to BCE | (22,988) | 0 |
Depreciation and amortization including nuclear fuel | 465,546 | 416,652 |
Deferred fuel and purchased power | (64,220) | (191,304) |
Deferred fuel and purchased power amortization | 204,748 | 218,586 |
Allowance for equity funds used during construction | (19,202) | (28,095) |
Deferred income taxes | 339 | (35,808) |
Deferred investment tax credit | (4,082) | 42,601 |
Change in derivative instruments fair value | 0 | (239) |
Stock compensation | 10,622 | 7,225 |
Changes in current assets and liabilities: | ||
Customer and other receivables | (57,802) | (24,748) |
Accrued unbilled revenues | (147,165) | (51,976) |
Materials, supplies and fossil fuel | (55,498) | (42,156) |
Income tax receivable | 332 | 9,847 |
Other current assets | (53,124) | (35,581) |
Accounts payable | 99,513 | (2,051) |
Accrued taxes | 34,381 | (644) |
Other current liabilities | (11,061) | (61,918) |
Change in long-term regulatory assets | 18,183 | 21,154 |
Change in long-term regulatory liabilities | (4,637) | 40,393 |
Change in other long-term assets | (43,489) | (125,735) |
Change in operating lease assets | 19,785 | 17,998 |
Change in other long-term liabilities | (45,456) | 121,352 |
Change in operating lease liabilities | (16,866) | 30,082 |
Net cash provided by operating activities | 537,138 | 437,613 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (1,051,725) | (918,195) |
Contributions in aid of construction | 144,329 | 60,118 |
Proceeds from sale relating to BCE | 47,778 | 0 |
Allowance for borrowed funds used during construction | (24,177) | (25,039) |
Proceeds from nuclear decommissioning trusts sales and other special use funds | 772,375 | 567,528 |
Investment in nuclear decommissioning trusts and other special use funds | (772,359) | (568,668) |
Other | (3,335) | 485 |
Net cash used for investing activities | (887,114) | (883,771) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Issuance of long-term debt | 1,313,229 | 689,247 |
Repayment of long-term debt | (675,000) | 0 |
Short-term borrowing and (repayments) - net | (78,050) | (35,370) |
Short-term debt borrowings under term loan facility | 350,000 | 0 |
Short-term debt repayments under term loan facility | (350,000) | 0 |
Dividends paid on common stock | (196,296) | (192,235) |
Common stock equity issuance and (purchases) - net | (4,227) | (2,031) |
Distributions to noncontrolling interests for capital activities | (10,628) | (10,627) |
Net cash provided by financing activities | 349,028 | 448,984 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (948) | 2,826 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4,955 | 4,832 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 4,007 | $ 7,658 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | |
Beginning balance (in shares) at Dec. 31, 2022 | 113,247,189 | ||||||
Beginning balance at Dec. 31, 2022 | $ 6,159,876 | $ 2,724,740 | $ (5,005) | $ 3,360,347 | $ (31,435) | $ 111,229 | |
Beginning balance (in shares) at Dec. 31, 2022 | (73,613) | ||||||
Increase (Decrease) in Shareholders' Equity | |||||||
Net income | 111,978 | 103,366 | 8,612 | ||||
Other comprehensive loss | (156) | (156) | |||||
Dividends on common stock | (195,981) | (195,981) | |||||
Issuance of common stock (in shares) | 139,705 | ||||||
Issuance of common stock | 11,372 | $ 11,372 | |||||
Purchase of treasury stock (in shares) | [1] | (34,675) | |||||
Purchase of treasury stock | [1] | (2,609) | $ (2,609) | ||||
Reissuance of treasury stock for stock-based compensation and other (in shares) | 32,521 | ||||||
Reissuance of treasury stock for stock-based compensation and other | 2,287 | $ 2,287 | |||||
Capital activities by noncontrolling interests | (10,628) | (10,628) | |||||
Other | (2) | (1) | (1) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 113,386,894 | ||||||
Ending balance at Jun. 30, 2023 | 6,076,137 | $ 2,736,112 | $ (5,328) | 3,267,731 | (31,591) | 109,213 | |
Ending balance (in shares) at Jun. 30, 2023 | (75,767) | ||||||
Beginning balance (in shares) at Mar. 31, 2023 | 113,359,467 | ||||||
Beginning balance at Mar. 31, 2023 | 6,164,451 | $ 2,730,851 | $ (7,451) | 3,357,052 | (31,536) | 115,535 | |
Beginning balance (in shares) at Mar. 31, 2023 | (106,141) | ||||||
Increase (Decrease) in Shareholders' Equity | |||||||
Net income | 110,969 | 106,663 | 4,306 | ||||
Other comprehensive loss | (55) | (55) | |||||
Dividends on common stock | (195,981) | (195,981) | |||||
Issuance of common stock (in shares) | 27,427 | ||||||
Issuance of common stock | 5,261 | $ 5,261 | |||||
Purchase of treasury stock (in shares) | [2] | (1,521) | |||||
Purchase of treasury stock | [2] | (119) | $ (119) | ||||
Reissuance of treasury stock for stock-based compensation and other (in shares) | 31,895 | ||||||
Reissuance of treasury stock for stock-based compensation and other | 2,242 | $ 2,242 | |||||
Capital activities by noncontrolling interests | (10,628) | (10,628) | |||||
Other | (3) | (3) | |||||
Ending balance (in shares) at Jun. 30, 2023 | 113,386,894 | ||||||
Ending balance at Jun. 30, 2023 | $ 6,076,137 | $ 2,736,112 | $ (5,328) | 3,267,731 | (31,591) | 109,213 | |
Ending balance (in shares) at Jun. 30, 2023 | (75,767) | ||||||
Beginning balance (in shares) at Dec. 31, 2023 | 113,537,689 | 113,537,689 | |||||
Beginning balance at Dec. 31, 2023 | $ 6,284,862 | $ 2,752,676 | $ (8,185) | 3,466,317 | (33,144) | 107,198 | |
Beginning balance (in shares) at Dec. 31, 2023 | (113,272) | (113,272) | |||||
Increase (Decrease) in Shareholders' Equity | |||||||
Net income | $ 229,279 | 220,667 | 8,612 | ||||
Other comprehensive loss | (150) | (150) | |||||
Dividends on common stock | (199,868) | (199,868) | |||||
Issuance of common stock (in shares) | [3] | 174,074 | |||||
Issuance of common stock | [3] | 11,835 | $ 11,835 | ||||
Purchase of treasury stock (in shares) | [1] | (71,008) | |||||
Purchase of treasury stock | [1] | (4,907) | $ (4,907) | ||||
Reissuance of treasury stock for stock-based compensation and other (in shares) | 82,639 | ||||||
Reissuance of treasury stock for stock-based compensation and other | 5,900 | $ 5,900 | |||||
Capital activities by noncontrolling interests | (10,628) | (10,628) | |||||
Other | $ (1) | 1 | (3) | 1 | |||
Ending balance (in shares) at Jun. 30, 2024 | 113,711,763 | 113,711,763 | |||||
Ending balance at Jun. 30, 2024 | $ 6,316,322 | $ 2,764,511 | $ (7,191) | 3,487,113 | (33,294) | 105,183 | |
Ending balance (in shares) at Jun. 30, 2024 | (101,641) | (101,641) | |||||
Beginning balance (in shares) at Mar. 31, 2024 | 113,686,849 | ||||||
Beginning balance at Mar. 31, 2024 | $ 6,310,533 | $ 2,757,506 | $ (9,073) | 3,483,178 | (32,582) | 111,504 | |
Beginning balance (in shares) at Mar. 31, 2024 | (128,234) | ||||||
Increase (Decrease) in Shareholders' Equity | |||||||
Net income | 208,111 | 203,805 | 4,306 | ||||
Other comprehensive loss | (712) | (712) | |||||
Dividends on common stock | (199,868) | (199,868) | |||||
Issuance of common stock (in shares) | [4] | 24,914 | |||||
Issuance of common stock | [4] | 7,005 | $ 7,005 | ||||
Reissuance of treasury stock for stock-based compensation and other (in shares) | 26,593 | ||||||
Reissuance of treasury stock for stock-based compensation and other | 1,882 | $ 1,882 | |||||
Capital activities by noncontrolling interests | (10,628) | (10,628) | |||||
Other | $ (1) | 0 | (2) | 1 | |||
Ending balance (in shares) at Jun. 30, 2024 | 113,711,763 | 113,711,763 | |||||
Ending balance at Jun. 30, 2024 | $ 6,316,322 | $ 2,764,511 | $ (7,191) | $ 3,487,113 | $ (33,294) | $ 105,183 | |
Ending balance (in shares) at Jun. 30, 2024 | (101,641) | (101,641) | |||||
[1] Primarily represents shares of common stock withheld from certain stock awards for tax purposes. Primarily represents shares of common stock withheld from certain stock awards for tax purposes. See Note 10 for information related to our equity forward sale agreements that were executed in February 2024. As of June 30, 2024, no common shares have been issued as part of this agreement. See Note 10 for information related to our equity forward sale agreements that were executed in February 2024. As of June 30, 2024, no common shares have been issued as part of this agreement. |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per common share (in dollars per share) | $ 1.76 | $ 1.73 | $ 1.76 | $ 1.73 |
ARIZONA PUBLIC SERVICE COMPANY
ARIZONA PUBLIC SERVICE COMPANY - CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
OPERATING REVENUES (Note 2) | $ 1,308,994 | $ 1,121,703 | $ 2,260,706 | $ 2,066,658 |
OPERATING EXPENSES | ||||
Fuel and purchased power | 437,172 | 407,754 | 795,036 | 802,258 |
Operations and maintenance | 272,266 | 277,238 | 529,844 | 527,318 |
Depreciation and amortization | 225,017 | 195,101 | 435,311 | 387,007 |
Taxes other than income taxes | 58,651 | 57,642 | 117,815 | 114,780 |
Other expense | 2,141 | 688 | 2,161 | 1,298 |
Total | 995,247 | 938,423 | 1,880,167 | 1,832,661 |
OPERATING INCOME | 313,747 | 183,280 | 380,539 | 233,997 |
OTHER INCOME (DEDUCTIONS) | ||||
Allowance for equity funds used during construction | 8,910 | 13,034 | 19,202 | 28,095 |
Pension and other postretirement non-service credits - net (Note 5) | 12,877 | 10,474 | 24,445 | 20,339 |
Other income (Note 9) | 5,885 | 6,406 | 36,492 | 12,483 |
Other expense (Note 9) | (3,032) | (4,813) | (10,599) | (8,944) |
Total | 24,640 | 25,101 | 69,540 | 51,973 |
INTEREST EXPENSE | ||||
Interest charges | 108,891 | 93,832 | 208,665 | 181,951 |
Allowance for borrowed funds used during construction | (11,036) | (12,317) | (24,177) | (25,039) |
Total | 97,855 | 81,515 | 184,488 | 156,912 |
Income Before Income Taxes | 240,532 | 126,866 | 265,591 | 129,058 |
Income Taxes | 32,421 | 15,897 | 36,312 | 17,080 |
Net Income | 208,111 | 110,969 | 229,279 | 111,978 |
Less: Net income attributable to noncontrolling interests (Note 6) | 4,306 | 4,306 | 8,612 | 8,612 |
Net Income Attributable to Common Shareholders | 203,805 | 106,663 | 220,667 | 103,366 |
APS | ||||
OPERATING REVENUES (Note 2) | 1,308,994 | 1,121,703 | 2,260,706 | 2,066,658 |
OPERATING EXPENSES | ||||
Fuel and purchased power | 437,172 | 407,754 | 795,036 | 802,258 |
Operations and maintenance | 272,674 | 272,339 | 526,267 | 518,517 |
Depreciation and amortization | 224,996 | 195,080 | 435,269 | 386,964 |
Taxes other than income taxes | 58,666 | 57,629 | 117,744 | 114,754 |
Other expense | 2,141 | 688 | 2,161 | 1,298 |
Total | 995,649 | 933,490 | 1,876,477 | 1,823,791 |
OPERATING INCOME | 313,345 | 188,213 | 384,229 | 242,867 |
OTHER INCOME (DEDUCTIONS) | ||||
Allowance for equity funds used during construction | 8,910 | 13,034 | 19,202 | 28,095 |
Pension and other postretirement non-service credits - net (Note 5) | 13,068 | 10,695 | 24,841 | 20,801 |
Other income (Note 9) | 4,591 | 5,691 | 11,446 | 10,767 |
Other expense (Note 9) | (2,894) | (4,135) | (5,788) | (6,752) |
Total | 23,675 | 25,285 | 49,701 | 52,911 |
INTEREST EXPENSE | ||||
Interest charges | 93,294 | 79,730 | 180,273 | 154,952 |
Allowance for borrowed funds used during construction | (11,036) | (9,739) | (24,177) | (20,896) |
Total | 82,258 | 69,991 | 156,096 | 134,056 |
Income Before Income Taxes | 254,762 | 143,507 | 277,834 | 161,722 |
Income Taxes | 38,655 | 20,264 | 42,304 | 23,510 |
Net Income | 216,107 | 123,243 | 235,530 | 138,212 |
Less: Net income attributable to noncontrolling interests (Note 6) | 4,306 | 4,306 | 8,612 | 8,612 |
Net Income Attributable to Common Shareholders | $ 211,801 | $ 118,937 | $ 226,918 | $ 129,600 |
ARIZONA PUBLIC SERVICE COMPAN_2
ARIZONA PUBLIC SERVICE COMPANY - CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
NET INCOME | $ 208,111 | $ 110,969 | $ 229,279 | $ 111,978 |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | ||||
Pension and other postretirement benefits activity, net of tax benefit (expense) of $101, $134, $(60) and $(16) | (313) | (501) | 249 | 14 |
Total other comprehensive income (loss) | (712) | (55) | (150) | (156) |
COMPREHENSIVE INCOME | 207,399 | 110,914 | 229,129 | 111,822 |
Less: Comprehensive income attributable to noncontrolling interests | 4,306 | 4,306 | 8,612 | 8,612 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | 203,093 | 106,608 | 220,517 | 103,210 |
APS | ||||
NET INCOME | 216,107 | 123,243 | 235,530 | 138,212 |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | ||||
Pension and other postretirement benefits activity, net of tax benefit (expense) of $101, $134, $(60) and $(16) | (307) | (408) | 183 | 49 |
Total other comprehensive income (loss) | (307) | (408) | 183 | 49 |
COMPREHENSIVE INCOME | 215,800 | 122,835 | 235,713 | 138,261 |
Less: Comprehensive income attributable to noncontrolling interests | 4,306 | 4,306 | 8,612 | 8,612 |
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ 211,494 | $ 118,529 | $ 227,101 | $ 129,649 |
ARIZONA PUBLIC SERVICE COMPAN_3
ARIZONA PUBLIC SERVICE COMPANY - CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pension and other postretirement benefits activity, net of tax benefit (expense) | $ 103 | $ 165 | $ (82) | $ (4) |
APS | ||||
Pension and other postretirement benefits activity, net of tax benefit (expense) | $ 101 | $ 134 | $ (60) | $ (16) |
ARIZONA PUBLIC SERVICE COMPAN_4
ARIZONA PUBLIC SERVICE COMPANY - CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
PROPERTY, PLANT AND EQUIPMENT | ||
Plant in service and held for future use | $ 25,013,171 | $ 24,211,167 |
Accumulated depreciation and amortization | (8,727,099) | (8,408,040) |
Net | 16,286,072 | 15,803,127 |
Construction work in progress | 1,477,727 | 1,724,004 |
Palo Verde sale leaseback, net of accumulated depreciation (Note 6) | 84,491 | 86,426 |
Intangible assets, net of accumulated amortization | 593,017 | 267,110 |
Nuclear fuel, net of accumulated amortization | 125,407 | 99,490 |
Total property, plant and equipment | 18,566,714 | 17,980,157 |
INVESTMENTS AND OTHER ASSETS | ||
Nuclear decommissioning trusts (Notes 11 and 12) | 1,245,593 | 1,201,246 |
Other special use funds (Notes 11 and 12) | 367,804 | 362,781 |
Other assets | 119,395 | 102,845 |
Total investments and other assets | 1,732,792 | 1,666,872 |
CURRENT ASSETS | ||
Cash and cash equivalents | 4,007 | 4,955 |
Customer and other receivables | 564,399 | 513,892 |
Accrued unbilled revenues (Note 2) | 314,718 | 167,553 |
Allowance for doubtful accounts (Note 2) | (15,826) | (22,433) |
Materials and supplies (at average cost) | 484,000 | 444,344 |
Fossil fuel (at average cost) | 65,045 | 49,203 |
Assets from risk management activities (Note 7) | 760 | 6,808 |
Deferred fuel and purchased power regulatory asset (Note 4) | 322,667 | 463,195 |
Other regulatory assets (Note 4) | 169,266 | 162,562 |
Other current assets | 139,563 | 101,417 |
Total current assets | 2,048,599 | 1,926,967 |
DEFERRED DEBITS | ||
Regulatory assets (Note 4) | 1,358,978 | 1,390,279 |
Operating lease right-of-use assets (Note 14) | 1,599,331 | 1,309,975 |
Assets for pension and other postretirement benefits (Note 5) | 339,071 | 323,438 |
Other | 55,645 | 63,465 |
Total deferred debits | 3,353,025 | 3,087,157 |
TOTAL ASSETS | 25,701,130 | 24,661,153 |
CAPITALIZATION | ||
Retained earnings | 3,487,113 | 3,466,317 |
Accumulated other comprehensive loss (Note 13) | (33,294) | (33,144) |
Total shareholder equity | 6,211,139 | 6,177,664 |
Noncontrolling interests (Note 6) | 105,183 | 107,198 |
Total equity | 6,316,322 | 6,284,862 |
Long-term debt less current maturities (Note 3) | 8,056,225 | 7,540,622 |
CURRENT LIABILITIES | ||
Short-term borrowings (Note 3) | 531,450 | 609,500 |
Accounts payable | 548,840 | 442,455 |
Accrued taxes | 201,214 | 166,833 |
Accrued interest | 76,652 | 72,916 |
Common dividends payable | 99,936 | 99,813 |
Customer deposits | 41,558 | 42,037 |
Liabilities from risk management activities (Note 7) | 104,309 | 80,913 |
Liabilities for asset retirements (Note 15) | 37,306 | 28,550 |
Operating lease liabilities (Note 14) | 107,232 | 67,883 |
Regulatory liabilities (Note 4) | 230,551 | 209,923 |
Other current liabilities | 132,976 | 193,524 |
Total current liabilities | 3,112,024 | 2,889,347 |
DEFERRED CREDITS AND OTHER | ||
Deferred income taxes | 2,440,175 | 2,416,480 |
Regulatory liabilities (Note 4) | 1,811,230 | 1,965,865 |
Liabilities for asset retirements (Note 15) | 1,103,417 | 937,451 |
Liabilities for pension benefits (Note 5) | 109,464 | 112,702 |
Liabilities from risk management activities (Note 7) | 26,364 | 42,975 |
Customer advances | 514,066 | 533,580 |
Coal mine reclamation | 186,451 | 184,007 |
Deferred investment tax credit | 253,661 | 257,743 |
Unrecognized tax benefits | 35,138 | 33,861 |
Operating lease liabilities (Note 14) | 1,515,169 | 1,210,189 |
Other | 221,424 | 251,469 |
Total deferred credits and other | 8,216,559 | 7,946,322 |
COMMITMENTS AND CONTINGENCIES (Note 8) | ||
TOTAL LIABILITIES AND EQUITY | 25,701,130 | 24,661,153 |
APS | ||
PROPERTY, PLANT AND EQUIPMENT | ||
Plant in service and held for future use | 25,009,775 | 24,207,706 |
Accumulated depreciation and amortization | (8,723,836) | (8,404,721) |
Net | 16,285,939 | 15,802,985 |
Construction work in progress | 1,477,727 | 1,724,004 |
Palo Verde sale leaseback, net of accumulated depreciation (Note 6) | 84,491 | 86,426 |
Intangible assets, net of accumulated amortization | 592,861 | 266,955 |
Nuclear fuel, net of accumulated amortization | 125,407 | 99,490 |
Total property, plant and equipment | 18,566,425 | 17,979,860 |
INVESTMENTS AND OTHER ASSETS | ||
Nuclear decommissioning trusts (Notes 11 and 12) | 1,245,593 | 1,201,246 |
Other special use funds (Notes 11 and 12) | 367,804 | 362,781 |
Other assets | 48,934 | 43,625 |
Total investments and other assets | 1,662,331 | 1,607,652 |
CURRENT ASSETS | ||
Cash and cash equivalents | 3,865 | 4,549 |
Customer and other receivables | 555,991 | 510,296 |
Accrued unbilled revenues (Note 2) | 314,718 | 167,553 |
Allowance for doubtful accounts (Note 2) | (15,826) | (22,433) |
Materials and supplies (at average cost) | 484,000 | 444,344 |
Fossil fuel (at average cost) | 65,045 | 49,203 |
Assets from risk management activities (Note 7) | 760 | 6,808 |
Deferred fuel and purchased power regulatory asset (Note 4) | 322,667 | 463,195 |
Other regulatory assets (Note 4) | 169,266 | 162,562 |
Other current assets | 97,761 | 64,311 |
Total current assets | 1,998,247 | 1,850,388 |
DEFERRED DEBITS | ||
Regulatory assets (Note 4) | 1,358,978 | 1,390,279 |
Operating lease right-of-use assets (Note 14) | 1,598,093 | 1,308,611 |
Assets for pension and other postretirement benefits (Note 5) | 332,117 | 316,606 |
Other | 55,273 | 63,059 |
Total deferred debits | 3,344,461 | 3,078,555 |
TOTAL ASSETS | 25,571,464 | 24,516,455 |
CAPITALIZATION | ||
Common stock | 178,162 | 178,162 |
Additional paid-in capital | 3,771,696 | 3,321,696 |
Retained earnings | 3,786,315 | 3,759,299 |
Accumulated other comprehensive loss (Note 13) | (17,036) | (17,219) |
Total shareholder equity | 7,719,137 | 7,241,938 |
Noncontrolling interests (Note 6) | 105,183 | 107,198 |
Total equity | 7,824,320 | 7,349,136 |
Long-term debt less current maturities (Note 3) | 7,189,052 | 7,041,891 |
Total capitalization | 15,013,372 | 14,391,027 |
CURRENT LIABILITIES | ||
Short-term borrowings (Note 3) | 455,700 | 532,850 |
Current maturities of long-term debt (Note 3) | 300,000 | 250,000 |
Accounts payable | 540,134 | 433,229 |
Accrued taxes | 222,602 | 162,288 |
Accrued interest | 73,325 | 72,548 |
Common dividends payable | 100,000 | 99,800 |
Customer deposits | 41,558 | 42,037 |
Liabilities from risk management activities (Note 7) | 104,309 | 80,913 |
Liabilities for asset retirements (Note 15) | 37,306 | 28,550 |
Operating lease liabilities (Note 14) | 107,043 | 67,608 |
Regulatory liabilities (Note 4) | 230,551 | 209,923 |
Other current liabilities | 138,081 | 211,773 |
Total current liabilities | 2,350,609 | 2,191,519 |
DEFERRED CREDITS AND OTHER | ||
Deferred income taxes | 2,443,350 | 2,431,697 |
Regulatory liabilities (Note 4) | 1,811,230 | 1,965,865 |
Liabilities for asset retirements (Note 15) | 1,103,417 | 937,451 |
Liabilities for pension benefits (Note 5) | 104,089 | 106,215 |
Liabilities from risk management activities (Note 7) | 26,364 | 42,975 |
Customer advances | 514,066 | 533,580 |
Coal mine reclamation | 186,451 | 184,007 |
Deferred investment tax credit | 253,661 | 257,743 |
Unrecognized tax benefits | 46,728 | 33,861 |
Operating lease liabilities (Note 14) | 1,513,905 | 1,208,857 |
Other | 204,222 | 231,658 |
Total deferred credits and other | 8,207,483 | 7,933,909 |
COMMITMENTS AND CONTINGENCIES (Note 8) | ||
TOTAL LIABILITIES AND EQUITY | $ 25,571,464 | $ 24,516,455 |
ARIZONA PUBLIC SERVICE COMPAN_5
ARIZONA PUBLIC SERVICE COMPANY - CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 229,279 | $ 111,978 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization including nuclear fuel | 465,546 | 416,652 |
Deferred fuel and purchased power | (64,220) | (191,304) |
Deferred fuel and purchased power amortization | 204,748 | 218,586 |
Allowance for equity funds used during construction | (19,202) | (28,095) |
Deferred income taxes | 339 | (35,808) |
Deferred investment tax credit | (4,082) | 42,601 |
Changes in current assets and liabilities: | ||
Customer and other receivables | (57,802) | (24,748) |
Accrued unbilled revenues | (147,165) | (51,976) |
Materials, supplies and fossil fuel | (55,498) | (42,156) |
Other current assets | (53,124) | (35,581) |
Accounts payable | 99,513 | (2,051) |
Accrued taxes | 34,381 | (644) |
Other current liabilities | (11,061) | (61,918) |
Change in long-term regulatory assets | 18,183 | 21,154 |
Change in long-term regulatory liabilities | (4,637) | 40,393 |
Change in other long-term assets | (43,489) | (125,735) |
Change in operating lease assets | 19,785 | 17,998 |
Change in other long-term liabilities | (45,456) | 121,352 |
Change in operating lease liabilities | (16,866) | 30,082 |
Net cash provided by operating activities | 537,138 | 437,613 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (1,051,725) | (918,195) |
Contributions in aid of construction | 144,329 | 60,118 |
Allowance for borrowed funds used during construction | (24,177) | (25,039) |
Proceeds from nuclear decommissioning trusts sales and other special use funds | 772,375 | 567,528 |
Investment in nuclear decommissioning trusts and other special use funds | (772,359) | (568,668) |
Other | (3,335) | 485 |
Net cash used for investing activities | (887,114) | (883,771) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Issuance of long-term debt | 1,313,229 | 689,247 |
Repayment of long-term debt | (675,000) | 0 |
Short-term borrowing and (repayments) - net | (78,050) | (35,370) |
Short-term debt repayments under term loan facility | (350,000) | 0 |
Short-term debt borrowings under term loan facility | 350,000 | 0 |
Dividends paid on common stock | (196,296) | (192,235) |
Distributions to noncontrolling interests for capital activities | (10,628) | (10,627) |
Net cash provided by financing activities | 349,028 | 448,984 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (948) | 2,826 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4,955 | 4,832 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 4,007 | 7,658 |
APS | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | 235,530 | 138,212 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization including nuclear fuel | 465,504 | 416,609 |
Deferred fuel and purchased power | (64,220) | (191,304) |
Deferred fuel and purchased power amortization | 204,748 | 218,586 |
Allowance for equity funds used during construction | (19,202) | (28,095) |
Deferred income taxes | (257) | (27,415) |
Deferred investment tax credit | (4,082) | 42,601 |
Changes in current assets and liabilities: | ||
Customer and other receivables | (52,990) | (24,952) |
Accrued unbilled revenues | (147,165) | (51,976) |
Materials, supplies and fossil fuel | (55,498) | (42,156) |
Other current assets | (21,506) | (39,607) |
Accounts payable | 98,992 | 1,175 |
Accrued taxes | 60,314 | 11,298 |
Other current liabilities | (27,078) | (61,748) |
Change in long-term regulatory assets | 18,183 | 21,154 |
Change in long-term regulatory liabilities | (4,637) | 40,393 |
Change in other long-term assets | (69,075) | (123,808) |
Change in operating lease assets | 19,659 | 17,841 |
Change in other long-term liabilities | (46,992) | 118,465 |
Change in operating lease liabilities | (16,798) | 30,247 |
Net cash provided by operating activities | 573,430 | 465,520 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Capital expenditures | (1,051,727) | (902,554) |
Contributions in aid of construction | 144,329 | 60,118 |
Allowance for borrowed funds used during construction | (24,177) | (20,896) |
Proceeds from nuclear decommissioning trusts sales and other special use funds | 772,375 | 567,528 |
Investment in nuclear decommissioning trusts and other special use funds | (772,359) | (568,668) |
Other | (919) | (786) |
Net cash used for investing activities | (932,478) | (865,258) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Issuance of long-term debt | 445,842 | 496,025 |
Repayment of long-term debt | (250,000) | 0 |
Short-term borrowing and (repayments) - net | (77,150) | (40,000) |
Short-term debt repayments under term loan facility | (350,000) | 0 |
Short-term debt borrowings under term loan facility | 350,000 | 0 |
Equity infusion | 450,000 | 150,000 |
Dividends paid on common stock | (199,700) | (195,900) |
Distributions to noncontrolling interests for capital activities | (10,628) | (10,627) |
Net cash provided by financing activities | 358,364 | 399,498 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (684) | (240) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4,549 | 4,042 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 3,865 | $ 3,802 |
ARIZONA PUBLIC SERVICE COMPAN_6
ARIZONA PUBLIC SERVICE COMPANY - CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | APS | APS Common Stock | APS Additional Paid-In Capital | APS Retained Earnings | APS Accumulated Other Comprehensive Income (Loss) | APS Noncontrolling Interests |
Beginning balance (in shares) at Dec. 31, 2022 | 113,247,189 | 71,264,947 | |||||||||
Beginning balance at Dec. 31, 2022 | $ 6,159,876 | $ 2,724,740 | $ 3,360,347 | $ (31,435) | $ 111,229 | $ 7,052,955 | $ 178,162 | $ 3,171,696 | $ 3,607,464 | $ (15,596) | $ 111,229 |
Increase (Decrease) in Shareholders' Equity | |||||||||||
Equity infusion from Pinnacle West | 150,000 | 150,000 | |||||||||
Net income | 111,978 | 103,366 | 8,612 | 138,212 | 129,600 | 8,612 | |||||
Other comprehensive (loss) income | (156) | (156) | 49 | 49 | |||||||
Dividends on common stock | (195,981) | (195,981) | (196,000) | (196,000) | |||||||
Capital activities by noncontrolling interests | (10,628) | (10,628) | (10,628) | (10,628) | |||||||
Other | (2) | (1) | (2) | (2) | |||||||
Ending balance (in shares) at Jun. 30, 2023 | 113,386,894 | 71,264,947 | |||||||||
Ending balance at Jun. 30, 2023 | 6,076,137 | $ 2,736,112 | 3,267,731 | (31,591) | 109,213 | 7,134,586 | $ 178,162 | 3,321,696 | 3,541,062 | (15,547) | 109,213 |
Beginning balance (in shares) at Mar. 31, 2023 | 113,359,467 | 71,264,947 | |||||||||
Beginning balance at Mar. 31, 2023 | 6,164,451 | $ 2,730,851 | 3,357,052 | (31,536) | 115,535 | 7,218,379 | $ 178,162 | 3,321,696 | 3,618,125 | (15,139) | 115,535 |
Increase (Decrease) in Shareholders' Equity | |||||||||||
Net income | 110,969 | 106,663 | 4,306 | 123,243 | 118,937 | 4,306 | |||||
Other comprehensive (loss) income | (55) | (55) | (408) | (408) | |||||||
Dividends on common stock | (195,981) | (195,981) | (196,000) | (196,000) | |||||||
Capital activities by noncontrolling interests | (10,628) | (10,628) | (10,628) | (10,628) | |||||||
Other | (3) | (3) | |||||||||
Ending balance (in shares) at Jun. 30, 2023 | 113,386,894 | 71,264,947 | |||||||||
Ending balance at Jun. 30, 2023 | $ 6,076,137 | $ 2,736,112 | 3,267,731 | (31,591) | 109,213 | 7,134,586 | $ 178,162 | 3,321,696 | 3,541,062 | (15,547) | 109,213 |
Beginning balance (in shares) at Dec. 31, 2023 | 113,537,689 | 113,537,689 | 71,264,947 | ||||||||
Beginning balance at Dec. 31, 2023 | $ 6,284,862 | $ 2,752,676 | 3,466,317 | (33,144) | 107,198 | 7,349,136 | $ 178,162 | 3,321,696 | 3,759,299 | (17,219) | 107,198 |
Increase (Decrease) in Shareholders' Equity | |||||||||||
Equity infusion from Pinnacle West | 450,000 | 450,000 | |||||||||
Net income | 229,279 | 220,667 | 8,612 | 235,530 | 226,918 | 8,612 | |||||
Other comprehensive (loss) income | (150) | (150) | 183 | 183 | |||||||
Dividends on common stock | (199,868) | (199,868) | (199,900) | (199,900) | |||||||
Capital activities by noncontrolling interests | (10,628) | (10,628) | (10,628) | (10,628) | |||||||
Other | $ (1) | (3) | 1 | (1) | (2) | 1 | |||||
Ending balance (in shares) at Jun. 30, 2024 | 113,711,763 | 113,711,763 | 71,264,947 | ||||||||
Ending balance at Jun. 30, 2024 | $ 6,316,322 | $ 2,764,511 | 3,487,113 | (33,294) | 105,183 | 7,824,320 | $ 178,162 | 3,771,696 | 3,786,315 | (17,036) | 105,183 |
Beginning balance (in shares) at Mar. 31, 2024 | 113,686,849 | 71,264,947 | |||||||||
Beginning balance at Mar. 31, 2024 | 6,310,533 | $ 2,757,506 | 3,483,178 | (32,582) | 111,504 | 7,369,047 | $ 178,162 | 3,321,696 | 3,774,414 | (16,729) | 111,504 |
Increase (Decrease) in Shareholders' Equity | |||||||||||
Equity infusion from Pinnacle West | 450,000 | 450,000 | |||||||||
Net income | 208,111 | 203,805 | 4,306 | 216,107 | 211,801 | 4,306 | |||||
Other comprehensive (loss) income | (712) | (712) | (307) | (307) | |||||||
Dividends on common stock | (199,868) | (199,868) | (199,900) | (199,900) | |||||||
Capital activities by noncontrolling interests | (10,628) | (10,628) | (10,628) | (10,628) | |||||||
Other | $ (1) | (2) | 1 | 1 | 1 | ||||||
Ending balance (in shares) at Jun. 30, 2024 | 113,711,763 | 113,711,763 | 71,264,947 | ||||||||
Ending balance at Jun. 30, 2024 | $ 6,316,322 | $ 2,764,511 | $ 3,487,113 | $ (33,294) | $ 105,183 | $ 7,824,320 | $ 178,162 | $ 3,771,696 | $ 3,786,315 | $ (17,036) | $ 105,183 |
Consolidation and Nature of Ope
Consolidation and Nature of Operations | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation and Nature of Operations | Consolidation and Nature of Operations The unaudited condensed consolidated financial statements include the accounts of Pinnacle West and our subsidiaries: APS, El Dorado Investment Company (“El Dorado”), and Pinnacle West Power, LLC (“PNW Power”). Intercompany accounts and transactions between the consolidated companies have been eliminated. The unaudited condensed consolidated financial statements for APS include the accounts of APS and the Palo Verde Generating Station (“Palo Verde”) sale leaseback variable interest entities (“VIEs”). See Note 6 for further discussion. PNW Power is a wholly-owned subsidiary that was created in September 2023 to hold certain investments in wind and transmission joint projects that were previously held in Bright Canyon Energy Corporation (“BCE”). See Note 16 for additional information. 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. BCE was a Pinnacle West subsidiary that was formed in 2014. On August 4, 2023, Pinnacle West entered into a purchase and sale agreement pursuant to which all of our equity interest in BCE was sold. The sale was completed on January 12, 2024. See Note 16 for more information relating to the sale of BCE. Amounts reported in our interim Condensed Consolidated Statements of Income are not necessarily indicative of amounts expected for the respective annual periods, due to the effects of seasonal temperature variations on energy consumption, timing of maintenance on electric generating units, and other factors. Our condensed 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. Certain information and footnote disclosures normally included in financial statements prepared in conformity with GAAP have been condensed or omitted pursuant to such regulations, although we believe that the disclosures provided are adequate to make the interim information presented not misleading. The accompanying condensed consolidated financial statements and these notes should be read in conjunction with the audited consolidated financial statements and notes included in our 2023 Form 10-K. Supplemental Cash Flow Information The following table summarizes supplemental Pinnacle West cash flow information (dollars in thousands): Six Months Ended 2024 2023 Cash paid during the period for: Income taxes, net of refunds $ 25,019 $ 17 Interest, net of amounts capitalized 177,323 154,477 Significant non-cash investing and financing activities: Accrued capital expenditures 214,182 148,433 Dividends accrued but not yet paid 99,936 98,014 BCE Sale non-cash consideration (Note 16) 36,510 — Six Months Ended 2024 2023 Cash paid during the period for: Income taxes, net of refunds $ 9,729 $ 94 Interest, net of amounts capitalized 152,535 134,107 Significant non-cash investing and financing activities: Accrued capital expenditures 214,182 151,453 Dividends accrued but not yet paid 100,000 98,000 |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2024 | |
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): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Retail Electric Service Residential $ 658,158 $ 542,315 $ 1,090,850 $ 952,039 Non-Residential 609,871 516,712 1,071,354 922,849 Wholesale Energy Sales 10,261 27,282 37,125 122,885 Transmission Services for Others 27,541 33,152 55,253 64,943 Other Sources 3,163 2,242 6,124 3,942 Total Operating Revenues $ 1,308,994 $ 1,121,703 $ 2,260,706 $ 2,066,658 Retail Electric Revenue. All of Pinnacle West’s retail electric revenue is generated by APS. Retail electric revenue is generated by the 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 21 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 the U.S. Federal Energy Regulatory Commission (“FERC”). In the electricity business, some contracts to purchase energy are settled by netting against other contracts to sell electricity. This is referred to as a book-out, and usually occurs in contracts that have the same terms (product type, quantities, and delivery points) and for which power does not flow. We net these book-outs, which reduces both wholesale revenues and fuel and purchased power costs. 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 three and six months ended June 30, 2024 were $1,303 million and $2,246 million, respectively, and for the three and six months ended June 30, 2023 were $1,112 million and $2,034 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 three and six months ended June 30, 2024, our revenues that do not qualify as revenue from contracts with customers were $6 million and $15 million, respectively, and for the three and six months ended June 30, 2023 were $10 million and $33 million, respectively. This amount includes revenues related 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 Condensed Consolidated Balance Sheets as of June 30, 2024 or December 31, 2023. 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. We continue to monitor the impacts of our disconnection policies, payment arrangements, among other considerations impacting our estimated write-off factor, and allowance for doubtful accounts. The following table provides a rollforward of Pinnacle West’s allowance for doubtful accounts (dollars in thousands): June 30, 2024 December 31, 2023 Allowance for doubtful accounts, balance at beginning of period $ 22,433 $ 23,778 Bad debt expense 11,512 23,399 Actual write-offs (18,119) (24,744) Allowance for doubtful accounts, balance at end of period $ 15,826 $ 22,433 |
Long-Term Debt and Liquidity Ma
Long-Term Debt and Liquidity Matters | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Liquidity Matters | Long-Term Debt and Liquidity Matters 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. Pinnacle West On April 10, 2023, Pinnacle West replaced its $200 million revolving credit facility that would have matured on May 28, 2026, with a new $200 million revolving credit facility that matures on April 10, 2028. Pinnacle West has the option to increase the amount of the facility up to a total 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 and the agreement includes a sustainability-linked pricing metric which permits an interest rate reduction or increase by meeting or missing targets related to specific environmental and employee health and safety sustainability objectives. The facility is available to support Pinnacle West’s general corporate purposes, including support for Pinnacle West’s $200 million commercial paper program, for bank borrowings or for issuances of letters of credit. At June 30, 2024, Pinnacle West had no outstanding borrowings under its revolving credit facility, no letters of credit outstanding under the credit facility, and $76 million of outstanding commercial paper borrowings. The weighted-average interest rate for the outstanding borrowings on June 30, 2024, was 5.46%. On February 28, 2024, Pinnacle West entered into various equity forward sale agreements (the “Equity Forward Sale Agreements”), which may be settled with Pinnacle West common stock or cash. At June 30, 2024, Pinnacle West could have settled the Equity Forward Sale Agreements with the issuance of 11,240,601 shares of common stock, which would have provided cash liquidity to Pinnacle West of $726 million. See Note 10. Convertible Senior Notes. In June 2024, Pinnacle West issued $525 million of 4.75% convertible senior notes due 2027 (the “Convertible Notes”), which are senior unsecured obligations of Pinnacle West, and will mature on June 15, 2027. The Convertible Notes bear interest at a fixed rate of 4.75% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2024. Proceeds from the Convertible Notes were used to repay APS’s 364-day $350 million term loan facility that matures on December 10, 2024 and commercial paper borrowings. Prior to March 15, 2027, the holders of the Convertible Notes may elect at their option to convert all or any portion of their Convertible Notes under the following limited circumstances: • during any calendar quarter (and only during such calendar quarter), if the sale price of Pinnacle West common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter, is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any 10 consecutive trading day period (“Measurement Period”) in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of Pinnacle West common stock and the conversion rate on such trading day; or • upon the occurrence of certain corporate events, as defined in the Convertible Notes’ indenture. On or after March 15, 2027, until the maturity date, the holders of the Convertible Notes may elect at their option to convert all or any portion of their notes. Upon conversion, Pinnacle West will pay cash up to the aggregate principal amount of the Convertible Notes converted and at Pinnacle West’s sole discretion, pay or deliver cash, shares of Pinnacle West common stock or a combination of both, in respect to the remainder, if any, of Pinnacle West’s conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted. At June 30, 2024, the initial conversion rate, which is subject to certain adjustments as set forth in the indenture, is 10.8338 shares of common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $92.30 per share of Pinnacle West’s common stock. The conversion rate is not subject to adjustment for any accrued and unpaid interest. If Pinnacle West undergoes a fundamental change, as defined in the Convertible Notes’ indenture, then, subject to certain conditions, holders of the Convertible Notes may require Pinnacle West to repurchase for cash all or any portion of its Convertible Notes at a repurchase price equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. As of June 30, 2024, the conditions allowing holders to convert their Convertible Notes, were not met, and as a result, the Convertible Notes were classified as long term debt on Pinnacle West’s Condensed Consolidated Balance Sheet with a carrying amount of $518 million, including unamortized debt issuance costs of $7 million. The estimated fair value of the Convertible Notes as of June 30, 2024 was $530 million (Level 2 within the fair value hierarchy). As of June 30, 2024, based on Pinnacle West’s average stock price and the relevant terms of the Convertible Notes, there were no shares of Pinnacles West’s common stock included in basic or diluted EPS relating to the potential conversion of the Convertible Notes. See Note 10. Floating Rate Notes. Additionally, in June 2024, Pinnacle West completed the sale of $350 million Floating Rate Notes due 2026 (the “Floating Rate Notes”). The Floating Rate Notes are senior unsecured obligations of Pinnacle West and will mature on June 10, 2026. The Floating Rate Notes bear a variable interest rate of Compounded SOFR plus 82 basis points per year. Proceeds were used to repay a portion of Pinnacle West’s $450 million term loan maturing in December 2024 and the full amount of Pinnacle West’s $175 million term loan maturing in December 2024. On June 6, 2024, Pinnacle West repaid $250 million of its $450 million term loan which matures in December 2024. APS On April 10, 2023, APS replaced its two $500 million revolving credit facilities that would have matured on May 28, 2026, with a new $1.25 billion revolving credit facility that matures on April 10, 2028. APS has the option to increase the amount of the facility by up to a maximum of $400 million, for a total of $1.65 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 and the agreement includes a sustainability-linked pricing metric which permits an interest rate reduction or increase by meeting or missing targets related to specific environmental and employee health and safety sustainability objectives. The facility is available to support APS’s general corporate purposes, including support for APS’s commercial paper program, which was increased from $750 million to $1 billion on April 10, 2023, for bank borrowings or for issuances of letters of credit. At June 30, 2024, APS had no outstanding borrowings under its revolving credit facility, no letters of credit outstanding under the credit facility, and $456 million of outstanding commercial paper borrowings. The weighted-average interest rate for the outstanding borrowings on June 30, 2024, was 5.43%. APS is currently authorized to receive up to $150 million annually in equity infusions from Pinnacle West without seeking ACC approval. On October 27, 2023, APS sought approval from the ACC to receive from Pinnacle West in 2024 up to an additional $500 million in equity infusions above the authorized limit of $150 million, and the ACC approved the increased equity infusion limit for 2024 on January 9, 2024, and subsequently issued the order on January 24, 2024. On June 12, 2024, Pinnacle West contributed $450 million into APS in the form of an equity infusion. APS used this contribution to repay short-term indebtedness. On December 15, 2022, the ACC issued a financing order reaffirming the previous short-term debt authorization equal to the 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) and approving APS’s application filed April 6, 2022 requesting to increase the long-term debt limit from $7.5 billion to $8.0 billion and to exclude financing lease power purchase agreements (“PPAs”) from the definition of long-term debt for purposes of the ACC financing orders. On April 19, 2024, APS submitted an application to the ACC requesting to further increase the long-term debt limit from $8.0 billion to $9.5 billion and to increase Pinnacle West’s permitted yearly equity infusions to equal up to 2.5% of Pinnacle West’s consolidated assets each calendar year on a three-year rolling average basis. APS cannot predict the outcome of this matter. On December 12, 2023, APS entered into an agreement for a new 364-day $350 million term loan facility that matures on December 10, 2024. Borrowings under the facility bear interest at SOFR annum. On February 9, 2024, APS drew the full amount of $350 million, which APS subsequently paid off in full on June 6, 2024. On May 9, 2024, APS issued $450 million of 5.7% senior unsecured notes that mature August 15, 2034. The net proceeds from the sale were used to repay short-term indebtedness consisting of commercial paper and for general corporate purposes. On June 17, 2024, APS repaid its $250 million 3.35% senior unsecured notes at maturity from commercial paper borrowings. See “Financial Assurances” in Note 8 for a discussion of other outstanding letters of credit. Debt Fair Value Our long-term debt fair value estimates are classified within Level 2 of the fair value hierarchy. The following table presents the estimated fair value of our long-term debt, including current maturities (dollars in thousands): As of June 30, 2024 As of December 31, 2023 Carrying Fair Value Carrying Fair Value Pinnacle West $ 1,567,173 $ 1,558,831 $ 1,123,731 $ 1,095,935 APS 7,489,052 6,486,298 7,291,891 6,459,718 Total $ 9,056,225 $ 8,045,129 $ 8,415,622 $ 7,555,653 |
Regulatory Matters
Regulatory Matters | 6 Months Ended |
Jun. 30, 2024 | |
Regulated Operations [Abstract] | |
Regulatory Matters | Regulatory Matters 2022 Retail Rate Case APS filed an application with the ACC on October 28, 2022 (the “2022 Rate Case”) seeking an increase in annual retail base rates on the date rates become effective (“Day 1”) of a net $460 million. This Day 1 net impact would have represented a total base revenue deficiency of $772 million, offset by proposed adjustor transfers of cost recovery to annual retail rates and adjustor mechanism modifications. The average annual customer bill impact of APS’s request on Day 1 would have been an increase of 13.6%. The principal provisions of APS’s application were: • a test year comprised of twelve months ended June 30, 2022, adjusted as described below; • an original cost rate base of $10.5 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 48.07 % 3.85 % Common stock equity 51.93 % 10.25 % Weighted-average cost of capital 7.17 % • 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 $0.038321 per kWh for the portion of APS’s retail base rates attributable to fuel and purchased power costs (“Base Fuel Rate”); • modification of its adjustment mechanisms including: ▪ eliminate the Environmental Improvement Surcharge (“EIS”) and collect costs through base rates, ▪ eliminate the Lost Fixed Cost Recovery (“LFCR”) mechanism and collect costs through base rates and the Demand Side Management (“DSM”) Adjustment Charge (“DSMAC”), ▪ maintain as inactive the Tax Expense Adjustor Mechanism (“TEAM”), ▪ maintain the Transmission Cost Adjustment (“TCA”) mechanism, ▪ modify the performance incentive in the DSMAC, and ▪ modify the Renewable Energy Adjustment Charge (“REAC”) to include recovery of capital carrying costs of APS owned renewable and storage resources; • changes to its limited-income program, including a second tier to provide an additional discount for customers with greater need; and • twelve months of post-test year plant investments to reflect used and useful projects that will be placed into service prior to July 1, 2023. On June 5, 2023, and June 15, 2023, the ACC Staff, the Residential Utility Consumer Office (“RUCO”) and other intervenors filed their initial written testimony with the ACC. The ACC Staff recommended, among other things, (i) a $251 million revenue increase or, as an alternative, a $312 million revenue increase, (ii) a 9.6% return on equity, (iii) a 0.0% fair value increment or, as an alternative, a 0.75% fair value increment, and (iv) a continuation of a 12-month post-test year plant. RUCO recommended, among other things, (i) an $84.9 million revenue increase, (ii) an 8.2% return on equity or, as an alternative, an 8.7% return on equity if the ACC imputes a hypothetical capital structure with a 46% equity layer, (iii) a fair value increment of 0.0%, and (iv) a reduction of post-test year plant to six months. On July 12, 2023, APS filed rebuttal testimony addressing the ACC Staff and intervenors’ direct testimonies. The principal provisions of APS’s rebuttal testimony were: • reducing the revenue requirement increase to $383.1 million, which reduced the average annual customer bill impact to an increase of 11.3%; • maintaining a return on equity request of 10.25%; • reducing the increment of fair value rate base return to 0.5% from 1.0%; • maintaining a post-test year plant request of 12 months, plus the Four Corners Power Plant (“Four Corners”) Effluent Limitation Guidelines (“ELG”) project; • withdrawing the Payment Fee Removal Proposal (net reduction) which was originally requested in APS’s initial application; • maintaining the LFCR mechanism and DSMAC as separate adjustors; • increasing the Power Supply Adjustment (“PSA”) annual rate change limit from $0.004/kWh to $0.006/kWh; • proposing a new System Reliability Benefit (“SRB”) recovery mechanism; • maintaining the REAC in its current state; • maintaining adjustor base transfers and elimination of EIS; and • maintaining the request to recover Coal Community Transition (“CCT”) funding. On July 26, 2023, the ACC Staff, RUCO and other intervenors filed their surrebuttal testimony with the ACC. The ACC Staff adjusted their initial recommendations to, among other things, (i) a $281.9 million revenue increase, (ii) a 9.68% return on equity, (iii) a 0.5% fair value increment, (iv) a continuation of a 12-month post-test year plant that includes the Four Corners ELG project, and (v) support of an increase to the annual PSA increase limit to $0.006/kWh. RUCO maintained their direct position and also recommended further review of the PSA in a second phase of the 2022 Rate Case. On August 4, 2023, APS filed rejoinder testimony addressing the ACC Staff and intervenors’ surrebuttal testimonies. APS’s rejoinder testimony included final post-test year plant values, reducing the revenue requirement increase to $377.7 million from $383.1 million, which reduced the average annual customer bill impact to an increase of 11.2%. All other major provisions from APS’s rebuttal testimony were maintained in its rejoinder testimony. On November 6, 2023, and November 21, 2023, APS and stakeholders filed briefs in the 2022 Rate Case. APS’s briefs included the reduction of the total revenue requirement increase to $376.2 million and a resulting average annual customer bill impact increase of 11.1%. All other major provisions from APS’s rejoinder testimony were maintained in its briefs. ACC Staff’s briefs included a proposed total revenue requirement increase from $281.9 million to $282.7 million and also included their support of APS’s SRB mechanism, contingent on increased stakeholder outreach. On January 25, 2024, an Administrative Law Judge issued a Recommended Opinion and Order in the 2022 Rate Case, as corrected on February 6, 2024 (the “2022 Rate Case ROO”). The 2022 Rate Case ROO recommended, among other things, (i) a $523.1 million increase in the annual base rate revenue requirement, (ii) a 9.55% return on equity, (iii) a 0.25% return on the increment of fair value rate base greater than original cost, (iv) an effective fair value rate of return of 4.36%, (v) 12 months of post-test year plant and the inclusion of the Four Corners ELG project, (vi) the approval of APS’s SRB proposal with certain procedural and other modifications, (vii) no additional CCT funding, (viii) a 5.0% return on the prepaid pension asset and a return of 5.35% on the OPEB liability, and (ix) no disallowances on APS’s coal contracts. The 2022 Rate Case ROO also recommended a number of changes to existing adjustors, including (i) the approval of modified DSM performance incentives and the requested DSM transfer to base rates, (ii) the retention of $1.9 million of REAC in the adjustor rather than base rates, (iii) a partial transfer of $27.1 million of LFCR funds to base rates, and (iv) the adoption of an increase in the annual PSA cap to $0.006/kWh. On February 22, 2024, the ACC approved a number of amendments to the 2022 Rate Case ROO that resulted in, among other things, (i) an approximately $491.7 million increase in the annual base revenue requirement, (ii) a 9.55% return on equity, (iii) a 0.25% return on the increment of fair value rate base greater than original cost, (iv) an effective fair value rate of return of 4.39%, (v) a return set at the Company’s weighted average cost of capital on the net prepaid pension asset and net other post-employment benefit liability in rate base, (vi) an adjustment to generation maintenance and outage expense to reflect a more reasonable level of test year costs, (vii) approval of the SRB mechanism with modifications to customer notifications, procedural timelines and the inclusion of any qualifying technology and fuel source bid received through an all-source request for proposal (“RFP”), and (viii) recovery of all DSM costs through the DSMAC rather than through base rates. The ACC’s decision results in an expected total net annual revenue increase for APS of approximately $253.4 million and a roughly 8% increase to the typical residential customer’s bill. The ACC issued the final order for the 2022 Rate Case on March 5, 2024, with the new rates becoming effective for all service rendered on or after March 8, 2024. Six intervenors and the Attorney General of Arizona requested rehearing on various issues included in the ACC’s decision, such as the grid access charge (“GAC”) for solar customers, the SRB, and CCT funding. On April 15, 2024, the ACC granted, in part, the rehearing applications of the Attorney General, Arizona Solar Energy Industries Association, Solar Energy Industries Association, and Vote Solar for the limited purpose of reviewing arguments concerning the GAC. Specifically, rehearing was ordered as to whether the GAC rate is just and reasonable, including whether it should be higher or lower, whether the GAC rate constitutes a discriminatory fee to solar customers, and whether omission of a GAC charge is discriminatory to non-solar customers. All other applications for rehearing were denied. The parties seeking rehearing had 30 days after the denial or granting of a request for rehearing to file a notice of appeal to the Arizona Court of Appeals. No party filed a notice of appeal within the 30-day period. A limited rehearing is scheduled to begin on November 5, 2024 for the purpose of reviewing the GAC. APS cannot predict the outcome of these proceedings. 2019 Retail Rate Case On October 31, 2019, APS filed an application with the ACC for an annual increase in retail base rates (the “2019 Rate Case”). On August 2, 2021, an Administrative Law Judge issued a Recommended Opinion and Order in the 2019 Rate Case (the “2019 Rate Case ROO”) and issued corrections on September 10 and September 20, 2021. On November 2, 2021, the ACC approved the 2019 Rate Case ROO, with various amendments, that resulted in, among other things, (i) a return on equity of 8.70%, which included a 20-basis point penalty; (ii) the recovery of the deferral and rate base effects of the operating costs and construction of the Four Corners selective catalytic reduction (“SCR”) project, with the exception of $215.5 million (see “Four Corners SCR Cost Recovery” below); (iii) the CCT plan including the following components: (a) a payment of $1 million to the Hopi Tribe within 60 days of the 2019 Rate Case decision, (b) a payment of $10 million over three years to the Navajo Nation, (c) a payment of $0.5 million to the Navajo County communities within 60 days of the 2019 Rate Case decision, (d) up to $1.25 million for electrification of homes and businesses on the Hopi reservation, and (e) up to $1.25 million for the electrification of homes and businesses on the Navajo Nation reservation; and (iv) a change in the residential on-peak time-of-use period from 3 p.m. to 8 p.m. to 4 p.m. to 7 p.m. Monday through Friday, excluding holidays. The 2019 Rate Case ROO, as amended, resulted in a total annual revenue decrease for APS of $4.8 million, excluding temporary payments and expenditures under the CCT plan. Consistent with the 2019 Rate Case decision, APS completed the following payments that will be recoverable t hrough rates related to the CCT: (i) $10 million to the Navajo Nation; (ii) $0.5 million to the Navajo County communities; and (iii) $1 million to the Hopi Tribe. Consistent with APS’s commitment to the impacted communities, APS has also completed the following payments: (i) $1.5 million to the Navajo Nation for CCT; (ii) $1.1 million to the Navajo County communities for CCT and economic development; and (iii) $1.25 million to the Hopi Tribe for CCT and economic development. The ACC has also authorized $1.25 million to be recovered through rates for electrification of homes and businesses on both the Navajo Nation and Hopi reservation. Expenditure of the recoverable funds for electrification of homes and businesses on the Navajo Nation and the Hopi reservations is contingent upon completion of a census of the unelectrified homes and businesses in each that are also within APS service territory. The census work was completed in November 2022 and disbursement of the $1.25 million for electrification of homes and businesses is planned to be finalized after discussions with the Navajo Nation and the Hopi Tribe are completed. On February 22, 2024, the ACC voted to not approve any further CCT funding. APS filed a Notice of Direct Appeal to the Arizona Court of Appeals on December 17, 2021 requesting review of certain aspects of the 2019 Rate Case. On March 6, 2023, the Court issued its opinion in this matter, affirming in part and reversing in part the ACC’s decision in the 2019 Rate Case. The Court vacated the 20-basis-point penalty included in the ACC’s allowed return on equity, as the Court determined the use of customer service metrics to justify the reduction exceeded the ACC’s ratemaking authority. Additionally, the Court vacated the disallowance of $215.5 million of APS’s Four Corners SCR investment. The Court remanded the issue to the ACC for further proceedings. On June 14, 2023, APS and the ACC Legal Division filed a joint resolution with the ACC to allow recovery of the $215.5 million in costs related to the installation of the Four Corners SCR, a reversal of the 20-basis point reduction to APS’s return on equity from 8.9% to 8.7% as a result of the 2019 Rate Case decision, and recovery of $59.6 million in revenue lost by APS between December 2021 and June 20, 2023. On June 21, 2023, the ACC approved the joint resolution and proposals therein for recovery through the Court Resolution Surcharge (“CRS”) mechanism, which became effective on July 1, 2023. See “Court Resolution Surcharge” below for more information. Matter of Impact of the Closures of Fossil-Based Generation Plan on Impacted Communities On September 28, 2022, ACC Staff filed their staff report in the Matter of Impact of the Closures of Fossil-Based Generation Plan on Impacted Communities. APS and other interested parties filed comments on the report. On October 21, 2022, ACC Staff filed a revised report and proposed order. The revised report and proposed order recommended that funds for CCT shall not be collected from rate payers. On December 8, 2022, the ACC voted against ACC Staff’s proposed order, and on April 17, 2023, the ACC closed the docket. On February 22, 2024, the ACC voted to not approve any further CCT funding. Regulatory Lag Docket On January 5, 2023, the ACC opened a new docket to explore the possibility of modifications to the ACC’s historical test year rules. The ACC requested comments from utilities and interested parties on ways to reduce regulatory lag, including alternative ratemaking structures such as future test years and hybrid test years. APS filed comments on June 1, 2023. On March 19, 2024, the ACC held a workshop to discuss modifying the state’s rate case test year rules. Utilities, including APS, spoke about alternatives to the current rules that could reduce regulatory lag. The ACC plans to hold another workshop on this topic and has invited further comments from stakeholders. On April 19, 2024, a letter was filed to the docket by an ACC commissioner discussing the potential benefits of modifying test year rules, including the potentiality of offering utilities to choose the type of test year that best suits them. The letter also recommended that this issue be discussed at the next possible open meeting. On July 9, 2024, at an open meeting, ACC Commissioners discussed objectives of future regulatory lag workshops and voted to schedule at least one more workshop on this topic later this year. The ACC scheduled a workshop for October 3, 2024. APS cannot predict the outcome of this matter. 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. See “2022 Retail Rate Case” above for modifications of adjustment mechanisms in the 2022 Rate Case. Renewable Energy Standard . In 2006, the ACC approved the renewable energy standard (“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. In June 2021, the ACC adopted a clean energy rules package which would require APS to meet certain clean energy standards and technology procurement mandates, obtain approval for its action plan included in its Integrated Resource Plan (“IRP”), and seek cost recovery in a rate process. Since the adopted clean energy rules differed substantially from the original Recommended Order and Opinion, supplemental rulemaking procedures were required before the rules could become effective. On January 26, 2022, the ACC reversed its prior decision and declined to send the final draft energy rules through the rulemaking process. Instead, the ACC opened a new docket to consider RFP requirements and the IRP process. See “Energy Modernization Plan” below for more information. On July 1, 2021, APS filed its 2022 RES Implementation Plan and proposed a budget of approximately $93.1 million. APS filed an amended 2022 RES Implementation Plan on December 9, 2021, with a proposed budget of $100.5 million. This budget included funding for programs to comply with the decision in the 2019 Rate Case, including the ACC authorizing spending $20 million to $30 million in capital costs for the continuation of the APS Solar Communities program each year for a period of three years from the effective date of the 2019 Rate Case decision. APS’s budget proposal supported existing approved projects and commitments and requested a waiver of the RES residential and non-residential distributed energy requirements for 2022. On May 18, 2022, the ACC approved the 2022 RES Implementation Plan, including an amendment requiring a stakeholder working group convene to develop a community solar program for the ACC’s consideration at a future date. On July 1, 2022, APS filed its 2023 RES Implementation Plan and proposed a budget of approximately $86.2 million, excluding any funding offsets. This budget contained funding for programs to comply with ACC-approved initiatives, including the 2019 Rate Case decision. APS’s budget proposal supported existing approved projects and commitments and requested a waiver of the RES residential and non-residential distributed energy requirements for 2022. On November 10, 2022, the ACC approved the 2023 RES Implementation Plan, including APS’s requested waiver of the distributed energy requirement for 2023. On September 23, 2022, APS filed a community solar proposal in compliance with the ACC order that was informed by a stakeholder working group. APS proposed a small, pilot-scale program size of up to 140 MW that would be selected through a competitive RFP. The ACC has not yet ruled on the proposal. However, on November 10, 2022, the ACC approved a bifurcated community solar process, directing ACC Staff to develop a statewide policy through additional stakeholder involvement and establishing a separate evidentiary hearing to define other policy components. On March 23, 2023, the ACC approved a policy statement that included information on how statewide community solar and storage programs should be structured, their location, and inclusion in RFPs. The remainder of the community solar program policy components were deferred to the ACC’s Hearing Division so that a formal evidentiary hearing could be held to consider issues of substance related to community solar. On March 5, 2024, the ACC ordered APS to not expand or extend the APS Solar Communities program. Consistent with that decision, the Solar Communities program has been discontinued and APS stopped enrolling new customers. APS will continue work on projects that were in the queue prior to that decision. On June 30, 2023, APS filed its 2024 RES Implementation Plan and proposed a budget of approximately $95.1 million. APS’s budget proposal supports existing approved projects and commitments and requests a waiver of the RES renewable energy credit requirements to demonstrate compliance with the Annual Renewable Energy Requirement for 2023. The ACC has not yet ruled on the 2024 RES Implementation Plan. APS cannot predict the outcome of this proceeding. On June 28, 2024, APS filed an application for approval of modifications to its Green Power Partners Program (“GPP”) and requested a renewable generation renewable energy credits waiver. The ACC has not yet ruled on the GPP application. APS cannot predict the outcome of this proceeding. On July 1, 2024, APS filed its 2025 RES Implementation Plan and proposed a budget of approximately $92.7 million. APS’s budget proposal supports existing approved projects and commitments and requests a waiver of the RES renewable energy credit requirements to demonstrate compliance with the Annual Renewable Energy Requirement for 2024. The ACC has not yet ruled on the 2025 RES Implementation Plan. APS cannot predict the outcome of this proceeding. Demand Side Management Adjustor Charge . The ACC Electric Energy Efficiency Standards require APS to submit a DSM Implementation Plan annually for review and approval by 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 December 17, 2021, APS filed its 2022 D SM Implementation Plan in accordance with an extension granted in 2021. The 2022 DSM Plan requested a budget of $78.4 million and represents an increase of approximately $14 million in DSM spending above 2021. On November 10, 2022, the ACC approved the 2022 DSM Implementation Plan, including a proposed performance incentive. On June 1, 2022, APS filed its 2023 Transportation Electrification Plan (“2023 TE Plan”). The 2023 TE Plan detailed APS’s efforts to support transportation electrification in Arizona, including the Take Charge AZ Pilot Program and customer education and outreach related to transportation electrification. Subsequently, APS filed an amended 2023 TE Plan on November 30, 2022, that included a request for a $5 million budget. On December 12, 2023, the ACC approved the 2023 TE Plan without including the Take Charge AZ Program and its budget going forward, but allowed APS to complete projects already underway. Additionally, the ACC discontinued the residential EV SmartCharger rebate and approved modifications to the EV rate plan. On November 30, 2022, APS filed its 2023 DSM Implementation Plan, which requested a budget of $88 million. On M ay 31, 2023, APS filed an amended 2023 DSM Implementation Plan. The amended plan maintained the originally proposed budget of $88 million. Subsequent to filing the amended 2023 DSM Implementation Plan and prior to the ACC approving it, on November 30, 2023, APS filed its 2024 DSM Implementation Plan. The 2024 DSM Implementation Plan requested a total budget of $91.5 million and incorporated all elements of the amended 2023 DSM Implementation Plan as well as the 2024 TE Implementation Plan. On April 26, 2024, APS filed an amendment to the 2024 DSM Implementation Plan. The amended 2024 DSM Implementation Plan includes an updated budget to reflect removal of incentive funds for the Level 2 Smart Charger rebate within the EV Charging Demand Management Pilot, an update on the performance incentive calculation, and the withdrawal of tranches two and three of the residential battery pilot. The ACC has not yet ruled on the amended 2024 DSM Implementation Plan. APS cannot predict the outcome of this proceeding. 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 $0.006 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 2024 and 2023 (dollars in thousands): Six Months Ended 2024 2023 Beginning balance $ 463,195 $ 460,561 Deferred fuel and purchased power costs — current period 64,220 191,304 Amounts charged to customers (204,748) (218,586) Ending balance $ 322,667 $ 433,279 On November 30, 2021, APS filed its PSA rate for the PSA year beginning February 1, 2022. That rate was $0.007544 per kWh, which consisted of a forward component of $(0.004842) per kWh and a historical component of $0.012386 per kWh. The 2022 PSA rate was a $0.004 per kWh increase compared to the 2021 PSA year, which is the maximum permitted under the Plan of Administration for the PSA. These rates went into effect as filed on February 1, 2022. On April 1, 2022, the ACC filed a final report of its third-party audit findings regarding APS’s fuel and purchased power costs for the period January 2019 through January 2021. The report contained an in-depth review of APS’s fuel and purchased power contracts, its monthly fuel accounting activities, its forecasting and dispatching procedures, and its monthly PSA filings, among other fuel-related activities. The report found that APS’s fuel processing accounting practices, dispatching procedures, and procedures for hedging activity were reasonable and appropriate. The report included several recommendations for the ACC’s consideration, including review of current contracts, maintenance schedules, and certain changes and improvements to the schedules in APS’s monthly PSA filings. On December 27, 2022, ACC Staff filed a proposed order supporting adoption of the recommendations in the third-party audit report, and the ACC approved the proposed order on February 22, 2023. On November 30, 2022, APS filed its PSA rate for the PSA year beginning February 1, 2023. In this filing, APS also requested that one of three different options be adopted to address the growing undercollected PSA balance. On February 23, 2023, the ACC approved an overall PSA rate of $0.019074 per kWh, which consisted of a forward component of $(0.005527) per kWh, a historical component of $0.013071 per kWh and a transition component of $0.011530 per kWh, that will continue until further notice of the ACC. The rate became effective with the first billing cycle in March 2023 and is designed to bring the PSA balancing account to near-zero over a 24-month period. On November 30, 2023, APS notified the ACC that it will be maintaining the current PSA rate of $0.019074 per kWh and an updated PSA adjustment schedule would not be filed at that time. In Decision No. 79293 in the 2022 Rate Case, the ACC approved a permanent increase in the annual PSA adjustor rate cap from $0.004 per kWh to $0.006 per kWh and a requirement that APS report to the ACC for possible action when the overall PSA balance reaches $100 million. As part of the 2022 Rate Case decision, the ACC also approved an overall PSA rate of $0.011977 per kWh, which consisted of a forward component of $(0.012624) per kWh, a historical component of $0.013071 per kWh, and a transition component of $0.011530 per kWh. The overall PSA rate was reduced to offset an increase in base fuel prices. The rate became effective on March 8, 2024. As a result of the 2022 Rate Case decision, the requirement to seek approval for recovery of costs related to third-party storage systems through the PSA adjustment mechanism was removed. Prior to this decision, APS was required to seek ACC approval to recover costs related to third-party energy storage systems through its PSA adjustment mechanism. In 2023, nine energy storage PPAs and their respective costs were approved for recovery through the PSA. In 2022, one energy storage PPA and its costs was approved for recovery through the PSA. In 2021, four energy storage PPAs and their respective costs were approved for recovery through the PSA. However, one energy storage PPA that was approved in 2021 was later terminated by APS due to project delays. Environmental Improvement Surcharge. On March 5, 2024, the ACC approved the elimination of the EIS, and the surcharge is no longer in effect. The EIS permitted 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. APS’s February 1, 2023, EIS application requested an increase in the charge to $14.7 million, or $3.3 million over the prior-period charge. On March 10, 2023, APS filed an amended application requesting an EIS charge of $4.0 million, a decrease of $10.7 million from the February EIS request and a decrease of $7.5 million from the prior-period charge. The revised 2023 EIS became effective with the first billing cycle in April 2023; however, with the elimination of the surcharge, it is no longer in effect. 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, 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. APS reviews the proposed formula rate filing amounts with the ACC Staff. Any item |
Retirement Plans and Other Post
Retirement Plans and Other Postretirement Benefits | 6 Months Ended |
Jun. 30, 2024 | |
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, a non-qualified supplemental excess benefit retirement plan, and other postretirement benefit plans for the employees of Pinnacle West and our subsidiaries. The other postretirement benefit plans include a group life and medical plan and a post-65 retiree health reimbursement arrangement (“HRA”). 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. 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 Benefits Other Benefits Three Months Ended Six Months Ended Three Months Ended Six Months Ended 2024 2023 2024 2023 2024 2023 2024 2023 Service cost — benefits earned during the period $ 11,190 $ 9,573 $ 21,821 $ 19,730 $ 2,518 $ 2,164 $ 4,977 $ 4,284 Non-service costs (credits): Interest cost on benefit obligation 37,085 38,418 74,321 76,780 5,472 5,582 11,085 11,255 Expected return on plan assets (47,342) (45,908) (94,325) (91,469) (11,708) (10,872) (23,417) (21,744) Amortization of: Prior service credit (a) — — — — (9,447) (9,447) (18,894) (18,894) Net actuarial loss/(gain) 10,014 9,497 20,958 19,210 (2,258) (2,504) (4,338) (4,807) Net periodic cost/(benefit) $ 10,947 $ 11,580 $ 22,775 $ 24,251 $ (15,423) $ (15,077) $ (30,587) $ (29,906) Portion of cost/(benefit) charged to expense $ 5,500 $ 6,513 $ 11,837 $ 13,740 $ (11,515) $ (10,948) $ (22,821) $ (21,685) (a) Prior-service costs or credits reflect the impact of modifications to the pension or postretirement plan benefits. The impact of these modifications is amortized over a period which reflects the demographics of the impacted population. In 2014, Pinnacle West made changes to the postretirement benefits offered to Medicare eligible retirees, which resulted in prior-service credits. We have been amortizing these prior-serviced credits since 2015 with the last full-year amortization occurring in 2024. Contributions |
Palo Verde Sale Leaseback Varia
Palo Verde Sale Leaseback Variable Interest Entities | 6 Months Ended |
Jun. 30, 2024 | |
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 variable interest entities (“VIEs”) 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 2033 under all three lease agreements. APS will be required to make payments relating to the three leases in total of approximately $21 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 for the three and six months ended June 30, 2024, of $4 million and $9 million respectively, and for the three and six months ended June 30, 2023, of $4 million and $9 million, respectively. 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 Condensed Consolidated Balance Sheets include the following amounts relating to the VIEs (dollars in thousands): June 30, 2024 December 31, 2023 Palo Verde sale leaseback property, plant and equipment, net of accumulated depreciation $ 84,491 $ 86,426 Equity — Noncontrolling interests 105,183 107,198 Assets of the VIEs are restricted and may only be used for payment to the noncontrolling interest holders. These assets are reported on our condensed 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 Nuclear Regulatory Commission (“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 $334 million beginning in 2024, and up to $501 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. |
Derivative Accounting
Derivative Accounting | 6 Months Ended |
Jun. 30, 2024 | |
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, 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 Condensed 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 sheets as an asset or liability and are measured at fair value. See Note 11 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. See Note 10 for details relating to Pinnacle West’s Equity Forward Sale Agreements and Note 3 for Pinnacle West’s Convertible Notes. These equity-linked transactions are indexed to Pinnacle West common stock and qualify for a derivative scope exception, and as such, are not subject to mark-to-market accounting and are excluded from the derivative disclosures below. Energy Derivatives For its regulated operations, APS defers for future rate treatment 100% of the unrealized gains and losses on energy derivatives pursuant to the PSA mechanism that would otherwise be recognized in income. Realized gains and losses on energy 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 energy 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 energy derivatives, which represent both purchases and sales (does not reflect net position): Quantity Commodity Unit of Measure June 30, 2024 December 31, 2023 Power GWh 1,976 1,212 Gas Billion cubic feet 228 200 Gains and Losses from Energy Derivative Instruments For the three and six months ended June 30, 2024 and 2023, APS had no energy derivative instruments in designated accounting hedging relationships. The following table provides information about gains and losses from energy derivative instruments not designated as accounting hedging instruments (dollars in thousands): Financial Statement Location Three Months Ended Six Months Ended Commodity Contracts 2024 2023 2024 2023 Net Loss Recognized in Income Fuel and purchased power (a) $ (2,752) $ (50,145) $ (58,694) $ (239,075) (a) Amounts are before the effect of PSA deferrals. Energy Derivative Instruments in the Condensed Consolidated Balance Sheets Our energy 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 Condensed Consolidated Balance Sheets. Transactions that do not allow for offsetting of positive and negative positions are reported gross on the Condensed Consolidated Balance Sheets. We do not offset a counterparty’s current energy derivative contracts with the counterparty’s non-current energy 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 APS’s 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 APS’s Condensed Consolidated Balance Sheets. As of June 30, 2024: Gross Recognized Derivatives (a) Amounts Net Recognized Derivatives Other (c) Amounts Reported on Balance Sheets Current assets $ 3,445 $ (2,690) $ 755 $ 5 $ 760 Investments and other assets — — — — — Total assets 3,445 (2,690) 755 5 760 Current liabilities (99,228) 2,690 (96,538) (7,771) (104,309) Deferred credits and other (26,364) — (26,364) — (26,364) Total liabilities (125,592) 2,690 (122,902) (7,771) (130,673) Total $ (122,147) $ — $ (122,147) $ (7,766) $ (129,913) (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 $7,771 thousand and cash margin provided to counterparties of $5 thousand. As of December 31, 2023: Gross Recognized Derivatives (a) Amounts Net Recognized Derivatives Other (c) Amounts Current assets $ 8,497 $ (1,694) $ 6,803 $ 5 $ 6,808 Investments and other assets — — — — — Total assets 8,497 (1,694) 6,803 5 6,808 Current liabilities (85,736) 10,894 (74,842) (6,071) (80,913) Deferred credits and other (42,975) — (42,975) — (42,975) Total liabilities (128,711) 10,894 (117,817) (6,071) (123,888) Total $ (120,214) $ 9,200 $ (111,014) $ (6,066) $ (117,080) (a) All of our gross recognized derivative instruments were subject to master netting arrangements. (b) Includes cash collateral provided to counterparties of $9,200 thousand 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 $6,071 thousand and cash margin provided to counterparties of $5 thousand. Credit Risk and Credit Related Contingent Features We are exposed to losses in the event of nonperformance or nonpayment by energy derivative counterparties and have risk management contracts with many energy derivative counterparties. As of June 30, 2024, we have no counterparties with positive exposures of greater than 10% of Pinnacle West’s risk management assets. 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 energy 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 energy 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 energy derivative instruments that have credit-risk-related contingent features (dollars in thousands): June 30, 2024 Aggregate fair value of derivative instruments in a net liability position $ 125,592 Additional collateral in the event credit-risk-related contingent features were fully triggered (a) 102,486 (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 $206 million if our debt credit ratings were to fall below investment grade. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2024 | |
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 U.S. Department of Energy (“DOE”) in the U.S. 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, 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, which required DOE to pay 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 provided APS with a method for submitting claims and getting recovery for costs incurred through December 31, 2016, which was extended to December 31, 2025. APS has submitted nine claims pursuant to the terms of the August 18, 2014 settlement agreement, for nine separate time periods during July 1, 2011, through October 31, 2022. The DOE has approved and paid $138.2 million for these claims (APS’s share is $40.2 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 October 31, 2023, APS filed its tenth claim pursuant to the terms of the August 18, 2014, settlement agreement in the amount of $18.46 million (APS’s share is $5.4 million). On March 21, 2024, the DOE approved a payment in the amount of $18.39 million (APS’s share is $5.4 million), and on June 14, 2024, APS received the payment. 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. This insurance limit is subject to an adjustment every five years based upon the aggregate percentage change in the Consumer Price Index. The most recent adjustment took effect on January 1, 2024. As of that date, in accordance with the Price-Anderson Act, the Palo Verde participants are insured against public liability for a nuclear incident up to approximately $16.3 billion per occurrence. Palo Verde maintains the maximum available nuclear liability insurance in the amount of $500 million, which is provided by American Nuclear Insurers . The remaining balance of approximately $15.8 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 $165.9 million, subject to a maximum annual premium of approximately $24.7 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 $144.9 million, with a maximum annual retrospective premium of approximately $21.6 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 $23.1 million for each retrospective premium assessment declared by NEIL’s Board of Dire ctors due to losses. Additionally, at the sole discretion of the NEIL Board of Directors, APS would be liable to provide approximately $64.1 million in deposit premium within 20 days of request as assurance to satisfy any site obligation of retrospective premium assessment. 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 As of June 30, 2024, our fuel and purchased power commitments and purchase obligations have increased by $1.5 billion from the information provided in our 2023 Form 10-K. The increase is primarily due to new energy storage purchased power agreements and other purchased power commitments, in addition to three new engineering, procurement, and construction contracts relating to APS-owned capital generation projects. The majority of these changes relate to 2026 and thereafter. The purchased power commitments include certain agreements that qualify as lease agreements. See Note 14. Other than the items described above, there have been no material changes, as of June 30, 2024, outside the normal course of business in contractual obligations from the information provided in our 2023 Form 10-K. See Note 3 for discussion regarding changes in our short-term and long-term debt obligations. Superfund and Other 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 (each a “PRP”). PRPs may be strictly, 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 52nd 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”). The RI/FS for OU3 was finalized and submitted to EPA at the end of 2022. APS cannot predict the EPA’s timing with respect to this matter. APS’s estimated costs related to this investigation and study is approximately $3 million. APS anticipates incurring additional expenditures in the future, but because the ultimate remediation requirements are not yet finalized by EPA, at the present time expenditures related to this matter cannot be reasonably estimated. In connection with APS’s status as a PRP for OU3, since 2013 APS and at least two dozen other parties have been defendants in various CERCLA lawsuits stemming from allegations that contamination from OU3 and elsewhere has impacted groundwater wells operated by the Roosevelt Irrigation District (“RID”). At this time, only one active lawsuit remains pending, which is on appeal to the U.S. Court of Appeals for the Ninth Circuit based on a U.S. District Court order dismissing cost recovery claims of approximately $20.7 million by a service provider for RID. APS is unable to predict the outcome of any further litigation related to this claim or APS’s share of liability related to that claim; however, APS does not expect the outcome to have a material impact on our financial position, results of operations or cash flows. On February 28, 2022, EPA provided APS with a request for information under CERCLA related to APS’s Ocotillo power plant site located in Tempe, Arizona. In particular, EPA seeks information from APS regarding APS’s use, storage, and disposal of substances containing per-and polyfluoroalkyl (“PFAS”) compounds at the Ocotillo power plant site in order to aid EPA’s investigation into actual or threatened releases of PFAS into groundwater within the South Indian Bend Wash (“SIBW”) Superfund site. The SIBW Superfund site includes the APS Ocotillo power plant site. APS filed its response to this information request on April 29, 2022. On January 17, 2023, EPA contacted APS to inform the Company that it would be commencing on-site investigations within the SIBW site, including the Ocotillo power plant, and performing a remedial investigation and feasibility study related to potential PFAS impacts to groundwater over the next two to three years. APS estimates that its costs to oversee and participate in the remedial investigation work will be approximately $1.7 million. At the present time, we are unable to predict the outcome of this matter and any further expenditures related to necessary remediation, if any, or further investigations cannot be reasonably estimated. 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 coal combustion residuals (“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 could involve material compliance costs to APS. 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 the 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 (“WIIN”) 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. At this time, the Arizona Department of Environmental Quality (“ADEQ”) has taken steps to develop a CCR permitting program and plans to propose state regulations governing CCR permitting over the summer of 2024. It remains unclear when EPA would approve that permitting program pursuant to the WIIN Act. On December 19, 2019, EPA proposed its own set of regulations governing the issuance of CCR management permits, which would impact facilities like Four Corners located on the Navajo Nation. The proposal remains pending. • 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. • With respect to APS’s Cholla facility, APS’s application for alternative closure was submitted to EPA on November 30, 2020. While EPA has deemed APS’s application administratively “complete,” the Agency’s approval remains pending. If granted, this application would allow the continued disposal of CCR within Cholla’s existing unlined CCR surface impoundments until the required date for ceasing coal-fired boiler operations in April 2025. This application will be subject to public comment and, potentially, judicial review. We expect to have a proposed decision from EPA regarding Cholla sometime in 2025. We cannot at this time predict the outcome of these regulatory proceedings or when 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 our financial condition, results of operations, or cash flows. On April 25, 2024, EPA took final action on a proposal to expand the scope of federal CCR regulations to address the impacts from historical CCR disposal activities that would have ceased prior to 2015. This new class of CCR management units (“CCRMUs”), which contain at least 1,000 tons of CCR, broadly encompass any location at an operating coal-fired power plant where CCR would have been placed on land. As proposed, this would include not only historically closed landfills and surface impoundments but also prior applications of CCR beneficial use (with exceptions for historical roadbed and embankment applications). Existing CCR regulatory requirements for groundwater monitoring, corrective action, closure, post-closure care, and other requirements will be imposed on such CCRMUs. At this time, APS is still evaluating the impacts of this final regulation on its business, with initial CCRMU site surveys due to be completed by February 2026 and final site investigation reports to be finalized by February 2027. Based on the information available to the Company at this time, APS cannot reasonably estimate the fair value of the entire CCRMU asset retirement obligation. Depending on the outcome of those evaluations and site investigations, the costs associated with APS’s management of CCR could materially increase, which could affect our financial condition, results of operations, or cash flows. APS currently disposes of CCR in ash ponds and dry storage areas at Cholla and Four Corners. The Navajo Plant disposed of CCR only in a dry landfill storage area. 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 April 11, 2021, at the latest (except for those disposal units subject to alternative closure). APS completed the assessments of corrective measures on June 14, 2019; however, additional investigations and engineering analyses that will support the remedy selection are still underway. In addition, APS will also solicit input from the public and host public hearings as part of this process. APS’s estimates for its share of corrective action and monitoring costs at Four Corners and Cholla are captured within the Asset Retirement Obligations. 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 and final remedy selection process, APS cannot predict any ultimate impacts to APS; however, at this time APS does not believe that any potential changes to the cost estimate from the CCR rule’s corrective action assessment process for Four Corners or Cholla would have a material impact on its financial condition, results of operations, or cash flows. EPA Power Plant Carbon Regulations. EPA’s regulation of carbon dioxide emissions from electric utility power plants has proceeded in fits and starts over most of the last decade. Starting on August 3, 2015, EPA finalized the Clean Power Plan, which was the Agency’s first effort at such regulation through system-wide generation dispatch shifting. Those regulations were subsequently repealed by the EPA on June 19, 2019, and replaced by the Affordable Clean Energy (“ACE”) regulations, which were a far narrower set of rules. While the U.S. Court of Appeals for the D.C. Circuit subsequently vacated the ACE regulations on January 19, 2021, and ordered a remand for EPA to develop replacement regulations consistent with the original 2015 Clean Power Plan, the U.S. Supreme Court subsequently reversed that decision on June 30, 2022, holding that the Clean Power Plan exceeded EPA’s authority under the Clean Air Act. In the final regulations governing power plant carbon dioxide emissions released April 25, 2024, EPA issued emission standards and guidelines for various subcategories of new and existing power plants. Unlike EPA’s Clean Power Plan regulations from 2015, which took a broad, system-wide approach to regulating carbon emissions from electric utility fossil-fuel burning power plants, these new federal regulations are limited to measures that can be installed at individual power plants to limit planet-warming carbon-dioxide emissions. As such, for new natural gas-fired combustion turbine power plants, EPA is proposing that carbon emission performance standards apply based on the annual capacity factors. For the highest utilization combustion turbines, EPA is therefore proposing that such facilities be retrofitted for carbon capture and sequestration or utilization controls (“CCS”) by 2032. For intermediate or low-load natural gas fired combustion turbines, those with 40% or less capacity factors, EPA’s regulations would not require add-on pollution controls. Instead, natural gas-fired combustion turbines with capacity factors of up to 20% would be effectively unregulated, while such turbines with capacity factors over 20% and up to 40% would be subject to carbon dioxide emission rate limitations. EPA did not finalize standards for existing natural gas-fired combustion turbines but has indicated that it will propose a new set of standards, initiating a separate rulemaking, for these existing gas-fired power plants within the next year. For coal-fired power plants, instead of imposing regulations based on capacity and utilization, EPA has finalized subcategories based on planned retirement dates. This means that facilities retiring before 2032 are effectively exempt from regulation, those that retire between 2032 and 2038 must co-fire with natural gas starting in 2030, and those that retire in 2039 or later must install CCS controls by 2032. As of May 10, 2024, several states, electric utility companies, affiliated trade associations, and other entities filed petitions for review of these regulations in the D.C. Circuit Court of Appeals. APS is participating in that litigation as part of an ad hoc coalition of electric utility companies, independent power producers, and trade groups, called Electric Generators for a Sensible Transition. We cannot predict the outcome of the litigation challenging EPA’s latest carbon emission standards for power plants. If this regulation remains in effect, it will likely lead to a material increase in APS’s costs to build, operate, and maintain new, frequently operated gas-fired power plants. The regulatory deadlines in 2032 by which new, frequently operated gas-fired power plants must install carbon capture and sequestration and achieve 90% capture efficiency may not be feasible. Future resource plans and procurement efforts implicating the development of such new generation remains pending and, as such, at this time APS is not able to quantify the financial impact associated with EPA’s GHG regulations for power plants. Effluent Limitation Guidelines. EPA published effluent limitation guidelines (“ELG”) on October 13, 2020, and based off those guidelines, APS completed a National Pollutant Discharge Elimination System (“NPDES”) permit modification for Four Corners on December 1, 2023. The ELG standards finalized in October 2020 relaxed the “zero discharge” standard for bottom ash transport waters EPA finalized in September 2015. However, on April 25, 2024, EPA finalized new ELG regulations that once again require “zero discharge” standards for flows of bottom ash transport water at power plants like Four Corners. Nonetheless, for power plants that permanently cease operations by December 31, 2034, such facilities can continue to comply with the 2020 ELG standards. APS is currently evaluating its compliance options for Four Corners based on the ELG regulations finalized in April 2024 and is assessing what impacts the new standards will have on our financial condition, results of operations, or cash flows. EPA Good Neighbor Proposal for Arizona . On March 15, 2023, EPA issued its final Good Neighbor Plan for 23 states in order to ensure that the cross-state transport of ozone forming emissions does not interfere with downwind state compliance with the National Ambient Air Quality Standards (“NAAQS”). Thermal power plant emission limitations are a key aspect of these regulations, which involve emission allowance trading for nitrogen oxide (“NOx”) emissions. While Arizona was not among the 23 states subject to EPA’s March 2023 final action, EPA announced on January 23, 2024, that it was proposing to add Arizona and New Mexico (along with two other additional states) to EPA’s NOx emission allowance trading program finalized last year. That proposal involves adding these states to the Good Neighbor Plan and disapproving the corresponding provisions of each state’s State Implementation Plan. Because APS operates thermal power plants within Arizona and those portions of the Navajo Nation within New Mexico, APS’s power plants would be subject to EPA’s Good Neighbor Plan upon finalization of this proposal. EPA’s final Good Neighbor Plan is subject to ongoing judicial review in the D.C. Circuit Court of Appeals. On June 27, 2024, the U.S. Supreme Court granted a motion to stay the effectiveness of EPA’s final Good Neighbor Plan pending the resolution of the litigation. As such, APS will not be impacted by the Good Neighbor Plan until the outcome of this litigation is finalized. APS cannot predict the outcome of EPA’s proposal (which depends on action disapproving the Arizona State Implementation Plan) or whether the Good Neighbor Plan will remain in effect pending the outcome of judicial review in the D.C. Circuit Court of Appeals. Should the Good Neighbor Plan ultimately be imposed on APS and its operations in Arizona and New Mexico, it would have material impact on both the costs to operate current APS power plants and APS’s ability to develop new thermal generation to serve load. At this time, APS cannot predict the impact on the Company’s financial condition, results of operations, or cash flows. Revised Mercury and Air Toxics Standard (“MATS”) Proposal. On April 25, 2024, EPA finalized revisions to the existing MATS regulations governing emissions of toxic air pollution from existing coal-fired power plants. The final regulations increase the stringency of filterable particulate matter limits used to demonstrate compliance with MATS and require the use of continuous emissions monitoring systems to ensure compliance (as opposed to periodic performance testing). These final regulations will take effect for existing coal-fired power plants, such as Four Corners, within three years of publication in the Federal Register. Based on APS’s assessment of the revised MATS regulations, this final rule is unlikely to have a material impact on plant operations or require significant capital expenditures to ensure compliance. 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 APS’s fossil-fuel powered 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 The latest NPDES permit for Four Corners was issued on September 30, 2019. Based upon a November 1, 2019, filing by several environmental groups, the Environmental Appeals Board (“EAB”) took up review of the Four Corners NPDES Permit. The EAB denied the environmental group petition on September 30, 2020. While 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, the parties to the litigation (including APS) finalized a settlement on May 2, 2022. This settlement requires investigation of thermal wastewater discharges from Four Corners, administratively closes the litigation filed in January 2021, and APS does not expect the outcome to have a material impact on our financial condition, results of operations, or cash flows. BCE Kūpono Solar BCE and Ameresco jointly owned a special purpose entity that is sponsoring the Kūpono Solar Project. This project is a 42 MW solar and battery storage facility in Oʻahu, Hawaii that will supply energy and capacity under a 20-year power purchase agreement with Hawaiian Electric Company, Inc. The Kūpono Solar Project achieved commercial operations in June 2024. On April 18, 2023, the Kūpono solar special purpose entity entered into a $140 million non-recourse construction financing agreement. The construction financing is expected to be converted into long-term financing in the form of a sale leaseback. In connection with the construction financing, Pinnacle West issued performance guarantees relating to the Kūpono Solar project. Investments in the Kūpono Solar Project were included in the BCE Sale which closed on January 12, 2024. As a result of the BCE Sale, on June 30, 2024, Pinnacle West holds no equity or ownership interest in the Kūpono Solar Project. Subsequent to the BCE Sale, Pinnacle West continues to maintain the performance guarantees relating to the Kūpono Solar Project financing (see additional information below regarding these guarantees). See Note 16 for information relating to the BCE Sale. 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 June 30, 2024, standby letters of credit totaled approximately $27 million and surety bonds totaled approximately $20 million; both will expire through 2025. 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. Pinnacle West has issued parental guarantees and has provided indemnification under certain surety bonds for APS which were not material at June 30, 2024. In connection with the sale of 4C Acquisition, LLC’s 7% interest to Navajo Transitional Energy Corporation (“NTEC”), Pinnacle West is guaranteeing certain obligations that NTEC will have to the other owners of Four Corners. Pinnacle West has not needed to perform under this guarantee. A maximum obligation is not explicitly stated in the guarantee and, therefore, the overall maximum amount of the obligation under such guarantee cannot be reasonably estimated; however, we consider the fair value of this guarantee, including expected credit losses, to be immaterial. In connection with PNW Power’s investments in minority ownership positions in the Clear Creek wind farm in Missouri and Nobles 2 wind farm in Minnesota, Pinnacle West has guaranteed the obligations of PNW Power to make production tax credit funding payments to borrowers of the projects (the “PTC Guarantees”). The amounts guaranteed by Pinnacle West are reduced as payments are made under the respective guarantee agreements. As of June 30, 2024, there is approximately $30 million of remaining guarantees relating to these PTC Guarantees that are expected to terminate by 2030. Pinnacle West has issued various performance guarantees in connection with the Kūpono Solar Project investment financing and is exposed to losses relating to these guarantees upon the occurrence of certain events that we consider to be remote. Subsequent to the BCE Sale, Pinnacle West continues to maintain these guarantees. See Note 16. Pinnacle West has not needed to perform under these guarantees. Maximum obligations are not explicitly stated in the guarantees and cannot be reasonably estimated. We consider the fair value of these guarantees, including expected credit losses, to be immaterial. The details of the guarantees are as follows: • Pinnacle West committed to certain performance guarantees tied to the Kūpono project achieving certain construction and operation milestones. These performance guarantees will expire upon the Kūpono project achieving commercial operations and the conversion of the construction financing into a sale leaseback long-term financing. The project has achieved commercial operations. As of June 30, 2024, we cannot reasonably estimate the range of loss that may occur; however, the likelihood of any payment under these guarantees is considered remote considering the project has achieved commercial operations. • Upon the Kūpono construction financing converting into a sale leaseback financing, Pinnacle West will commit to certain performance guarantees that may apply upon the occurrence of specified events, such as uninsured loss events. The guarantees will provide support relating to the sale leaseback financing of the project. Ameresco has agreed to make efforts to refinance the project and eliminate these guarantees prior to 2030. |
Other Income and Other Expense
Other Income and Other Expense | 6 Months Ended |
Jun. 30, 2024 | |
Other Income and Expenses [Abstract] | |
Other Income and Other Expense | Other Income and Other Expense The following table pro vides detail of Pinnacle West’s Consolidated other income and other expense (dollars in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Other income: Interest income (a) $ 5,396 $ 6,406 $ 12,956 $ 12,432 Gain on sale of BCE (Note 16) — — 22,988 — Miscellaneous 489 — 548 51 Total other income $ 5,885 $ 6,406 $ 36,492 $ 12,483 Other expense: Non-operating costs $ (2,038) $ (3,355) (8,188) (5,996) Investment losses — net (497) (434) (1,274) (1,495) Miscellaneous (497) (1,024) (1,137) (1,453) Total other expense $ (3,032) $ (4,813) $ (10,599) $ (8,944) (a) The 2023 and 2024 Interest income is primarily related to PSA Interest. See Note 4. The following table provides detail of APS’s other income and other expense (dollars in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Other income: Interest income (a) $ 4,602 $ 5,691 $ 11,398 $ 10,716 Miscellaneous (11) — 48 51 Total other income $ 4,591 $ 5,691 $ 11,446 $ 10,767 Other expense: Non-operating costs $ (2,397) $ (3,111) (4,652) (5,299) Miscellaneous (497) (1,024) (1,136) (1,453) Total other expense $ (2,894) $ (4,135) $ (5,788) $ (6,752) (a) The 2023 and 2024 Interest income is primarily related to PSA Interest. See Note 4. |
Earnings Per Share and Equity F
Earnings Per Share and Equity Forward Sale Agreements | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share and Equity Forward Sale Agreements | Earnings Per Share and Equity Forward Sale Agreements On February 28, 2024, Pinnacle West executed the Equity Forward Sale Agreements, which allow Pinnacle West to issue a fixed number of Pinnacle West common shares to be settled in the future. The Equity Forward Sale Agreements relate to an aggregate of 11,240,601 shares of Pinnacle West common stock that may be settled at our discretion no later than September 4, 2025. The forward sale price was initially $64.51 per share and is subject to certain adjustments in accordance with the terms of the Equity Forward Sale Agreements through the date of settlements. On a settlement date, Pinnacle West will issue shares of common stock and receive cash at the then-applicable forward sale price. As of June 30, 2024, the Equity Forward Sale Agreements have not been settled. At June 30, 2024, Pinnacle West could have settled the Equity Forward Sale Agreements with the issuance of 11,240,601 shares of common stock in exchange for cash of $726 million. We will not receive any proceeds from the Equity Forward Sale Agreements until the settlement with shares occurs, and upon settlement, we will record the proceeds, if any, in equity. The terms of the Equity Forward Sale Agreements also allow Pinnacle West, at our option, to settle the Equity Forward Sale Agreements with the counterparties by delivering cash, in lieu of shares. We have classified the Equity Forward Sale Agreements as an equity transaction. As a result, no amounts have been recorded on the Condensed Consolidated Balance Sheets relating to the Equity Forward Sale Agreements as of June 30, 2024. Delivery of shares to settle the Equity Forward Sale Agreements will eventually result in dilution to basic earnings per share (“EPS”) upon settlement. Prior to settlement, the potentially issuable shares are reflected in our diluted EPS calculations using the treasury stock method. Under this method, the number of shares of Pinnacle West common stock used in calculating diluted EPS for a reporting period is increased by the number of shares, if any, that would be issued upon settlement less that number of shares that could be purchased by Pinnacle West in the market with the proceeds received from issuance (based on the average market price during that reporting period). Share dilution occurs when the average market price of our stock during the reporting period is higher than the adjusted forward sale price as of the end of the reporting period. In June 2024, Pinnacle West issued $525 million of 4.75% convertible senior notes that will mature on June 15, 2027. The Convertible Notes conversion options are indexed to Pinnacle West’s common stock. See Note 3. The following table presents the calculation of Pinnacle West’s basic and diluted EPS (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net income attributable to common shareholders $ 203,805 $ 106,663 $ 220,667 $ 103,366 Weighted average common shares outstanding — basic 113,695 113,411 113,658 113,385 Net effect of dilutive securities: Contingently issuable performance shares and restricted stock units 489 306 408 272 Dilutive shares related to equity forward sale agreements 1,619 — 949 — Total contingently issuable shares 2,108 306 1,357 272 Weighted average common shares outstanding — diluted 115,803 113,717 115,015 113,657 Earnings per weighted-average common share outstanding: Net income attributable to common shareholders — basic $ 1.79 $ 0.94 $ 1.94 $ 0.91 Net income attributable to common shareholders — diluted $ 1.76 $ 0.94 $ 1.92 $ 0.91 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2024 | |
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 Net Asset Value (“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 7 in the 2023 Form 10-K 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 — Energy 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. Long-dated energy transactions may 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 12 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 trusts’ 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 June 30, 2024, 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 Cash equivalents $ 16 $ — $ — $ — $ 16 Risk management activities — derivative instruments: Commodity contracts — 3,207 238 (2,685) (a) 760 Nuclear decommissioning trust: Equity securities 16,797 — — 1,444 (b) 18,241 U.S. commingled equity funds — — — 391,008 (c) 391,008 U.S. Treasury debt 323,847 — — — 323,847 Corporate debt — 219,337 — — 219,337 Mortgage-backed securities — 215,154 — — 215,154 Municipal bonds — 48,332 — — 48,332 Other fixed income — 29,674 — — 29,674 Subtotal nuclear decommissioning trust 340,644 512,497 — 392,452 1,245,593 Other special use funds: Equity securities 46,789 — — 2,287 (b) 49,076 U.S. Treasury debt 318,728 — — — 318,728 Subtotal other special use funds 365,517 — — 2,287 367,804 Total assets $ 706,177 $ 515,704 $ 238 $ 392,054 $ 1,614,173 LIABILITIES Risk management activities — derivative instruments: Commodity contracts $ — $ (103,714) $ (21,878) $ (5,081) (a) $ (130,673) (a) Represents counterparty netting, margin, and collateral. See Note 7. (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, 2023, 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 Cash equivalents $ 10 $ — $ — $ — $ 10 Risk management activities — derivative instruments: Commodity contracts — 1,881 6,616 (1,689) (a) 6,808 Nuclear decommissioning trust: Equity securities 11,064 — — (767) (b) 10,297 U.S. commingled equity funds — — — 409,616 (c) 409,616 U.S. Treasury debt 319,734 — — — 319,734 Corporate debt — 188,317 — — 188,317 Mortgage-backed securities — 208,306 — — 208,306 Municipal bonds — 59,323 — — 59,323 Other fixed income — 5,653 — — 5,653 Subtotal nuclear decommissioning trust 330,798 461,599 — 408,849 1,201,246 Other special use funds: Equity securities 40,991 — — 2,196 (b) 43,187 U.S. Treasury debt 319,594 — — — 319,594 Subtotal other special use funds 360,585 — — 2,196 362,781 Total assets $ 691,393 $ 463,480 $ 6,616 $ 409,356 $ 1,570,845 LIABILITIES Risk management activities — derivative instruments: Commodity contracts $ — $ (127,016) $ (1,695) $ 4,823 (a) $ (123,888) (a) Represents counterparty netting, margin, and collateral. See Note 7. (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. The following tables provide information regarding our significant unobservable inputs used to value our risk management derivative Level 3 instruments at June 30, 2024, and December 31, 2023: June 30, 2024 Valuation Significant Weighted-Average Commodity Contracts Assets Liabilities Technique Unobservable Input Range (c) Electricity: Forward Contracts (a) $ 238 $ 19,228 Discounted cash flows Electricity forward price (per MWh) $ 25.27 - $ 240.98 $ 142.10 Option Contracts (b) — 573 Option model Electricity forward price (per MWh) $ 43.90 - $ 68.60 $ 53.66 Electricity price volatilities 235% - 384% 296% Natural gas price volatilities 65% - 86% 78% Natural Gas: Forward Contracts (a) — 2,077 Discounted cash flows Natural gas forward price (per MMBtu) $ (0.10) - $ — $ (0.04) Total $ 238 $ 21,878 (a) Includes swaps and physical and financial contracts. (b) Option contracts classified as Level 3 relate to purchase power heat rate options. Electricity and natural gas price volatilities are estimated based on historical forward price movements due to lack of market quotes for implied volatilities. (c) Unobservable inputs were weighted by the relative fair value of the instrument. December 31, 2023 Valuation Significant Weighted-Average Commodity Contracts Assets Liabilities Technique Unobservable Input Range (b) Electricity: Forward Contracts (a) $ 6,587 $ 658 Discounted cash flows Electricity forward price (per MWh) $37.79 - $259.04 $ 158.08 Natural Gas: Forward Contracts (a) 29 1,037 Discounted cash flows Natural gas forward price (per MMBtu) $0.00 - $0.08 $ 0.03 Total $ 6,616 $ 1,695 (a) Includes swaps and physical and financial contracts. (b) Unobservable inputs were weighted by the relative fair value of the instrument. The following table shows the changes in fair value for our risk management activities’ assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, Commodity Contracts 2024 2023 2024 2023 Net derivative balance at beginning of period $ (15,971) $ 6,622 $ 4,921 $ (4,888) Total net losses realized/unrealized: Deferred as a regulatory asset or liability (9,808) (26,859) (33,408) (57,286) Settlements 7,240 8,641 9,948 50,578 Transfers into Level 3 from Level 2 (4,565) (1,289) (4,565) (1,289) Transfers from Level 3 into Level 2 1,464 11,606 1,464 11,606 Net derivative balance at end of period $ (21,640) $ (1,279) $ (21,640) $ (1,279) Net unrealized gains included in earnings related to instruments still held at end of period $ — $ — $ — $ — Financial Instruments Not Carried at Fair Value The carrying value of our short-term borrowings approximate fair value and are classified within Level 2 of the fair value hierarchy. See Note 3 for our long-term debt fair values. Non-recurring Financial Instruments Measured at Fair Value |
Investments in Nuclear Decommis
Investments in Nuclear Decommissioning Trusts and Other Special Use Funds | 6 Months Ended |
Jun. 30, 2024 | |
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 Account, 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 Condensed Consolidated Balance Sheets. See Note 11 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 mine 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 2023, APS was reimbursed $14 million 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 assets. Activities relating to active union employee medical account investments are included within the other special use funds in the table below. 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 trusts and other special use fund assets (dollars in thousands): June 30, 2024 Fair Value Total Total Investment Type: Nuclear Decommissioning Trusts Other Special Use Funds Total Equity securities $ 407,805 $ 46,789 $ 454,594 $ 332,335 $ — Available for sale-fixed income securities 836,344 318,728 1,155,072 (a) 9,177 (38,947) Other 1,444 2,287 3,731 (b) 399 — Total $ 1,245,593 $ 367,804 $ 1,613,397 $ 341,911 $ (38,947) (a) As of June 30, 2024, the amortized cost basis of these available-for-sale investments is $1,185,000 thousand. (b) Represents net pending securities sales and purchases. December 31, 2023 Fair Value Total Total Investment Type: Nuclear Decommissioning Trusts Other Special Use Funds Total Equity securities $ 420,680 $ 40,991 $ 461,671 $ 336,555 $ — Available for sale-fixed income securities 781,333 319,594 1,100,927 (a) 21,518 (40,868) Other (767) 2,196 1,429 (b) 39 — Total $ 1,201,246 $ 362,781 $ 1,564,027 $ 358,112 $ (40,868) (a) As of December 31, 2023, the amortized cost basis of these available-for-sale investments is $1,120,000 thousand. (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 (dollars in thousands): Three Months Ended June 30, Nuclear Decommissioning Trusts Other Special Use Funds Total 2024 Realized gains $ 8,943 $ — $ 8,943 Realized losses $ (3,706) $ — $ (3,706) Proceeds from the sale of securities (a) $ 270,631 $ 57,874 $ 328,505 2023 Realized gains $ 35,231 $ — $ 35,231 Realized losses $ (11,192) $ — $ (11,192) Proceeds from the sale of securities (a) $ 298,761 $ 42,141 $ 340,902 (a) Proceeds are reinvested in the nuclear decommissioning trusts and other special use funds, excluding investment fees and amounts reimbursed to the Company for active union employee medical claims from the active union employee medical account. Six Months Ended June 30, Nuclear Decommissioning Trusts Other Special Use Funds Total 2024 Realized gains $ 63,435 $ 80 $ 63,515 Realized losses $ (6,521) $ — $ (6,521) Proceeds from the sale of securities (a) $ 648,453 $ 123,922 $ 772,375 2023 Realized gains $ 36,441 $ — $ 36,441 Realized losses $ (16,886) $ — $ (16,886) Proceeds from the sale of securities (a) $ 434,946 $ 132,582 $ 567,528 (a) Proceeds are reinvested in the nuclear decommissioning trusts and other special use funds, excluding amounts reimbursed to the Company for active union employee medical claims from the active union employee medical account. The fair value of APS’s fixed income securities, summarized by contractual maturities, at June 30, 2024, is as follows (dollars in thousands): Nuclear Decommissioning Trusts Coal Reclamation Escrow Account Active Union Employee Medical Account Total Less than one year $ 15,670 $ 60,841 $ 37,404 $ 113,915 1 year – 5 years 258,628 43,419 152,363 454,410 5 years – 10 years 195,624 — 24,701 220,325 Greater than 10 years 366,422 — — 366,422 Total $ 836,344 $ 104,260 $ 214,468 $ 1,155,072 |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 30, 2024 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | Changes in Accumulated Other Comprehensive Loss The following tables show the changes in Pinnacle West’s consolidated accumulated other comprehensive loss, including reclassification adjustments, net of tax, by component (dollars in thousands): Pension and Other Postretirement Benefits Derivative Instruments Total Three Months Ended June 30 Balance March 31, 2024 $ (34,192) $ 1,610 $ (32,582) OCI (loss) before reclassifications (778) (399) (1,177) Amounts reclassified from accumulated other comprehensive loss 465 (a) — 465 Balance June 30, 2024 $ (34,505) $ 1,211 $ (33,294) Balance March 31, 2023 $ (31,817) $ 281 $ (31,536) OCI (loss) before reclassifications (982) 446 (536) Amounts reclassified from accumulated other comprehensive loss 481 (a) — 481 Balance June 30, 2023 $ (32,318) $ 727 $ (31,591) (a) These amounts primarily represent amortization of actuarial loss and are included in the computation of net periodic pension cost. See Note 5. Pension and Other Postretirement Benefits Derivative Instruments Total Six Months Ended June 30 Balance December 31, 2023 $ (34,754) $ 1,610 $ (33,144) OCI (loss) before reclassifications (778) (399) (1,177) Amounts reclassified from accumulated other comprehensive loss 1,027 (a) — 1,027 Balance June 30, 2024 $ (34,505) $ 1,211 $ (33,294) Balance December 31, 2022 $ (32,332) $ 897 $ (31,435) OCI (loss) before reclassifications (982) (170) (1,152) Amounts reclassified from accumulated other comprehensive loss 996 (a) — 996 Balance June 30, 2023 $ (32,318) $ 727 $ (31,591) (a) These amounts primarily represent amortization of actuarial loss and are included in the computation of net periodic pension cost. See Note 5. The following tables show the changes in APS’s consolidated accumulated other comprehensive loss, including reclassification adjustments, net of tax, by component (dollars in thousands): Pension and Other Postretirement Benefits Three Months Ended June 30 Balance March 31, 2024 $ (16,729) OCI (loss) before reclassifications (717) Amounts reclassified from accumulated other comprehensive loss 410 (a) Balance June 30, 2024 $ (17,036) Balance March 31, 2023 $ (15,139) OCI (loss) before reclassifications (839) Amounts reclassified from accumulated other comprehensive loss 431 (a) Balance June 30, 2023 $ (15,547) (a) These amounts primarily represent amortization of actuarial loss and are included in the computation of net periodic pension cost. See Note 5. Pension and Other Postretirement Benefits Six Months Ended June 30 Balance December 31, 2023 $ (17,219) OCI (loss) before reclassifications (717) Amounts reclassified from accumulated other comprehensive loss 900 (a) Balance June 30, 2024 $ (17,036) Balance December 31, 2022 $ (15,596) OCI (loss) before reclassifications (839) Amounts reclassified from accumulated other comprehensive loss 888 (a) Balance June 30, 2023 $ (15,547) (a) These amounts primarily represent amortization of actuarial loss and are included in the computation of net periodic pension cost. See Note 5. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2024 | |
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 and energy storage agreements that qualify as lease arrangements. Our leases have remaining terms that expire in 2024 through 2073. 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 6 for a discussion of VIEs. APS has purchased power lease agreements that allow APS the right to the generation capacity from certain natural-gas fueled generators during certain months of each year throughout the term of the arrangements. As APS only has rights to use the assets during certain periods of each year, the leases have non-consecutive periods of use. APS does not operate or maintain the leased assets. APS controls the dispatch of the leased assets during the months of use 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. In addition to the fixed monthly capacity payments, APS must also pay variable charges based on the actual production volume of the assets. The variable consideration is not included in the measurement of our lease obligation. APS has executed various energy storage purchased power lease agreements that allow APS the right to charge and discharge energy storage facilities. APS pays a fixed monthly capacity price for rights to use the lease assets. The agreements generally have 20-year lease terms and provide APS with the exclusive use of the energy storage assets through the lease term. APS does not operate or maintain the energy storage facilities and has no purchase options or residual value guarantees relating to these lease assets. For this class of energy storage lease assets, APS has elected to separate the lease and non-lease components. As of June 30, 2024, we have three separate energy storage leases that have achieved lease commencement and are accounted for as operating leases. The lease terms for these energy storage agreements commenced in September 2023, April 2024, and June 2024. The following tables provide information related to our lease costs (dollars in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Operating Lease Cost - Purchased Power & Energy Storage Lease Contracts $ 39,391 $ 35,655 $ 40,328 $ 35,655 Operating Lease Cost - Land, Property, and Other Equipment 5,025 4,798 9,798 9,574 Total Operating Lease Cost 44,416 40,453 50,126 45,229 Variable Lease Cost (a) 47,783 47,994 69,347 64,724 Short-term Lease Cost 6,445 7,403 9,245 8,804 Total Lease Cost $ 98,644 $ 95,850 $ 128,718 $ 118,757 (a) Primarily relates to purchased power lease contracts. Lease costs are primarily included as a component of operating expenses on our Condensed Consolidated Statements of Income. Lease costs relating to purchased power and energy storage lease contracts are recorded in fuel and purchased power on the Condensed 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. The following table provides information related to the maturity of our operating lease liabilities (dollars in thousands): June 30, 2024 Year Purchased Power & Energy Storage Lease Contracts Land, Property & Equipment Leases Total 2024 (remaining six months of 2024) $ 113,769 $ 8,881 $ 122,650 2025 152,272 14,321 166,593 2026 165,997 12,006 178,003 2027 191,917 9,568 201,485 2028 195,714 7,126 202,840 2029 199,651 5,137 204,788 Thereafter 1,053,174 60,862 1,114,036 Total lease commitments 2,072,494 117,901 2,190,395 Less imputed interest 526,282 41,712 567,994 Total lease liabilities $ 1,546,212 $ 76,189 $ 1,622,401 We recognize lease assets and liabilities upon lease commencement. At June 30, 2024, we have various lease arrangements that have been executed, but have not yet commenced. We expect the total fixed consideration paid for these arrangements, which includes both lease and non-lease payments, will approximate $6.9 billion over the terms of the agreements. These arrangements primarily relate to energy storage assets. The lease commencement dates for these arrangements have experienced delays. APS continues to work with the lessors to determine revised commencement dates. We expect lease commencement dates ranging from August 2024 through April 2026, with lease terms expiring through March 2046. As a result of these delays and other events, APS has received cash proceeds from the lessors prior to lease commencement. Proceeds received from lessors relating to energy storage PPA leases are accounted for as lease incentives on our Condensed Consolidated Balance Sheets, and upon lease commencement are amortized over the associated lease term. For regulatory purposes, the proceeds received by APS relating to these PPA leases are treated as a reduction to fuel and purchased power costs through the PSA in the period proceeds are received. See Note 4. The following tables provide other additional information related to operating lease liabilities (dollars in thousands): Six Months Ended Six Months Ended June 30, 2023 Cash paid for amounts included in the measurement of lease liabilities — operating cash flows: $ 18,278 $ 13,798 Right-of-use operating lease assets obtained in exchange for operating lease liabilities 309,141 (a) 553,665 (b) June 30, 2024 December 31, 2023 Weighted average remaining lease term 12 years 10 years Weighted average discount rate (c) 4.85 % 4.53 % (a) Primarily relates to the two new energy storage operating lease agreements that commenced in 2024. (b) Primarily relates to the two purchased power operating lease agreements that were modified in January 2023. (c) Most of our lease agreements do not contain an implicit rate that is readily determinable. For these agreements, we use our incremental borrowing rate to measure the present value of lease liabilities. We determine our incremental borrowing rate at lease commencement based on the rate of interest that we would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. We use the implicit rate when it is readily determinable. |
Asset Retirement Obligations
Asset Retirement Obligations | 6 Months Ended |
Jun. 30, 2024 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset Retirement Obligations | Asset Retirement Obligations During the six months ended June 30, 2024, the Company revised its cost estimates for existing Asset Retirement Obligations (“ARO”) for the following: • Cholla coal-fired power plant related to the closure of ponds and facilities, which resulted in an increase to the ARO of approximately $63 million, primarily due to cost estimates associated with the CCR Rule. • Four Corners coal-fired power plant, which resulted in an increase of approximately $82 million, primarily due to cost estimates associated with the CCR Rule. • Navajo a decommissioned coal-fired power plant, which resulted in an increase of approximately $8 million. • Palo Verde nuclear plant, which resulted in an increase of approximately $1 million. APS has also recorded the initial investigation and assessment costs related to the newly signed EPA rule for Legacy Impoundments and CCRMUs. At this time, APS is still estimating the financial impacts of this final regulation on its business, with initial CCRMU site surveys due to be completed by February 2026 and final site investigation reports to be finalized by February 2027. Based on the information available to the Company at this time, APS cannot reasonably estimate the fair value of the entire CCRMU asset retirement obligation. Depending on the outcome of those evaluations and site investigations, the costs associated with APS’s management of CCR could materially increase, which could affect our financial condition, results of operations, or cash flows. See additional details in Notes 4 and 8. The following table shows the change in our asset retirement obligations for the six months ended June 30, 2024 (dollars in thousands): 2024 Asset retirement obligations at January 1, 2024 $ 966,001 Changes attributable to: Accretion expense 25,451 Settlements (4,771) Estimated cash flow revisions 154,042 Asset retirement obligations at June 30, 2024 $ 1,140,723 In accordance with regulatory accounting, APS accrues removal costs for its regulated utility assets, even if there is no legal obligation for removal. See Note 4 for detail of regulatory liabilities. |
Sale of Bright Canyon Energy
Sale of Bright Canyon Energy | 6 Months Ended |
Jun. 30, 2024 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Sale of Bright Canyon Energy | Sale of Bright Canyon Energy On August 4, 2023, Pinnacle West entered into a purchase and sale agreement pursuant to which we agreed to sell all of our equity interest in our wholly-owned subsidiary, BCE, to Ameresco. The transaction is accounted for as the sale of a business and was structured to close in multiple stages that were completed on January 12, 2024. Certain investments and assets that BCE previously held, including the TransCanyon joint venture and holdings in the two Tenaska wind farm investments, were not included in the BCE Sale and were instead transferred to PNW Power, a wholly-owned subsidiary of Pinnacle West. The BCE Sale did not include a $31 million equity bridge loan relating to BCE’s Los Alamitos project, which was paid in full by Pinnacle West on August 4, 2023. Other than these retained investments and the debt instrument, all BCE assets and liabilities were included in the BCE Sale and were transferred to Ameresco. The total carrying value of net assets transferred to Ameresco as a result of the BCE Sale totaled $79 million, with total consideration received by Pinnacle West of $108 million, resulting in a total pre-tax gain of $29 million, which was recognized between August 4, 2023, and January 12, 2024. The net assets transferred includes $41 million of liabilities that have been assumed by Ameresco. The consideration received by Pinnacle West includes both cash and interest-bearing promissory notes. The stages of the BCE Sale and timing of net assets transferring to Ameresco and related gain recognition are as follows: • The first stage of the BCE Sale was completed on August 4, 2023. In the first stage, the net assets transferred to Ameresco totaled $44 million, which included a $36 million construction term loan. The assets and liabilities transferred in the first stage related to the BCE Los Alamitos project and were previously primarily classified as construction work in progress and current maturities of long-term debt, respectively. A gain of $6 million was recognized on our Consolidated Statements of Income for the year ended December 31, 2023, relating to the first stage of the BCE Sale. • The final stage of the BCE Sale was completed on January 12, 2024. In the final stage, the net assets transferred to Ameresco totaled $35 million. The assets transferred in the final stage related primarily to equity method investments in the Kūpono Solar Project and other development stage projects. These assets were previously classified as assets held for sale on our December 31, 2023, Consolidated Balance Sheets. Our Condensed Consolidated Statements of Income for the six months ended June 30, 2024, include a $23 million gain relating to the final stage of the BCE Sale. As of January 12, 2024, all stages of the BCE Sale have been completed. As partial consideration for the BCE Sale, Pinnacle West received a $46 million interest-bearing promissory note from Ameresco. The note requires Ameresco to make cash payments to Pinnacle West throughout 2024, and we expect to receive full payment and interest on the note in 2024. Our June 30, 2024 Condensed Consolidated Balance Sheets include $37 million of a note receivable and a $1 million estimated credit reserve. On January 30, 2024, Pinnacle West entered into a tax credit transfer agreement to purchase from Ameresco $23 million of investment tax credits from the BCE Los Alamitos project for $21 million. See Note 17. Additionally, Pinnacle West continues to maintain certain guarantees relating to the Kūpono Solar Project financing, which were not transferred in the BCE Sale transaction. See Note 8. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On January 30, 2024, Pinnacle West entered into a tax credit transfer agreement to purchase from Ameresco $23 million of investment tax credits from the BCE Los Alamitos project for $21 million. See Note 16 for more information about the BCE Sale. As a part of the Inflation Reduction Act of 2022 (“IRA”), a new PTC for nuclear energy produced by existing nuclear energy plants was enacted, available from 2024 through 2032. The Nuclear PTC can be increased by five times if certain IRS prevailing wages rules are met. The Company continues to await guidance from the U.S. Treasury Department related to the definition of “gross receipts” from nuclear sales for purposes of the credit phase-out applicable to the nuclear PTC. Without such guidance, the Company is unable to make a reasonable estimate of the potential benefit the nuclear PTC may provide. As a result, no income tax benefits have been recorded related to the nuclear PTC as of June 30, 2024. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Consolidation and Nature of O_2
Consolidation and Nature of Operations (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Cash Flow Information | The following table summarizes supplemental Pinnacle West cash flow information (dollars in thousands): Six Months Ended 2024 2023 Cash paid during the period for: Income taxes, net of refunds $ 25,019 $ 17 Interest, net of amounts capitalized 177,323 154,477 Significant non-cash investing and financing activities: Accrued capital expenditures 214,182 148,433 Dividends accrued but not yet paid 99,936 98,014 BCE Sale non-cash consideration (Note 16) 36,510 — Six Months Ended 2024 2023 Cash paid during the period for: Income taxes, net of refunds $ 9,729 $ 94 Interest, net of amounts capitalized 152,535 134,107 Significant non-cash investing and financing activities: Accrued capital expenditures 214,182 151,453 Dividends accrued but not yet paid 100,000 98,000 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table provides detail of Pinnacle West’s consolidated revenue disaggregated by revenue sources (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Retail Electric Service Residential $ 658,158 $ 542,315 $ 1,090,850 $ 952,039 Non-Residential 609,871 516,712 1,071,354 922,849 Wholesale Energy Sales 10,261 27,282 37,125 122,885 Transmission Services for Others 27,541 33,152 55,253 64,943 Other Sources 3,163 2,242 6,124 3,942 Total Operating Revenues $ 1,308,994 $ 1,121,703 $ 2,260,706 $ 2,066,658 |
Schedule of Accounts Receivable | The following table provides a rollforward of Pinnacle West’s allowance for doubtful accounts (dollars in thousands): June 30, 2024 December 31, 2023 Allowance for doubtful accounts, balance at beginning of period $ 22,433 $ 23,778 Bad debt expense 11,512 23,399 Actual write-offs (18,119) (24,744) Allowance for doubtful accounts, balance at end of period $ 15,826 $ 22,433 |
Long-Term Debt and Liquidity _2
Long-Term Debt and Liquidity Matters (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Estimated Fair Value of Long-term Debt, Including Current Maturities | The following table presents the estimated fair value of our long-term debt, including current maturities (dollars in thousands): As of June 30, 2024 As of December 31, 2023 Carrying Fair Value Carrying Fair Value Pinnacle West $ 1,567,173 $ 1,558,831 $ 1,123,731 $ 1,095,935 APS 7,489,052 6,486,298 7,291,891 6,459,718 Total $ 9,056,225 $ 8,045,129 $ 8,415,622 $ 7,555,653 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 48.07 % 3.85 % Common stock equity 51.93 % 10.25 % Weighted-average cost of capital 7.17 % |
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 2024 and 2023 (dollars in thousands): Six Months Ended 2024 2023 Beginning balance $ 463,195 $ 460,561 Deferred fuel and purchased power costs — current period 64,220 191,304 Amounts charged to customers (204,748) (218,586) Ending balance $ 322,667 $ 433,279 |
Schedule of Regulatory Assets | The detail of regulatory assets is as follows (dollars in thousands): Amortization Through June 30, 2024 December 31, 2023 Pension (a) $ 687,741 $ 696,476 Deferred fuel and purchased power (b) (c) 2025 322,667 463,195 Income taxes — allowance for funds used during construction (“AFUDC”) equity 2054 190,884 189,058 Ocotillo deferral 2034 122,197 128,636 Deferred fuel and purchased power — mark-to-market (Note 7) 2026 122,147 120,214 SCR deferral (e) 2038 86,092 89,477 Retired power plant costs 2033 75,958 83,536 Lease incentives (g) 57,542 46,615 Income taxes — investment tax credit basis adjustment 2056 35,450 34,230 Deferred compensation 2036 33,923 33,972 Deferred property taxes 2027 28,203 32,488 Palo Verde VIEs (Note 6) 2046 20,692 20,772 Active Union Medical Trust (f) 13,061 12,747 FERC Transmission true up 2026 10,073 616 Navajo coal reclamation 2026 9,394 10,883 Mead-Phoenix transmission line contributions in aid of construction (“CIAC”) 2050 8,550 8,716 Loss on reacquired debt 2038 7,324 7,965 Power supply adjustor - interest 2025 5,848 19,416 Tax expense adjustor mechanism (b) 2031 4,862 5,190 Four Corners cost deferral 2024 3,884 7,922 Other Various 4,419 3,912 Total regulatory assets (d) $ 1,850,911 $ 2,016,036 Less: current regulatory assets $ 491,933 $ 625,757 Total non-current regulatory assets $ 1,358,978 $ 1,390,279 (a) This asset represents the future recovery of pension benefit obligations and expense through retail rates. If these costs are disallowed by the ACC, this regulatory asset would be charged to OCI and result in lower future revenues. As a result of the 2019 Rate Case decision, the amount authorized for inclusion in rate base was determined using an averaging methodology, which resulted in a reduced return in retail rates. The 2022 Rate Case decision allows for the full return on the pension asset in rate base. See Note 5 for further discussion. (b) See “Cost Recovery Mechanisms” discussion above. (c) Subject to a carrying charge. (d) There are no regulatory assets for which the ACC has allowed recovery of costs but not allowed a return by exclusion from rate base. FERC rates are set using a formula rate as described in “Transmission Rates, Transmission Cost Adjustor and Other Transmission Matters.” (e) See “Four Corners SCR Cost Recovery” discussion above. (f) Collected in retail rates. (g) |
Schedule of Regulatory Liabilities | The detail of regulatory liabilities is as follows (dollars in thousands): Amortization Through June 30, 2024 December 31, 2023 Excess deferred income taxes - ACC — Tax Cuts and Jobs Act (a) 2046 $ 914,436 $ 930,344 Excess deferred income taxes - FERC — Tax Cuts and Jobs Act (a) 2058 211,881 214,667 Asset retirement obligations 2057 303,303 392,383 Other postretirement benefits (c) 205,107 226,726 Removal costs (d) 82,823 94,368 Income taxes — deferred investment tax credit 2056 67,435 68,521 Income taxes — change in rates 2053 59,578 60,667 Four Corners coal reclamation 2038 57,493 55,917 Renewable energy standard (b) 2024 48,327 43,251 Spent nuclear fuel 2027 29,415 33,154 Demand side management (b) 2024 26,333 14,374 Sundance maintenance 2031 21,537 19,989 Property tax deferral 2027 7,826 10,850 Tax expense adjustor mechanism (b) 2032 4,645 4,835 FERC transmission true up (b) 2026 — 1,869 Other Various 1,642 3,873 Total regulatory liabilities $ 2,041,781 $ 2,175,788 Less: current regulatory liabilities $ 230,551 $ 209,923 Total non-current regulatory liabilities $ 1,811,230 $ 1,965,865 (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) See Note 5. (d) In accordance with regulatory accounting, APS accrues removal costs for its regulated assets, even if there is no legal obligation for removal. |
Retirement Plans and Other Po_2
Retirement Plans and Other Postretirement Benefits (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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) | 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 Benefits Other Benefits Three Months Ended Six Months Ended Three Months Ended Six Months Ended 2024 2023 2024 2023 2024 2023 2024 2023 Service cost — benefits earned during the period $ 11,190 $ 9,573 $ 21,821 $ 19,730 $ 2,518 $ 2,164 $ 4,977 $ 4,284 Non-service costs (credits): Interest cost on benefit obligation 37,085 38,418 74,321 76,780 5,472 5,582 11,085 11,255 Expected return on plan assets (47,342) (45,908) (94,325) (91,469) (11,708) (10,872) (23,417) (21,744) Amortization of: Prior service credit (a) — — — — (9,447) (9,447) (18,894) (18,894) Net actuarial loss/(gain) 10,014 9,497 20,958 19,210 (2,258) (2,504) (4,338) (4,807) Net periodic cost/(benefit) $ 10,947 $ 11,580 $ 22,775 $ 24,251 $ (15,423) $ (15,077) $ (30,587) $ (29,906) Portion of cost/(benefit) charged to expense $ 5,500 $ 6,513 $ 11,837 $ 13,740 $ (11,515) $ (10,948) $ (22,821) $ (21,685) (a) Prior-service costs or credits reflect the impact of modifications to the pension or postretirement plan benefits. The impact of these modifications is amortized over a period which reflects the demographics of the impacted population. In 2014, Pinnacle West made changes to the postretirement benefits offered to Medicare eligible retirees, which resulted in prior-service credits. We have been amortizing these prior-serviced credits since 2015 with the last full-year amortization occurring in 2024. |
Palo Verde Sale Leaseback Var_2
Palo Verde Sale Leaseback Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Variable Interest Entities [Abstract] | |
Schedule of Amounts Relating to The VIEs included in Condensed Consolidated Balance Sheets | Our Condensed Consolidated Balance Sheets include the following amounts relating to the VIEs (dollars in thousands): June 30, 2024 December 31, 2023 Palo Verde sale leaseback property, plant and equipment, net of accumulated depreciation $ 84,491 $ 86,426 Equity — Noncontrolling interests 105,183 107,198 |
Derivative Accounting (Tables)
Derivative Accounting (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of 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 energy derivatives, which represent both purchases and sales (does not reflect net position): Quantity Commodity Unit of Measure June 30, 2024 December 31, 2023 Power GWh 1,976 1,212 Gas Billion cubic feet 228 200 |
Schedule of Gains and Losses From Derivative Instruments Not Designated as Accounting Hedges Instruments | The following table provides information about gains and losses from energy derivative instruments not designated as accounting hedging instruments (dollars in thousands): Financial Statement Location Three Months Ended Six Months Ended Commodity Contracts 2024 2023 2024 2023 Net Loss Recognized in Income Fuel and purchased power (a) $ (2,752) $ (50,145) $ (58,694) $ (239,075) (a) Amounts are before the effect of PSA deferrals. |
Schedule of Offsetting Assets | The following tables provide information about the fair value of APS’s 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 APS’s Condensed Consolidated Balance Sheets. As of June 30, 2024: Gross Recognized Derivatives (a) Amounts Net Recognized Derivatives Other (c) Amounts Reported on Balance Sheets Current assets $ 3,445 $ (2,690) $ 755 $ 5 $ 760 Investments and other assets — — — — — Total assets 3,445 (2,690) 755 5 760 Current liabilities (99,228) 2,690 (96,538) (7,771) (104,309) Deferred credits and other (26,364) — (26,364) — (26,364) Total liabilities (125,592) 2,690 (122,902) (7,771) (130,673) Total $ (122,147) $ — $ (122,147) $ (7,766) $ (129,913) (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 $7,771 thousand and cash margin provided to counterparties of $5 thousand. As of December 31, 2023: Gross Recognized Derivatives (a) Amounts Net Recognized Derivatives Other (c) Amounts Current assets $ 8,497 $ (1,694) $ 6,803 $ 5 $ 6,808 Investments and other assets — — — — — Total assets 8,497 (1,694) 6,803 5 6,808 Current liabilities (85,736) 10,894 (74,842) (6,071) (80,913) Deferred credits and other (42,975) — (42,975) — (42,975) Total liabilities (128,711) 10,894 (117,817) (6,071) (123,888) Total $ (120,214) $ 9,200 $ (111,014) $ (6,066) $ (117,080) (a) All of our gross recognized derivative instruments were subject to master netting arrangements. (b) Includes cash collateral provided to counterparties of $9,200 thousand 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 $6,071 thousand and cash margin provided to counterparties of $5 thousand. |
Schedule of Offsetting Liabilities | The following tables provide information about the fair value of APS’s 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 APS’s Condensed Consolidated Balance Sheets. As of June 30, 2024: Gross Recognized Derivatives (a) Amounts Net Recognized Derivatives Other (c) Amounts Reported on Balance Sheets Current assets $ 3,445 $ (2,690) $ 755 $ 5 $ 760 Investments and other assets — — — — — Total assets 3,445 (2,690) 755 5 760 Current liabilities (99,228) 2,690 (96,538) (7,771) (104,309) Deferred credits and other (26,364) — (26,364) — (26,364) Total liabilities (125,592) 2,690 (122,902) (7,771) (130,673) Total $ (122,147) $ — $ (122,147) $ (7,766) $ (129,913) (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 $7,771 thousand and cash margin provided to counterparties of $5 thousand. As of December 31, 2023: Gross Recognized Derivatives (a) Amounts Net Recognized Derivatives Other (c) Amounts Current assets $ 8,497 $ (1,694) $ 6,803 $ 5 $ 6,808 Investments and other assets — — — — — Total assets 8,497 (1,694) 6,803 5 6,808 Current liabilities (85,736) 10,894 (74,842) (6,071) (80,913) Deferred credits and other (42,975) — (42,975) — (42,975) Total liabilities (128,711) 10,894 (117,817) (6,071) (123,888) Total $ (120,214) $ 9,200 $ (111,014) $ (6,066) $ (117,080) (a) All of our gross recognized derivative instruments were subject to master netting arrangements. (b) Includes cash collateral provided to counterparties of $9,200 thousand 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 $6,071 thousand and cash margin provided to counterparties of $5 thousand. |
Schedule of Information about Derivative Instruments that have Credit-Risk-Related Contingent Features | The following table provides information about our energy derivative instruments that have credit-risk-related contingent features (dollars in thousands): June 30, 2024 Aggregate fair value of derivative instruments in a net liability position $ 125,592 Additional collateral in the event credit-risk-related contingent features were fully triggered (a) 102,486 (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) | 6 Months Ended |
Jun. 30, 2024 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Income and Other Expense | The following table pro vides detail of Pinnacle West’s Consolidated other income and other expense (dollars in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Other income: Interest income (a) $ 5,396 $ 6,406 $ 12,956 $ 12,432 Gain on sale of BCE (Note 16) — — 22,988 — Miscellaneous 489 — 548 51 Total other income $ 5,885 $ 6,406 $ 36,492 $ 12,483 Other expense: Non-operating costs $ (2,038) $ (3,355) (8,188) (5,996) Investment losses — net (497) (434) (1,274) (1,495) Miscellaneous (497) (1,024) (1,137) (1,453) Total other expense $ (3,032) $ (4,813) $ (10,599) $ (8,944) (a) The 2023 and 2024 Interest income is primarily related to PSA Interest. See Note 4. The following table provides detail of APS’s other income and other expense (dollars in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Other income: Interest income (a) $ 4,602 $ 5,691 $ 11,398 $ 10,716 Miscellaneous (11) — 48 51 Total other income $ 4,591 $ 5,691 $ 11,446 $ 10,767 Other expense: Non-operating costs $ (2,397) $ (3,111) (4,652) (5,299) Miscellaneous (497) (1,024) (1,136) (1,453) Total other expense $ (2,894) $ (4,135) $ (5,788) $ (6,752) (a) The 2023 and 2024 Interest income is primarily related to PSA Interest. See Note 4. |
Earnings Per Share and Equity_2
Earnings Per Share and Equity Forward Sale Agreements (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 EPS (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net income attributable to common shareholders $ 203,805 $ 106,663 $ 220,667 $ 103,366 Weighted average common shares outstanding — basic 113,695 113,411 113,658 113,385 Net effect of dilutive securities: Contingently issuable performance shares and restricted stock units 489 306 408 272 Dilutive shares related to equity forward sale agreements 1,619 — 949 — Total contingently issuable shares 2,108 306 1,357 272 Weighted average common shares outstanding — diluted 115,803 113,717 115,015 113,657 Earnings per weighted-average common share outstanding: Net income attributable to common shareholders — basic $ 1.79 $ 0.94 $ 1.94 $ 0.91 Net income attributable to common shareholders — diluted $ 1.76 $ 0.94 $ 1.92 $ 0.91 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the fair value at June 30, 2024, 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 Cash equivalents $ 16 $ — $ — $ — $ 16 Risk management activities — derivative instruments: Commodity contracts — 3,207 238 (2,685) (a) 760 Nuclear decommissioning trust: Equity securities 16,797 — — 1,444 (b) 18,241 U.S. commingled equity funds — — — 391,008 (c) 391,008 U.S. Treasury debt 323,847 — — — 323,847 Corporate debt — 219,337 — — 219,337 Mortgage-backed securities — 215,154 — — 215,154 Municipal bonds — 48,332 — — 48,332 Other fixed income — 29,674 — — 29,674 Subtotal nuclear decommissioning trust 340,644 512,497 — 392,452 1,245,593 Other special use funds: Equity securities 46,789 — — 2,287 (b) 49,076 U.S. Treasury debt 318,728 — — — 318,728 Subtotal other special use funds 365,517 — — 2,287 367,804 Total assets $ 706,177 $ 515,704 $ 238 $ 392,054 $ 1,614,173 LIABILITIES Risk management activities — derivative instruments: Commodity contracts $ — $ (103,714) $ (21,878) $ (5,081) (a) $ (130,673) (a) Represents counterparty netting, margin, and collateral. See Note 7. (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, 2023, 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 Cash equivalents $ 10 $ — $ — $ — $ 10 Risk management activities — derivative instruments: Commodity contracts — 1,881 6,616 (1,689) (a) 6,808 Nuclear decommissioning trust: Equity securities 11,064 — — (767) (b) 10,297 U.S. commingled equity funds — — — 409,616 (c) 409,616 U.S. Treasury debt 319,734 — — — 319,734 Corporate debt — 188,317 — — 188,317 Mortgage-backed securities — 208,306 — — 208,306 Municipal bonds — 59,323 — — 59,323 Other fixed income — 5,653 — — 5,653 Subtotal nuclear decommissioning trust 330,798 461,599 — 408,849 1,201,246 Other special use funds: Equity securities 40,991 — — 2,196 (b) 43,187 U.S. Treasury debt 319,594 — — — 319,594 Subtotal other special use funds 360,585 — — 2,196 362,781 Total assets $ 691,393 $ 463,480 $ 6,616 $ 409,356 $ 1,570,845 LIABILITIES Risk management activities — derivative instruments: Commodity contracts $ — $ (127,016) $ (1,695) $ 4,823 (a) $ (123,888) (a) Represents counterparty netting, margin, and collateral. See Note 7. (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 shows the changes in fair value for our risk management activities’ assets and liabilities that are measured at fair value on a recurring basis using Level 3 inputs (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, Commodity Contracts 2024 2023 2024 2023 Net derivative balance at beginning of period $ (15,971) $ 6,622 $ 4,921 $ (4,888) Total net losses realized/unrealized: Deferred as a regulatory asset or liability (9,808) (26,859) (33,408) (57,286) Settlements 7,240 8,641 9,948 50,578 Transfers into Level 3 from Level 2 (4,565) (1,289) (4,565) (1,289) Transfers from Level 3 into Level 2 1,464 11,606 1,464 11,606 Net derivative balance at end of period $ (21,640) $ (1,279) $ (21,640) $ (1,279) Net unrealized gains included in earnings related to instruments still held at end of period $ — $ — $ — $ — |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The following tables provide information regarding our significant unobservable inputs used to value our risk management derivative Level 3 instruments at June 30, 2024, and December 31, 2023: June 30, 2024 Valuation Significant Weighted-Average Commodity Contracts Assets Liabilities Technique Unobservable Input Range (c) Electricity: Forward Contracts (a) $ 238 $ 19,228 Discounted cash flows Electricity forward price (per MWh) $ 25.27 - $ 240.98 $ 142.10 Option Contracts (b) — 573 Option model Electricity forward price (per MWh) $ 43.90 - $ 68.60 $ 53.66 Electricity price volatilities 235% - 384% 296% Natural gas price volatilities 65% - 86% 78% Natural Gas: Forward Contracts (a) — 2,077 Discounted cash flows Natural gas forward price (per MMBtu) $ (0.10) - $ — $ (0.04) Total $ 238 $ 21,878 (a) Includes swaps and physical and financial contracts. (b) Option contracts classified as Level 3 relate to purchase power heat rate options. Electricity and natural gas price volatilities are estimated based on historical forward price movements due to lack of market quotes for implied volatilities. (c) Unobservable inputs were weighted by the relative fair value of the instrument. December 31, 2023 Valuation Significant Weighted-Average Commodity Contracts Assets Liabilities Technique Unobservable Input Range (b) Electricity: Forward Contracts (a) $ 6,587 $ 658 Discounted cash flows Electricity forward price (per MWh) $37.79 - $259.04 $ 158.08 Natural Gas: Forward Contracts (a) 29 1,037 Discounted cash flows Natural gas forward price (per MMBtu) $0.00 - $0.08 $ 0.03 Total $ 6,616 $ 1,695 (a) Includes swaps and physical and financial contracts. (b) Unobservable inputs were weighted by the relative fair value of the instrument. |
Investments in Nuclear Decomm_2
Investments in Nuclear Decommissioning Trusts and Other Special Use Funds (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of 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 trusts and other special use fund assets (dollars in thousands): June 30, 2024 Fair Value Total Total Investment Type: Nuclear Decommissioning Trusts Other Special Use Funds Total Equity securities $ 407,805 $ 46,789 $ 454,594 $ 332,335 $ — Available for sale-fixed income securities 836,344 318,728 1,155,072 (a) 9,177 (38,947) Other 1,444 2,287 3,731 (b) 399 — Total $ 1,245,593 $ 367,804 $ 1,613,397 $ 341,911 $ (38,947) (a) As of June 30, 2024, the amortized cost basis of these available-for-sale investments is $1,185,000 thousand. (b) Represents net pending securities sales and purchases. December 31, 2023 Fair Value Total Total Investment Type: Nuclear Decommissioning Trusts Other Special Use Funds Total Equity securities $ 420,680 $ 40,991 $ 461,671 $ 336,555 $ — Available for sale-fixed income securities 781,333 319,594 1,100,927 (a) 21,518 (40,868) Other (767) 2,196 1,429 (b) 39 — Total $ 1,201,246 $ 362,781 $ 1,564,027 $ 358,112 $ (40,868) (a) As of December 31, 2023, the amortized cost basis of these available-for-sale investments is $1,120,000 thousand. (b) Represents net pending securities sales and purchases. |
Schedule of 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 (dollars in thousands): Three Months Ended June 30, Nuclear Decommissioning Trusts Other Special Use Funds Total 2024 Realized gains $ 8,943 $ — $ 8,943 Realized losses $ (3,706) $ — $ (3,706) Proceeds from the sale of securities (a) $ 270,631 $ 57,874 $ 328,505 2023 Realized gains $ 35,231 $ — $ 35,231 Realized losses $ (11,192) $ — $ (11,192) Proceeds from the sale of securities (a) $ 298,761 $ 42,141 $ 340,902 (a) Proceeds are reinvested in the nuclear decommissioning trusts and other special use funds, excluding investment fees and amounts reimbursed to the Company for active union employee medical claims from the active union employee medical account. Six Months Ended June 30, Nuclear Decommissioning Trusts Other Special Use Funds Total 2024 Realized gains $ 63,435 $ 80 $ 63,515 Realized losses $ (6,521) $ — $ (6,521) Proceeds from the sale of securities (a) $ 648,453 $ 123,922 $ 772,375 2023 Realized gains $ 36,441 $ — $ 36,441 Realized losses $ (16,886) $ — $ (16,886) Proceeds from the sale of securities (a) $ 434,946 $ 132,582 $ 567,528 (a) Proceeds are reinvested in the nuclear decommissioning trusts and other special use funds, excluding amounts reimbursed to the Company for active union employee medical claims from the active union employee medical account. |
Schedule of Fair Value of Fixed Income Securities, Summarized by Contractual Maturities | The fair value of APS’s fixed income securities, summarized by contractual maturities, at June 30, 2024, is as follows (dollars in thousands): Nuclear Decommissioning Trusts Coal Reclamation Escrow Account Active Union Employee Medical Account Total Less than one year $ 15,670 $ 60,841 $ 37,404 $ 113,915 1 year – 5 years 258,628 43,419 152,363 454,410 5 years – 10 years 195,624 — 24,701 220,325 Greater than 10 years 366,422 — — 366,422 Total $ 836,344 $ 104,260 $ 214,468 $ 1,155,072 |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss Including Reclassification Adjustments, Net of Tax, by Component | The following tables show the changes in Pinnacle West’s consolidated accumulated other comprehensive loss, including reclassification adjustments, net of tax, by component (dollars in thousands): Pension and Other Postretirement Benefits Derivative Instruments Total Three Months Ended June 30 Balance March 31, 2024 $ (34,192) $ 1,610 $ (32,582) OCI (loss) before reclassifications (778) (399) (1,177) Amounts reclassified from accumulated other comprehensive loss 465 (a) — 465 Balance June 30, 2024 $ (34,505) $ 1,211 $ (33,294) Balance March 31, 2023 $ (31,817) $ 281 $ (31,536) OCI (loss) before reclassifications (982) 446 (536) Amounts reclassified from accumulated other comprehensive loss 481 (a) — 481 Balance June 30, 2023 $ (32,318) $ 727 $ (31,591) (a) These amounts primarily represent amortization of actuarial loss and are included in the computation of net periodic pension cost. See Note 5. Pension and Other Postretirement Benefits Derivative Instruments Total Six Months Ended June 30 Balance December 31, 2023 $ (34,754) $ 1,610 $ (33,144) OCI (loss) before reclassifications (778) (399) (1,177) Amounts reclassified from accumulated other comprehensive loss 1,027 (a) — 1,027 Balance June 30, 2024 $ (34,505) $ 1,211 $ (33,294) Balance December 31, 2022 $ (32,332) $ 897 $ (31,435) OCI (loss) before reclassifications (982) (170) (1,152) Amounts reclassified from accumulated other comprehensive loss 996 (a) — 996 Balance June 30, 2023 $ (32,318) $ 727 $ (31,591) (a) These amounts primarily represent amortization of actuarial loss and are included in the computation of net periodic pension cost. See Note 5. The following tables show the changes in APS’s consolidated accumulated other comprehensive loss, including reclassification adjustments, net of tax, by component (dollars in thousands): Pension and Other Postretirement Benefits Three Months Ended June 30 Balance March 31, 2024 $ (16,729) OCI (loss) before reclassifications (717) Amounts reclassified from accumulated other comprehensive loss 410 (a) Balance June 30, 2024 $ (17,036) Balance March 31, 2023 $ (15,139) OCI (loss) before reclassifications (839) Amounts reclassified from accumulated other comprehensive loss 431 (a) Balance June 30, 2023 $ (15,547) (a) These amounts primarily represent amortization of actuarial loss and are included in the computation of net periodic pension cost. See Note 5. Pension and Other Postretirement Benefits Six Months Ended June 30 Balance December 31, 2023 $ (17,219) OCI (loss) before reclassifications (717) Amounts reclassified from accumulated other comprehensive loss 900 (a) Balance June 30, 2024 $ (17,036) Balance December 31, 2022 $ (15,596) OCI (loss) before reclassifications (839) Amounts reclassified from accumulated other comprehensive loss 888 (a) Balance June 30, 2023 $ (15,547) (a) These amounts primarily represent amortization of actuarial loss and are included in the computation of net periodic pension cost. See Note 5. |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Leases [Abstract] | |
Schedule of Lease Cost and Additional Information | The following tables provide information related to our lease costs (dollars in thousands): Three Months Ended Six Months Ended 2024 2023 2024 2023 Operating Lease Cost - Purchased Power & Energy Storage Lease Contracts $ 39,391 $ 35,655 $ 40,328 $ 35,655 Operating Lease Cost - Land, Property, and Other Equipment 5,025 4,798 9,798 9,574 Total Operating Lease Cost 44,416 40,453 50,126 45,229 Variable Lease Cost (a) 47,783 47,994 69,347 64,724 Short-term Lease Cost 6,445 7,403 9,245 8,804 Total Lease Cost $ 98,644 $ 95,850 $ 128,718 $ 118,757 (a) Primarily relates to purchased power lease contracts. The following tables provide other additional information related to operating lease liabilities (dollars in thousands): Six Months Ended Six Months Ended June 30, 2023 Cash paid for amounts included in the measurement of lease liabilities — operating cash flows: $ 18,278 $ 13,798 Right-of-use operating lease assets obtained in exchange for operating lease liabilities 309,141 (a) 553,665 (b) June 30, 2024 December 31, 2023 Weighted average remaining lease term 12 years 10 years Weighted average discount rate (c) 4.85 % 4.53 % (a) Primarily relates to the two new energy storage operating lease agreements that commenced in 2024. (b) Primarily relates to the two purchased power operating lease agreements that were modified in January 2023. (c) Most of our lease agreements do not contain an implicit rate that is readily determinable. For these agreements, we use our incremental borrowing rate to measure the present value of lease liabilities. We determine our incremental borrowing rate at lease commencement based on the rate of interest that we would have to pay to borrow, on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. We use the implicit rate when it is readily determinable. |
Schedule of Future Minimum Payments | The following table provides information related to the maturity of our operating lease liabilities (dollars in thousands): June 30, 2024 Year Purchased Power & Energy Storage Lease Contracts Land, Property & Equipment Leases Total 2024 (remaining six months of 2024) $ 113,769 $ 8,881 $ 122,650 2025 152,272 14,321 166,593 2026 165,997 12,006 178,003 2027 191,917 9,568 201,485 2028 195,714 7,126 202,840 2029 199,651 5,137 204,788 Thereafter 1,053,174 60,862 1,114,036 Total lease commitments 2,072,494 117,901 2,190,395 Less imputed interest 526,282 41,712 567,994 Total lease liabilities $ 1,546,212 $ 76,189 $ 1,622,401 |
Asset Retirement Obligations (T
Asset Retirement Obligations (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Schedule of Change in Asset Retirement Obligations | The following table shows the change in our asset retirement obligations for the six months ended June 30, 2024 (dollars in thousands): 2024 Asset retirement obligations at January 1, 2024 $ 966,001 Changes attributable to: Accretion expense 25,451 Settlements (4,771) Estimated cash flow revisions 154,042 Asset retirement obligations at June 30, 2024 $ 1,140,723 |
Consolidation and Nature of O_3
Consolidation and Nature of Operations (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash paid during the period for: | ||
Income taxes, net of refunds | $ 25,019 | $ 17 |
Interest, net of amounts capitalized | 177,323 | 154,477 |
Significant non-cash investing and financing activities: | ||
Accrued capital expenditures | 214,182 | 148,433 |
Dividends accrued but not yet paid | 99,936 | 98,014 |
BCE Sale non-cash consideration (Note 16) | 36,510 | 0 |
APS | ||
Cash paid during the period for: | ||
Income taxes, net of refunds | 9,729 | 94 |
Interest, net of amounts capitalized | 152,535 | 134,107 |
Significant non-cash investing and financing activities: | ||
Accrued capital expenditures | 214,182 | 151,453 |
Dividends accrued but not yet paid | $ 100,000 | $ 98,000 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 1,308,994 | $ 1,121,703 | $ 2,260,706 | $ 2,066,658 |
Wholesale Energy Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 10,261 | 27,282 | 37,125 | 122,885 |
Transmission Services for Others | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 27,541 | 33,152 | 55,253 | 64,943 |
Other Sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 3,163 | 2,242 | 6,124 | 3,942 |
Residential | Retail Electric Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | 658,158 | 542,315 | 1,090,850 | 952,039 |
Non-Residential | Retail Electric Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 609,871 | $ 516,712 | $ 1,071,354 | $ 922,849 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 1,308,994 | $ 1,121,703 | $ 2,260,706 | $ 2,066,658 |
Regulatory cost recovery revenue | 6,000 | 10,000 | 15,000 | 33,000 |
Electric and Transmission Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Total operating revenues | $ 1,303,000 | $ 1,112,000 | $ 2,246,000 | $ 2,034,000 |
Revenue - Allowance for Doubtfu
Revenue - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for doubtful accounts, balance at beginning of period | $ 22,433 | $ 23,778 |
Bad debt expense | 11,512 | 23,399 |
Actual write-offs | (18,119) | (24,744) |
Allowance for doubtful accounts, balance at end of period | $ 15,826 | $ 22,433 |
Long-Term Debt and Liquidity _3
Long-Term Debt and Liquidity Matters - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||
Jun. 17, 2024 USD ($) | Jun. 12, 2024 USD ($) | Jun. 06, 2024 USD ($) | Apr. 19, 2024 USD ($) | Feb. 09, 2024 USD ($) | Dec. 12, 2023 USD ($) | Jun. 30, 2024 USD ($) day $ / shares | Jun. 30, 2024 USD ($) $ / shares | Jun. 30, 2024 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) | May 09, 2024 USD ($) | Apr. 18, 2024 USD ($) | Oct. 27, 2023 USD ($) | Apr. 10, 2023 USD ($) creditFacility | Apr. 09, 2023 USD ($) | Dec. 15, 2022 USD ($) | Dec. 14, 2022 USD ($) | |
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Short-term debt repayments under term loan facility | $ 350,000,000 | $ 0 | |||||||||||||||
APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Short-term debt repayments under term loan facility | 350,000,000 | 0 | |||||||||||||||
Annual amount of approved equity infusions | 150,000,000 | ||||||||||||||||
Increased in equity contributions | $ 500,000,000 | ||||||||||||||||
Contributions from parent | $ 450,000,000 | $ 450,000,000 | $ 450,000,000 | $ 150,000,000 | |||||||||||||
Public utilities, request to permanently modify permitted yearly equity infusions | 2.50% | ||||||||||||||||
APS | ACC | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Public utility order short term debt authorization as percentage of capitalization | 7% | ||||||||||||||||
Public utility order short term debt authorization, fixed amount | $ 500,000,000 | ||||||||||||||||
Public utility order long term debt, authorization | $ 8,000,000,000 | $ 8,000,000,000 | $ 7,500,000,000 | ||||||||||||||
Public utility order long term debt, increase in authorization limit | $ 9,500,000,000 | ||||||||||||||||
Equity Forward Sale Agreements | Pinnacle West | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Sale of stock, settlement terms (in shares) | shares | 11,240,601 | ||||||||||||||||
Sale of stock, settlement proceeds from issuance of common stock | $ 726,000,000 | ||||||||||||||||
Term Loan | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Debt instrument, face amount | $ 350,000,000 | ||||||||||||||||
Debt instrument, term | 364 days | ||||||||||||||||
Variable rate | 1% | ||||||||||||||||
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration] | Secured Overnight Financing Rate (SOFR) [Member] | ||||||||||||||||
Proceeds from short-term debt | $ 350,000,000 | ||||||||||||||||
Unsecured Senior Notes Due 2024 | APS | Senior notes | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Debt instrument, face amount | $ 450,000,000 | ||||||||||||||||
Debt instrument, interest rate | 3.35% | 5.70% | |||||||||||||||
Repayments of unsecured debt | $ 250,000,000 | ||||||||||||||||
Revolving Credit Facility | Revolving Credit Facility Maturing May 2026 | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Current borrowing capacity on credit facility | $ 500,000,000 | ||||||||||||||||
Number of lines of credit facilities | creditFacility | 2 | ||||||||||||||||
Revolving Credit Facility | Revolving Credit Facility Maturing April 2028 | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Current borrowing capacity on credit facility | $ 1,250,000,000 | ||||||||||||||||
Maximum borrowing capacity on credit facility upon satisfaction of certain conditions and consent of lenders (up to) | 1,650,000,000 | ||||||||||||||||
Revolving Credit Facility | Revolving Credit Facility Maturing April 2028, Facility One | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Maximum borrowing capacity on credit facility upon satisfaction of certain conditions and consent of lenders (up to) | 400,000,000 | ||||||||||||||||
Revolving Credit Facility | Revolving Credit Facility Maturing April 2028, Facility Two | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Maximum borrowing capacity on credit facility upon satisfaction of certain conditions and consent of lenders (up to) | 400,000,000 | ||||||||||||||||
Revolving Credit Facility | Revolving Credit Facility Maturing in 2022 and 2023 | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Long-term line of credit | $ 0 | $ 0 | $ 0 | ||||||||||||||
Debt, weighted average interest rate | 5.43% | 5.43% | 5.43% | ||||||||||||||
Letter of Credit | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Outstanding letters of credit | $ 27,000,000 | $ 27,000,000 | $ 27,000,000 | ||||||||||||||
Letter of Credit | Revolving Credit Facility Maturing April 2028 | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Outstanding letters of credit | 0 | 0 | 0 | ||||||||||||||
Commercial Paper | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Maximum commercial paper support available under credit facility | 1,000,000,000 | $ 750,000,000 | |||||||||||||||
Commercial Paper | Revolving Credit Facility Maturing April 2028 | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Commercial paper | 456,000,000 | 456,000,000 | 456,000,000 | ||||||||||||||
Pinnacle West | Convertible Notes Due Maturing June 2027 | Convertible Debt | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Debt instrument, face amount | $ 525,000,000 | $ 525,000,000 | $ 525,000,000 | ||||||||||||||
Debt instrument, interest rate | 4.75% | 4.75% | 4.75% | ||||||||||||||
Debt instrument, convertible, conversion ratio | 0.108338 | ||||||||||||||||
Debt instrument, convertible, conversion price (in usd per share) | $ / shares | $ 92.30 | $ 92.30 | $ 92.30 | ||||||||||||||
Debt instrument redemption price percentage | 100% | ||||||||||||||||
Long-term debt, gross | $ 518,000,000 | $ 518,000,000 | $ 518,000,000 | ||||||||||||||
Unamortized debt issuance expense | 7,000,000 | 7,000,000 | 7,000,000 | ||||||||||||||
Convertible debt, fair value | $ 530,000,000 | 530,000,000 | 530,000,000 | ||||||||||||||
Pinnacle West | Convertible Notes Due Maturing June 2027 | Convertible Debt | Debt Conversion Terms One | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Debt instrument, convertible, threshold trading days | day | 20 | ||||||||||||||||
Debt instrument, convertible, threshold consecutive trading days | day | 30 | ||||||||||||||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130% | ||||||||||||||||
Pinnacle West | Convertible Notes Due Maturing June 2027 | Convertible Debt | Debt Conversion Terms Two | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Debt instrument, convertible, threshold trading days | day | 5 | ||||||||||||||||
Debt instrument, convertible, threshold consecutive trading days | day | 10 | ||||||||||||||||
Debt instrument, convertible, threshold percentage of stock price trigger | 98% | ||||||||||||||||
Pinnacle West | Floating Rate Notes Due 2026 | Unsecured Debt | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Debt instrument, face amount | $ 350,000,000 | 350,000,000 | 350,000,000 | ||||||||||||||
Variable rate | 0.82% | ||||||||||||||||
Pinnacle West | 450 Million Term Loan | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Debt instrument, face amount | $ 450,000,000 | $ 450,000,000 | 450,000,000 | 450,000,000 | |||||||||||||
Repayments of unsecured debt | $ 250,000,000 | ||||||||||||||||
Pinnacle West | 175 Million Term Loan | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Debt instrument, face amount | 175,000,000 | 175,000,000 | 175,000,000 | ||||||||||||||
Pinnacle West | Term Loan | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Short-term debt repayments under term loan facility | $ 350,000,000 | ||||||||||||||||
Pinnacle West | Term Loan | APS | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Debt instrument, term | 364 days | ||||||||||||||||
Pinnacle West | Revolving Credit Facility | Revolving Credit Facility Maturing May 2026 | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Current borrowing capacity on credit facility | $ 200,000,000 | ||||||||||||||||
Pinnacle West | Revolving Credit Facility | Revolving Credit Facility Maturing April 2028 | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Current borrowing capacity on credit facility | 200,000,000 | ||||||||||||||||
Maximum borrowing capacity on credit facility upon satisfaction of certain conditions and consent of lenders (up to) | $ 300,000,000 | ||||||||||||||||
Long-term line of credit | $ 0 | 0 | 0 | ||||||||||||||
Pinnacle West | Letter of Credit | Revolving Credit Facility Maturing April 2028 | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Outstanding letters of credit | 0 | 0 | 0 | ||||||||||||||
Pinnacle West | Commercial Paper | Revolving Credit Facility Maturing April 2028 | |||||||||||||||||
Long-Term Debt and Liquidity Matters | |||||||||||||||||
Commercial paper | $ 76,000,000 | $ 76,000,000 | $ 76,000,000 | ||||||||||||||
Debt, weighted average interest rate | 5.46% | 5.46% | 5.46% |
Long-Term Debt and Liquidity _4
Long-Term Debt and Liquidity Matters - Estimated Fair Value of Long-term Debt, Including Current Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Estimated fair value of long-term debt, including current maturities | ||
Carrying Amount | $ 9,056,225 | $ 8,415,622 |
Fair Value | 8,045,129 | 7,555,653 |
APS | ||
Estimated fair value of long-term debt, including current maturities | ||
Carrying Amount | 7,489,052 | 7,291,891 |
Fair Value | 6,486,298 | 6,459,718 |
Pinnacle West | ||
Estimated fair value of long-term debt, including current maturities | ||
Carrying Amount | 1,567,173 | 1,123,731 |
Fair Value | $ 1,558,831 | $ 1,095,935 |
Regulatory Matters - Retail Rat
Regulatory Matters - Retail Rate Case Filing (Details) $ in Thousands | Feb. 22, 2024 USD ($) | Jan. 25, 2024 USD ($) $ / MWh | Jul. 26, 2023 USD ($) $ / kWh | Jul. 12, 2023 USD ($) $ / kWh | Jul. 11, 2023 $ / kWh | Jun. 14, 2023 USD ($) | Oct. 28, 2022 USD ($) $ / kWh | Jun. 30, 2022 USD ($) | Dec. 17, 2021 USD ($) | Nov. 02, 2021 USD ($) | Nov. 06, 2023 USD ($) | Nov. 05, 2023 USD ($) | Aug. 04, 2023 USD ($) | Aug. 03, 2023 USD ($) | Jun. 15, 2023 USD ($) | Mar. 06, 2023 | Nov. 30, 2022 USD ($) |
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Revenue increase (decrease) | $ 491,700 | $ 523,100 | |||||||||||||||
ACC | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Base fuel rate (in dollars per kWh) | $ / kWh | 0.006 | 0.006 | 0.004 | ||||||||||||||
Revenue increase (decrease) | $ 281,900 | $ 383,100 | $ 282,700 | $ 281,900 | $ 251,000 | ||||||||||||
Alternative revenue increase (decrease) | $ 312,000 | ||||||||||||||||
Recommended return on equity, percentage | 9.55% | 9.55% | 9.68% | 10.25% | 9.60% | ||||||||||||
Increment of fair value rate, percentage | 0.25% | 0.25% | 0.50% | 0.50% | 0% | ||||||||||||
Alternative increment of fair value rate percentage | 0.0075 | ||||||||||||||||
Hypothetical capital structure of equity layer percentage | 0.46 | ||||||||||||||||
ACC | Navajo Nation, Hopi Tribe | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Amount recoverable through rates related to the CCT | $ 1,000 | ||||||||||||||||
ACC | Navajo Nation | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Amount funded by shareholders | 1,500 | ||||||||||||||||
Amount recoverable through rates related to the CCT | 10,000 | ||||||||||||||||
ACC | Navajo Nation, Hopi Reservation | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Amount recoverable through rates related to the CCT | 1,250 | ||||||||||||||||
ACC | Navajo County Communities | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Amount recoverable through rates related to the CCT | 500 | ||||||||||||||||
ACC | Navajo County Communities, CCT and Economic Development | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Amount funded by shareholders | 1,100 | ||||||||||||||||
ACC | Navajo Nation, Hopi Tribe for CCT and Economic Development | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Amount funded by shareholders | $ 1,250 | ||||||||||||||||
ACC | Navajo and Hopi Tribes | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Disbursement | $ 1,250 | ||||||||||||||||
ACC | APS | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Total revenue deficiency | $ 772,000 | ||||||||||||||||
Revenue increase (decrease) | $ 376,200 | $ 377,700 | $ 383,100 | ||||||||||||||
Regulatory matters, customer bill impact rate | 11.30% | 11.10% | 11.20% | ||||||||||||||
Regulatory matters, no of basis penalty point | 0.0020 | 20 | |||||||||||||||
Reversal of basis point penalty | 0.0020 | ||||||||||||||||
ACC | APS | Retail Rate Case Filing with Arizona Corporation Commission | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Approximate percentage of increase in average residential customer bill | 13.60% | ||||||||||||||||
Rate matter, cost base rate | $ 10,500,000 | ||||||||||||||||
Base fuel rate (in dollars per kWh) | 0.006 | 0.038321 | |||||||||||||||
Recommended return on equity, percentage | 8.90% | 8.70% | |||||||||||||||
Effective fair value percentage | 4.39% | 4.36% | |||||||||||||||
Public utilities, effective prepaid pension asset, rate | 5% | ||||||||||||||||
Public utilities, effective other postretirement benefit plan liability rate | 5.35% | ||||||||||||||||
Public utilities, retention of renewable energy adjustment charge | $ 1,900 | ||||||||||||||||
Public utilities, recommended transfer of funds to base rates | $ 27,100 | ||||||||||||||||
Increases in annual revenue | $ 253,400 | ||||||||||||||||
Increase to the typical residential customer’s bill | 8% | ||||||||||||||||
ACC | APS | Retail Rate Case Filing with Arizona Corporation Commission | Navajo Nation, Hopi Tribe | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Amount not recoverable | $ 215,500 | ||||||||||||||||
Amount funded by shareholders | $ 1,000 | ||||||||||||||||
Amount funded by shareholders, term | 60 days | ||||||||||||||||
ACC | APS | Retail Rate Case Filing with Arizona Corporation Commission | Navajo Nation | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Amount funded by shareholders | $ 10,000 | ||||||||||||||||
Amount funded by shareholders, term | 3 years | ||||||||||||||||
ACC | APS | Retail Rate Case Filing with Arizona Corporation Commission | Navajo County Communities | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Amount funded by shareholders | $ 500 | ||||||||||||||||
Amount funded by shareholders, term | 60 days | ||||||||||||||||
ACC | APS | Retail Rate Case Filing with Arizona Corporation Commission | Navajo Nation, Hopi Reservation | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Amount funded by shareholders | $ 1,250 | ||||||||||||||||
ACC | APS | Retail Rate Case Filing with Arizona Corporation Commission | Navajo Nation Reservation | Coal Community Transition Plan | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Revenue increase (decrease) | (4,800) | ||||||||||||||||
Recommended return on equity, percentage | 8.70% | ||||||||||||||||
Amount funded by shareholders | $ 1,250 | ||||||||||||||||
Disallowance of plant investments | $ 215,500 | ||||||||||||||||
Requested reversal of rate adjustment | $ 215,500 | ||||||||||||||||
Lost revenue recovery | $ 59,600 | ||||||||||||||||
Residential Utility Consumer Office | ACC | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Revenue increase (decrease) | $ 84,900 | ||||||||||||||||
Recommended return on equity, percentage | 8.20% | ||||||||||||||||
Increment of fair value rate, percentage | 0% | ||||||||||||||||
Alternate recommended return on equity percentage | 0.087 | ||||||||||||||||
Minimum | ACC | APS | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Annual increase in retail base rates | $ 460,000 | ||||||||||||||||
Maximum | ACC | |||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||
Increment of fair value rate, percentage | 1% |
Regulatory Matters - Capital St
Regulatory Matters - Capital Structure and Costs of Capital (Details) - APS | Oct. 28, 2022 |
Cost of Capital | |
Requested Long-term debt cost of capital, percentage | 3.85% |
Requested equity cost of capital, percentage | 10.25% |
Requested weighted average cost of capital, percentage | 7.17% |
Retail Rate Case Filing with Arizona Corporation Commission | |
Capital Structure | |
Requested equity capital structure, percentage | 51.93% |
Retail Rate Case Filing with Arizona Corporation Commission | ACC | |
Capital Structure | |
Requested debt capital structure, percentage | 48.07% |
Regulatory Matters - Cost Recov
Regulatory Matters - Cost Recovery Mechanisms (Details) | 6 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||
Jul. 31, 2024 USD ($) | Jun. 01, 2024 USD ($) MW | May 01, 2024 $ / kWh | Apr. 19, 2024 | Nov. 30, 2023 USD ($) $ / kWh | Oct. 25, 2023 USD ($) | Oct. 11, 2023 | Jul. 31, 2023 USD ($) | Jul. 01, 2023 USD ($) $ / KWH_Kilowatt_hour | Jun. 01, 2023 USD ($) | May 01, 2023 $ / kWh | Mar. 10, 2023 USD ($) | Feb. 23, 2023 $ / kWh | Feb. 01, 2023 USD ($) $ / kWh | Sep. 23, 2022 MW | Jul. 12, 2022 USD ($) $ / kWh | Jun. 01, 2022 USD ($) | Feb. 15, 2022 USD ($) | Feb. 01, 2022 $ / kWh | Oct. 01, 2021 $ / kWh | Feb. 15, 2021 USD ($) | Feb. 01, 2020 $ / kWh | Oct. 31, 2019 $ / KWH_Kilowatt_hour | Sep. 01, 2017 | Jun. 30, 2024 USD ($) | Dec. 31, 2023 storage | Dec. 31, 2022 storage | Dec. 31, 2021 storage | Dec. 31, 2020 program MW | Jul. 01, 2024 USD ($) | Oct. 27, 2023 USD ($) | Jun. 30, 2023 USD ($) | May 31, 2023 USD ($) | Nov. 30, 2022 USD ($) | Jul. 01, 2022 USD ($) | Apr. 18, 2022 USD ($) | Dec. 17, 2021 USD ($) | Dec. 09, 2021 USD ($) | Jul. 01, 2021 USD ($) | |
APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Number of energy storage PPA | storage | 9 | 1 | 4 | ||||||||||||||||||||||||||||||||||||
Number of energy storage PPA, terminated | storage | 1 | ||||||||||||||||||||||||||||||||||||||
Annual amount of approved equity infusions | $ 150,000,000 | ||||||||||||||||||||||||||||||||||||||
Increased in equity contributions | $ 500,000,000 | ||||||||||||||||||||||||||||||||||||||
Public utilities, request to permanently modify permitted yearly equity infusions | 2.50% | ||||||||||||||||||||||||||||||||||||||
APS | Damage from Fire, Explosion or Other Hazard | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Past due balance threshold qualifying for payment extension | $ 75 | ||||||||||||||||||||||||||||||||||||||
ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Program term | 18 years | ||||||||||||||||||||||||||||||||||||||
Number of programs | program | 2 | ||||||||||||||||||||||||||||||||||||||
Solar capacity (in MW) | MW | 80 | ||||||||||||||||||||||||||||||||||||||
RES | ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Plan term | 5 years | ||||||||||||||||||||||||||||||||||||||
RES 2018 | ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 95,100,000 | $ 86,200,000 | $ 100,500,000 | $ 93,100,000 | |||||||||||||||||||||||||||||||||||
RES 2018 | ACC | APS | Subsequent Event | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 92,700,000 | ||||||||||||||||||||||||||||||||||||||
RES 2018 | ACC | APS | Solar Communities | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Program term | 3 years | ||||||||||||||||||||||||||||||||||||||
RES 2018 | ACC | APS | Minimum | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Authorized spending | $ 20,000,000 | ||||||||||||||||||||||||||||||||||||||
RES 2018 | ACC | APS | Maximum | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Authorized spending | $ 30,000,000 | ||||||||||||||||||||||||||||||||||||||
Retail Rate Case Filing with Arizona Corporation Commission | APS | Maximum | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Fixed cost recoverable per power lost (in dollars per kWh) | $ / KWH_Kilowatt_hour | 2.68 | ||||||||||||||||||||||||||||||||||||||
Retail Rate Case Filing with Arizona Corporation Commission | ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Commercial customers, market pricing, threshold | MW | 140 | ||||||||||||||||||||||||||||||||||||||
Demand Side Management Adjustor Charge 2022 | ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 78,400,000 | ||||||||||||||||||||||||||||||||||||||
Increase in proposed budget | $ 14,000,000 | ||||||||||||||||||||||||||||||||||||||
2023 Transportation Electrification Plan | ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 5,000,000 | ||||||||||||||||||||||||||||||||||||||
Demand Side Management Adjustor Charge 2023 | ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 88,000,000 | $ 88,000,000 | |||||||||||||||||||||||||||||||||||||
Demand Side Management Adjustor Charge 2024 | ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Amount of proposed budget | $ 91,500,000 | ||||||||||||||||||||||||||||||||||||||
Power Supply Adjustor (PSA) | ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
PSA rate (in dollars per kWh) | $ / kWh | 0.019074 | 0.019074 | 0.006 | 0.007544 | |||||||||||||||||||||||||||||||||||
PSA rate for prior year (in dollars per kWh) | $ / kWh | (0.012624) | (0.005527) | 0.004842 | ||||||||||||||||||||||||||||||||||||
Forward component of increase in PSA (in dollars per kWh) | $ / kWh | 0.013071 | 0.013071 | 0.012386 | ||||||||||||||||||||||||||||||||||||
Transition component of PSA rate | $ / kWh | 0.011530 | 0.011530 | |||||||||||||||||||||||||||||||||||||
Depletion period | 24 months | ||||||||||||||||||||||||||||||||||||||
Reporting threshold amount of balancing account | $ 100,000,000 | ||||||||||||||||||||||||||||||||||||||
Approved PSA rate | $ / kWh | 0.011977 | ||||||||||||||||||||||||||||||||||||||
Power Supply Adjustor (PSA) | ACC | APS | Cost Recovery Mechanisms | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Maximum increase decrease in PSA rate | $ / kWh | 0.006 | ||||||||||||||||||||||||||||||||||||||
Historical component of increase in PSA (in dollars per kWh) | $ / kWh | 0.004 | ||||||||||||||||||||||||||||||||||||||
Environmental Improvement Surcharge | FERC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Increase (decrease) in annual wholesale transmission rates | $ (10,700,000) | $ 14,700,000 | |||||||||||||||||||||||||||||||||||||
Rate matters, increase (decrease) in cost recovery, excess of annual amount | (7,500,000) | $ 3,300,000 | |||||||||||||||||||||||||||||||||||||
Rate matter, environmental surcharge cap rate amount | $ 4,000,000 | ||||||||||||||||||||||||||||||||||||||
Open Access Transmission Tariff | FERC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Increase (decrease) in annual wholesale transmission rates | $ 27,400,000 | $ 34,700,000 | $ (33,000,000) | ||||||||||||||||||||||||||||||||||||
Rate matters, increase (decrease) in cost recovery, wholesale customer rates | 16,600,000 | 20,700,000 | (6,400,000) | ||||||||||||||||||||||||||||||||||||
Increase (decrease) in retail customer rates | 10,800,000 | 14,000,000 | (26,600,000) | ||||||||||||||||||||||||||||||||||||
Rate matters, increase (decrease) in retail revenue requirements | $ 8,800,000 | $ (10,000,000) | $ (2,400,000) | ||||||||||||||||||||||||||||||||||||
Rate matters, increase in residential and commercial rates (in MW) | MW | 3 | ||||||||||||||||||||||||||||||||||||||
Rate matters, decrease in commercial rates (in MW) | MW | 3 | ||||||||||||||||||||||||||||||||||||||
Lost Fixed Cost Recovery Mechanisms | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Percentage of retail revenues | 1% | ||||||||||||||||||||||||||||||||||||||
Fixed cost recoverable per power lost (in dollars per kWh) | $ / KWH_Kilowatt_hour | 2.56 | ||||||||||||||||||||||||||||||||||||||
Amount of adjustment representing prorated sales losses pending approval | $ 68,700,000 | $ 59,100,000 | |||||||||||||||||||||||||||||||||||||
Increase (decrease) in amount of adjustment representing prorated sales losses | $ 32,500,000 | $ 11,800,000 | |||||||||||||||||||||||||||||||||||||
Amount of adjustment representing annual recovery | $ 9,600,000 | ||||||||||||||||||||||||||||||||||||||
Lost Fixed Cost Recovery Mechanisms | APS | Subsequent Event | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Amount of adjustment representing prorated sales losses pending approval | $ 49,600,000 | ||||||||||||||||||||||||||||||||||||||
Amount of adjustment representing annual recovery | $ 8,000,000 | ||||||||||||||||||||||||||||||||||||||
Lost Fixed Cost Recovery Mechanisms | ACC | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Amount of adjustment approved to transfer | $ 27,100,000 | ||||||||||||||||||||||||||||||||||||||
Court Resolution Surcharge | ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Court resolution surcharge (in dollars per kWh) | $ / KWH_Kilowatt_hour | 0.00175 | ||||||||||||||||||||||||||||||||||||||
Lost revenue recovery | $ 59,600,000 | ||||||||||||||||||||||||||||||||||||||
Navajo Nation Reservation | Coal Community Transition Plan | APS | Coal Community Transition Plan | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Lost revenue recovery collected | $ 16,800,000 | ||||||||||||||||||||||||||||||||||||||
Net Metering | ACC | APS | |||||||||||||||||||||||||||||||||||||||
Public Utilities, General Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||
Cost of service, resource comparison proxy method, maximum annual percentage decrease | 10% | 10% | 10% | 10% | 10% | ||||||||||||||||||||||||||||||||||
Cost of service for interconnected DG system customers, grandfathered period | 20 years | ||||||||||||||||||||||||||||||||||||||
Cost of service for new customers, guaranteed export price period | 10 years | ||||||||||||||||||||||||||||||||||||||
Second-year export energy price (in dollars per kWh) | $ / kWh | 0.0846 | 0.094 | |||||||||||||||||||||||||||||||||||||
Third-year export energy price (in dollars per kWh) | $ / kWh | 6.857 | 0.07619 | |||||||||||||||||||||||||||||||||||||
Rate lock period | 10 years |
Regulatory Matters - Schedule o
Regulatory Matters - Schedule of Changes in The Deferred Fuel and Purchased Power Regulatory Asset (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Change in regulatory asset | ||
Deferred fuel and purchased power costs — current period | $ 64,220 | $ 191,304 |
Amounts charged to customers | (204,748) | (218,586) |
APS | ||
Change in regulatory asset | ||
Deferred fuel and purchased power costs — current period | 64,220 | 191,304 |
Amounts charged to customers | (204,748) | (218,586) |
Power Supply Adjustor (PSA) | ACC | APS | ||
Change in regulatory asset | ||
Beginning balance | 463,195 | 460,561 |
Deferred fuel and purchased power costs — current period | 64,220 | 191,304 |
Amounts charged to customers | (204,748) | (218,586) |
Ending balance | $ 322,667 | $ 433,279 |
Regulatory Matters - Four Corne
Regulatory Matters - Four Corners, Cholla and Navajo Plant (Details) - APS - USD ($) $ in Millions | 1 Months Ended | ||||
Nov. 02, 2021 | Sep. 30, 2018 | Apr. 30, 2018 | Jun. 30, 2024 | Aug. 02, 2021 | |
Navajo Nation, Economic Development Organization | Coal Community Transition Plan | Retail Rate Case Filing with Arizona Corporation Commission | ACC | |||||
Business Acquisition [Line Items] | |||||
Disallowance of annual amortization percentage | 15% | ||||
Retired power plant costs | |||||
Business Acquisition [Line Items] | |||||
Net book value | $ 30.4 | ||||
Navajo Plant | |||||
Business Acquisition [Line Items] | |||||
Net book value | 38.2 | ||||
Navajo Plant, Coal Reclamation Regulatory Asset | |||||
Business Acquisition [Line Items] | |||||
Net book value | $ 9.4 | ||||
SCE | Four Corners Units 4 and 5 | |||||
Business Acquisition [Line Items] | |||||
Settlement agreement, ACC approved rate adjustment, annualized customer impact | $ 58.5 | $ 67.5 | |||
Disallowance of plant investments | $ 194 | ||||
Cost deferrals | $ 215.5 |
Regulatory Matters - Schedule_2
Regulatory Matters - Schedule of Regulatory Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Detail of regulatory assets | ||
Total regulatory assets | $ 1,850,911 | $ 2,016,036 |
Less: current regulatory assets | 491,933 | 625,757 |
Total non-current regulatory assets | 1,358,978 | 1,390,279 |
Pension | ||
Detail of regulatory assets | ||
Total regulatory assets | 687,741 | 696,476 |
Deferred fuel and purchased power | ||
Detail of regulatory assets | ||
Total regulatory assets | 322,667 | 463,195 |
Income taxes — allowance for funds used during construction (“AFUDC”) equity | ||
Detail of regulatory assets | ||
Total regulatory assets | 190,884 | 189,058 |
Ocotillo deferral | ||
Detail of regulatory assets | ||
Total regulatory assets | 122,197 | 128,636 |
Deferred fuel and purchased power — mark-to-market (Note 7) | ||
Detail of regulatory assets | ||
Total regulatory assets | 122,147 | 120,214 |
SCR deferral | ||
Detail of regulatory assets | ||
Total regulatory assets | 86,092 | 89,477 |
Retired power plant costs | ||
Detail of regulatory assets | ||
Total regulatory assets | 75,958 | 83,536 |
Lease incentives | ||
Detail of regulatory assets | ||
Total regulatory assets | 57,542 | 46,615 |
Income taxes — investment tax credit basis adjustment | ||
Detail of regulatory assets | ||
Total regulatory assets | 35,450 | 34,230 |
Deferred compensation | ||
Detail of regulatory assets | ||
Total regulatory assets | 33,923 | 33,972 |
Deferred property taxes | ||
Detail of regulatory assets | ||
Total regulatory assets | 28,203 | 32,488 |
Palo Verde VIEs (Note 6) | ||
Detail of regulatory assets | ||
Total regulatory assets | 20,692 | 20,772 |
Active Union Medical Trust | ||
Detail of regulatory assets | ||
Total regulatory assets | 13,061 | 12,747 |
FERC Transmission true up | ||
Detail of regulatory assets | ||
Total regulatory assets | 10,073 | 616 |
Navajo coal reclamation | ||
Detail of regulatory assets | ||
Total regulatory assets | 9,394 | 10,883 |
Mead-Phoenix transmission line contributions in aid of construction (“CIAC”) | ||
Detail of regulatory assets | ||
Total regulatory assets | 8,550 | 8,716 |
Loss on reacquired debt | ||
Detail of regulatory assets | ||
Total regulatory assets | 7,324 | 7,965 |
Power supply adjustor - interest | ||
Detail of regulatory assets | ||
Total regulatory assets | 5,848 | 19,416 |
Tax expense adjustor mechanism | ||
Detail of regulatory assets | ||
Total regulatory assets | 4,862 | 5,190 |
Four Corners cost deferral | ||
Detail of regulatory assets | ||
Total regulatory assets | 3,884 | 7,922 |
Other | ||
Detail of regulatory assets | ||
Total regulatory assets | $ 4,419 | $ 3,912 |
Regulatory Matters - Schedule_3
Regulatory Matters - Schedule of Regulatory Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Detail of regulatory liabilities | ||
Total regulatory liabilities | $ 2,041,781 | $ 2,175,788 |
Less: current regulatory liabilities | 230,551 | 209,923 |
Total non-current regulatory liabilities | 1,811,230 | 1,965,865 |
Asset retirement obligations | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 303,303 | 392,383 |
Other postretirement benefits | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 205,107 | 226,726 |
Removal costs | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 82,823 | 94,368 |
Income taxes — deferred investment tax credit | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 67,435 | 68,521 |
Income taxes — change in rates | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 59,578 | 60,667 |
Four Corners coal reclamation | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 57,493 | 55,917 |
Renewable energy standard | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 48,327 | 43,251 |
Spent nuclear fuel | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 29,415 | 33,154 |
Demand side management | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 26,333 | 14,374 |
Sundance maintenance | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 21,537 | 19,989 |
Property tax deferral | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 7,826 | 10,850 |
Tax expense adjustor mechanism | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 4,645 | 4,835 |
FERC Transmission true up | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 0 | 1,869 |
Other | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 1,642 | 3,873 |
ACC | Excess deferred income taxes - Tax Act | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | 914,436 | 930,344 |
FERC | Excess deferred income taxes - Tax Act | ||
Detail of regulatory liabilities | ||
Total regulatory liabilities | $ 211,881 | $ 214,667 |
Retirement Plans and Other Po_3
Retirement Plans and Other Postretirement Benefits - Schedule of Net Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Amortization of: | ||||
Portion of cost/(benefit) charged to expense | $ (12,877) | $ (10,474) | $ (24,445) | $ (20,339) |
Pension Benefits | ||||
Retirement Plans and Other Benefits | ||||
Service cost — benefits earned during the period | 11,190 | 9,573 | 21,821 | 19,730 |
Interest cost on benefit obligation | 37,085 | 38,418 | 74,321 | 76,780 |
Expected return on plan assets | (47,342) | (45,908) | (94,325) | (91,469) |
Amortization of: | ||||
Prior service credit | 0 | 0 | 0 | 0 |
Net actuarial loss/(gain) | 10,014 | 9,497 | 20,958 | 19,210 |
Net periodic cost/(benefit) | 10,947 | 11,580 | 22,775 | 24,251 |
Portion of cost/(benefit) charged to expense | 5,500 | 6,513 | 11,837 | 13,740 |
Other Benefits | ||||
Retirement Plans and Other Benefits | ||||
Service cost — benefits earned during the period | 2,518 | 2,164 | 4,977 | 4,284 |
Interest cost on benefit obligation | 5,472 | 5,582 | 11,085 | 11,255 |
Expected return on plan assets | (11,708) | (10,872) | (23,417) | (21,744) |
Amortization of: | ||||
Prior service credit | (9,447) | (9,447) | (18,894) | (18,894) |
Net actuarial loss/(gain) | (2,258) | (2,504) | (4,338) | (4,807) |
Net periodic cost/(benefit) | (15,423) | (15,077) | (30,587) | (29,906) |
Portion of cost/(benefit) charged to expense | $ (11,515) | $ (10,948) | $ (22,821) | $ (21,685) |
Retirement Plans and Other Po_4
Retirement Plans and Other Postretirement Benefits - Narrative (Details) | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Pension Benefits | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Minimum employer contributions for the next three years | $ 0 |
Palo Verde Sale Leaseback Var_3
Palo Verde Sale Leaseback Variable Interest Entities - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) lease | Jun. 30, 2023 USD ($) | Dec. 31, 1986 numberOfTrust | |
Palo Verde Sale Leaseback Variable Interest Entities | |||||
Less: Net income attributable to noncontrolling interests (Note 6) | $ 4,306 | $ 4,306 | $ 8,612 | $ 8,612 | |
APS | |||||
Palo Verde Sale Leaseback Variable Interest Entities | |||||
Less: Net income attributable to noncontrolling interests (Note 6) | 4,306 | 4,306 | 8,612 | 8,612 | |
Palo Verde VIE | APS | |||||
Palo Verde Sale Leaseback Variable Interest Entities | |||||
Number of VIE lessor trusts | numberOfTrust | 3 | ||||
Less: Net income attributable to noncontrolling interests (Note 6) | $ 4,000 | $ 4,000 | 9,000 | $ 9,000 | |
Initial loss exposure to the VIE's noncontrolling equity participants during lease extension period | 334,000 | ||||
Palo Verde VIE | APS | Maximum | |||||
Palo Verde Sale Leaseback Variable Interest Entities | |||||
Maximum loss exposure to the VIE's noncontrolling equity participants during lease extension period (up to) | $ 501,000 | ||||
Palo Verde VIE | APS | Period Through 2033 | |||||
Palo Verde Sale Leaseback Variable Interest Entities | |||||
Number of leases under which assets are retained | lease | 3 | ||||
Annual lease payments | $ 21,000 | ||||
Palo Verde VIE | APS | Period Through 2033 | Maximum | |||||
Palo Verde Sale Leaseback Variable Interest Entities | |||||
Lease period (up to) | 2 years |
Palo Verde Sale Leaseback Var_4
Palo Verde Sale Leaseback Variable Interest Entities - Schedule of VIEs (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Palo Verde Sale Leaseback Variable Interest Entities | ||
Palo Verde sale leaseback property, plant and equipment, net of accumulated depreciation | $ 18,566,714 | $ 17,980,157 |
Amounts relating to the VIEs included in Condensed Consolidated Balance Sheets | ||
Equity — Noncontrolling interests | 105,183 | 107,198 |
APS | ||
Palo Verde Sale Leaseback Variable Interest Entities | ||
Palo Verde sale leaseback property, plant and equipment, net of accumulated depreciation | 18,566,425 | 17,979,860 |
Amounts relating to the VIEs included in Condensed Consolidated Balance Sheets | ||
Equity — Noncontrolling interests | 105,183 | 107,198 |
Palo Verde VIE | APS | ||
Palo Verde Sale Leaseback Variable Interest Entities | ||
Palo Verde sale leaseback property, plant and equipment, net of accumulated depreciation | 84,491 | 86,426 |
Amounts relating to the VIEs included in Condensed Consolidated Balance Sheets | ||
Equity — Noncontrolling interests | $ 105,183 | $ 107,198 |
Derivative Accounting - Narrati
Derivative Accounting - Narrative (Details) $ in Millions | Jun. 30, 2024 USD ($) |
Commodity Contracts | |
Derivative Accounting | |
Additional collateral to counterparties for energy related non-derivative instrument contracts | $ 206 |
APS | |
Derivative Accounting | |
Percentage of unrealized gains and losses on certain derivatives deferred for future rate treatment | 100% |
Derivative Accounting - Schedul
Derivative Accounting - Schedule of Gross Notional Amounts Outstanding (Details) - Commodity Contracts MWh in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 MWh Bcf | Dec. 31, 2023 MWh Bcf | |
Outstanding gross notional amount of derivatives | ||
Power | MWh | 1,976 | 1,212 |
Gas | Bcf | 228,000 | 200,000 |
Derivative Accounting - Gains a
Derivative Accounting - Gains and Losses from Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Commodity Contracts | Not Designated as Hedging Instruments | Fuel and Purchased Power | ||||
Gains and losses from derivative instruments | ||||
Derivative instruments not designated as hedging instruments, gain (loss), net | $ (2,752) | $ (50,145) | $ (58,694) | $ (239,075) |
Derivative Accounting - Derivat
Derivative Accounting - Derivative Instruments in the Balance Sheets (Details) - Commodity Contracts - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Gross recognized derivatives | $ 3,445 | $ 8,497 |
Amounts offset | (2,690) | (1,694) |
Net Recognized Derivatives | 755 | 6,803 |
Other | 5 | 5 |
Amounts Reported on Balance Sheets | 760 | 6,808 |
Liabilities | ||
Gross recognized derivatives | (125,592) | (128,711) |
Amounts offset | 2,690 | 10,894 |
Net Recognized Derivatives | (122,902) | (117,817) |
Other | (7,771) | (6,071) |
Amounts Reported on Balance Sheets | (130,673) | (123,888) |
Assets and Liabilities | ||
Gross recognized derivatives | (122,147) | (120,214) |
Amounts offset | 0 | 9,200 |
Net Recognized Derivatives | (122,147) | (111,014) |
Other | (7,766) | (6,066) |
Amounts Reported on Balance Sheets | (129,913) | (117,080) |
Cash collateral received subject to offsetting | 0 | |
Cash collateral received from counterparties | 7,771 | 6,071 |
Current assets | ||
Assets | ||
Gross recognized derivatives | 3,445 | 8,497 |
Amounts offset | (2,690) | (1,694) |
Net Recognized Derivatives | 755 | 6,803 |
Other | 5 | 5 |
Amounts Reported on Balance Sheets | 760 | 6,808 |
Investments and other assets | ||
Assets | ||
Gross recognized derivatives | 0 | 0 |
Amounts offset | 0 | 0 |
Net Recognized Derivatives | 0 | 0 |
Other | 0 | 0 |
Amounts Reported on Balance Sheets | 0 | 0 |
Current liabilities | ||
Liabilities | ||
Gross recognized derivatives | (99,228) | (85,736) |
Amounts offset | 2,690 | 10,894 |
Net Recognized Derivatives | (96,538) | (74,842) |
Other | (7,771) | (6,071) |
Amounts Reported on Balance Sheets | (104,309) | (80,913) |
Assets and Liabilities | ||
Cash collateral received from counterparties | 7,771 | 6,071 |
Deferred credits and other | ||
Liabilities | ||
Gross recognized derivatives | (26,364) | (42,975) |
Amounts offset | 0 | 0 |
Net Recognized Derivatives | (26,364) | (42,975) |
Other | 0 | 0 |
Amounts Reported on Balance Sheets | (26,364) | (42,975) |
Assets and Liabilities | ||
Cash collateral received from counterparties | $ 0 | $ 0 |
Derivative Accounting - Credit
Derivative Accounting - Credit Risk and Credit Related Contingent Features (Details) - Commodity Contracts $ in Thousands | Jun. 30, 2024 USD ($) |
Credit Risk and Credit-Related Contingent Features | |
Aggregate fair value of derivative instruments in a net liability position | $ 125,592 |
Additional cash collateral in the event credit-risk-related contingent features were fully triggered | $ 102,486 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 6 Months Ended | 136 Months Ended | ||||||||
Mar. 21, 2024 USD ($) | Jan. 01, 2024 USD ($) trust | Oct. 31, 2023 claim | Jan. 17, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jul. 03, 2018 | Aug. 18, 2014 USD ($) | Jun. 30, 2024 USD ($) trust MW | Oct. 31, 2022 claim timePeriod | Apr. 18, 2023 USD ($) | |
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Production tax credit guarantees | $ 30,000 | |||||||||
Kūpono Solar | ||||||||||
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Non recourse construction financing agreement | $ 140,000 | |||||||||
Kūpono Solar | ||||||||||
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Project plant capacity (in MW's) | MW | 42 | |||||||||
Asset purchase agreement | 20 years | |||||||||
APS | ||||||||||
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Maximum insurance against public liability per occurrence for a nuclear incident (up to) | $ 16,300,000 | |||||||||
Maximum available nuclear liability insurance (up to) | 500,000 | |||||||||
Remaining nuclear liability insurance through mandatory industry wide retrospective assessment program | 15,800,000 | |||||||||
Maximum retrospective premium assessment per reactor for each nuclear liability incident | 165,900 | |||||||||
Annual limit per incident with respect to maximum retrospective premium assessment | $ 24,700 | |||||||||
Number of VIE lessor trusts | trust | 3 | 3 | ||||||||
Maximum potential retrospective assessment per incident of APS | $ 144,900 | |||||||||
Annual payment limitation with respect to maximum potential retrospective premium assessment | $ 21,600 | |||||||||
Amount of "all risk" (including nuclear hazards) insurance for property damage to, and decontamination of, property at Palo Verde | $ 2,800,000 | |||||||||
Maximum amount that could be incurred under retrospective assessment of NEIL policies | 23,100 | |||||||||
Collateral assurance provided based on rating triggers | $ 64,100 | |||||||||
Period to provide collateral assurance based on rating triggers | 20 days | |||||||||
Increase in contractual obligations | $ 1,500,000 | |||||||||
APS | Surety Bonds Expiring in 2025 | ||||||||||
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Surety bonds expiring, amount | 20,000 | |||||||||
APS | Letter of Credit | ||||||||||
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Outstanding letters of credit | 27,000 | |||||||||
APS | Contaminated groundwater wells | ||||||||||
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Costs related to investigation and study under Superfund site | 3,000 | |||||||||
Costs related to oversight and remedial investigation of superfund site | $ 1,700 | |||||||||
APS | Contaminated groundwater wells | Pending Litigation | ||||||||||
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Settlement amount | $ 20,700 | |||||||||
NTEC | Four Corners | ||||||||||
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Asset purchase agreement, option to purchase, ownership interest, percentage | 7% | |||||||||
Breach of Contract for Disposal of Spent Nuclear Fuel and/or High Level Radioactive Waste | ||||||||||
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Amount awarded from other party | $ 18,390 | $ 18,460 | 138,200 | |||||||
Breach of Contract for Disposal of Spent Nuclear Fuel and/or High Level Radioactive Waste | APS | ||||||||||
Schedule of Commitments and Contingencies [Line Items] | ||||||||||
Number of claims submitted | claim | 10 | 9 | ||||||||
Gain contingency, number of settlement agreement time periods | timePeriod | 9 | |||||||||
Amount awarded from other party | $ 5,400 | $ 40,200 |
Other Income and Other Expens_2
Other Income and Other Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Other income: | ||||
Interest income | $ 5,396 | $ 6,406 | $ 12,956 | $ 12,432 |
Gain on sale of BCE (Note 16) | 0 | 0 | 22,988 | 0 |
Miscellaneous | 489 | 0 | 548 | 51 |
Total other income | 5,885 | 6,406 | 36,492 | 12,483 |
Other expense: | ||||
Non-operating costs | (2,038) | (3,355) | (8,188) | (5,996) |
Investment losses — net | (497) | (434) | (1,274) | (1,495) |
Miscellaneous | (497) | (1,024) | (1,137) | (1,453) |
Total other expense | (3,032) | (4,813) | (10,599) | (8,944) |
APS | ||||
Other income: | ||||
Interest income | 4,602 | 5,691 | 11,398 | 10,716 |
Miscellaneous | (11) | 0 | 48 | 51 |
Total other income | 4,591 | 5,691 | 11,446 | 10,767 |
Other expense: | ||||
Non-operating costs | (2,397) | (3,111) | (4,652) | (5,299) |
Miscellaneous | (497) | (1,024) | (1,136) | (1,453) |
Total other expense | $ (2,894) | $ (4,135) | $ (5,788) | $ (6,752) |
Earnings Per Share and Equity_3
Earnings Per Share and Equity Forward Sale Agreements - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |
Feb. 28, 2024 | Jun. 30, 2024 | Jun. 30, 2024 | |
Subsidiary, Sale of Stock [Line Items] | |||
Antidilutive securities excluded from computation of EPS (in shares) | 348,499,000 | 348,499,000 | |
Pinnacle West | Convertible Notes Due Maturing June 2027 | Convertible Debt | |||
Subsidiary, Sale of Stock [Line Items] | |||
Debt instrument, face amount | $ 525 | $ 525 | |
Debt instrument, interest rate | 4.75% | 4.75% | |
Forward Sale Agreements | |||
Subsidiary, Sale of Stock [Line Items] | |||
Sale of stock, issued in transaction (in shares) | 11,240,601 | ||
Forward Sale Agreements | Pinnacle West | |||
Subsidiary, Sale of Stock [Line Items] | |||
Sale of stock (in dollars per share) | $ 64.51 | ||
Sale of stock, settlement terms (in shares) | 11,240,601 | ||
Sale of stock, settlement proceeds from issuance of common stock | $ 726 |
Earnings Per Share and Equity_4
Earnings Per Share and Equity Forward Sale Agreements - Schedule of Earnings Per Weighted Average Common Share Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to common shareholders | $ 203,805 | $ 106,663 | $ 220,667 | $ 103,366 |
Weighted average common shares outstanding - basic (in shares) | 113,695 | 113,411 | 113,658 | 113,385 |
Net effect of dilutive securities: | ||||
Contingently issuable performance shares and restricted stock units (in shares) | 489 | 306 | 408 | 272 |
Dilutive shares related to equity forward sale agreements (in shares) | 1,619 | 0 | 949 | 0 |
Total contingently issuable shares (in shares) | 2,108 | 306 | 1,357 | 272 |
Weighted average common shares outstanding — diluted (in shares) | 115,803 | 113,717 | 115,015 | 113,657 |
Earnings per weighted-average common share outstanding: | ||||
Net income attributable to common shareholders — basic (in dollars per share) | $ 1.79 | $ 0.94 | $ 1.94 | $ 0.91 |
Net income attributable to common shareholders — diluted (in dollars per share) | $ 1.76 | $ 0.94 | $ 1.92 | $ 0.91 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
ASSETS | ||
Cash equivalents | $ 16 | $ 10 |
Nuclear decommissioning trust: | 1,245,593 | 1,201,246 |
Nuclear decommissioning trust, other | 392,452 | 408,849 |
Other special use funds | 367,804 | 362,781 |
Other special use funds, other | 2,287 | 2,196 |
Total assets | 1,614,173 | 1,570,845 |
Total assets, other | 392,054 | 409,356 |
Commodity contracts | ||
ASSETS | ||
Commodity contracts, assets | 760 | 6,808 |
Commodity contracts assets, other | (2,685) | (1,689) |
LIABILITIES | ||
Gross derivative liability, other | (5,081) | 4,823 |
Interest rate swaps | (130,673) | (123,888) |
Equity securities | ||
ASSETS | ||
Nuclear decommissioning trust: | 18,241 | 10,297 |
Nuclear decommissioning trust, other | 1,444 | (767) |
Other special use funds | 49,076 | 43,187 |
Other special use funds, other | 2,287 | 2,196 |
U.S. commingled equity funds | ||
ASSETS | ||
Nuclear decommissioning trust: | 391,008 | 409,616 |
U.S. Treasury debt | ||
ASSETS | ||
Nuclear decommissioning trust: | 323,847 | 319,734 |
Other special use funds | 318,728 | 319,594 |
Corporate debt | ||
ASSETS | ||
Nuclear decommissioning trust: | 219,337 | 188,317 |
Mortgage-backed securities | ||
ASSETS | ||
Nuclear decommissioning trust: | 215,154 | 208,306 |
Municipal bonds | ||
ASSETS | ||
Nuclear decommissioning trust: | 48,332 | 59,323 |
Other fixed income | ||
ASSETS | ||
Nuclear decommissioning trust: | 29,674 | 5,653 |
Level 1 | ||
ASSETS | ||
Cash equivalents | 16 | 10 |
Nuclear decommissioning trust: | 340,644 | 330,798 |
Other special use funds | 365,517 | 360,585 |
Total assets | 706,177 | 691,393 |
Level 1 | Commodity contracts | ||
ASSETS | ||
Commodity contracts, assets | 0 | 0 |
LIABILITIES | ||
Gross derivative liability | 0 | 0 |
Level 1 | Equity securities | ||
ASSETS | ||
Nuclear decommissioning trust: | 16,797 | 11,064 |
Other special use funds | 46,789 | 40,991 |
Level 1 | U.S. commingled equity funds | ||
ASSETS | ||
Nuclear decommissioning trust: | 0 | 0 |
Level 1 | U.S. Treasury debt | ||
ASSETS | ||
Nuclear decommissioning trust: | 323,847 | 319,734 |
Other special use funds | 318,728 | 319,594 |
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 |
Level 1 | Other fixed income | ||
ASSETS | ||
Nuclear decommissioning trust: | 0 | 0 |
Level 2 | ||
ASSETS | ||
Cash equivalents | 0 | 0 |
Nuclear decommissioning trust: | 512,497 | 461,599 |
Other special use funds | 0 | 0 |
Total assets | 515,704 | 463,480 |
Level 2 | Commodity contracts | ||
ASSETS | ||
Commodity contracts, assets | 3,207 | 1,881 |
LIABILITIES | ||
Gross derivative liability | (103,714) | (127,016) |
Level 2 | Equity securities | ||
ASSETS | ||
Nuclear decommissioning trust: | 0 | 0 |
Other special use funds | 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 funds | 0 | 0 |
Level 2 | Corporate debt | ||
ASSETS | ||
Nuclear decommissioning trust: | 219,337 | 188,317 |
Level 2 | Mortgage-backed securities | ||
ASSETS | ||
Nuclear decommissioning trust: | 215,154 | 208,306 |
Level 2 | Municipal bonds | ||
ASSETS | ||
Nuclear decommissioning trust: | 48,332 | 59,323 |
Level 2 | Other fixed income | ||
ASSETS | ||
Nuclear decommissioning trust: | 29,674 | 5,653 |
Level 3 | ||
ASSETS | ||
Cash equivalents | 0 | 0 |
Nuclear decommissioning trust: | 0 | 0 |
Other special use funds | 0 | 0 |
Total assets | 238 | 6,616 |
Level 3 | Commodity contracts | ||
ASSETS | ||
Commodity contracts, assets | 238 | 6,616 |
LIABILITIES | ||
Gross derivative liability | (21,878) | (1,695) |
Level 3 | Equity securities | ||
ASSETS | ||
Nuclear decommissioning trust: | 0 | 0 |
Other special use funds | 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 funds | 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 |
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: | $ 391,008 | $ 409,616 |
Fair Value Measurements - Signi
Fair Value Measurements - Significant Unobservable Inputs Used to Value Level 3 Instruments (Details) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 USD ($) $ / MWh $ / MMBTU | Dec. 31, 2023 USD ($) $ / MMBTU $ / MWh | |
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Assets, Fair Value Disclosure | $ 1,614,173 | $ 1,570,845 |
Level 3 | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Assets, Fair Value Disclosure | 238 | 6,616 |
Commodity Contracts | Level 3 | Forward Contracts | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Assets, Fair Value Disclosure | 238 | 6,616 |
Liabilities, Fair Value Disclosure | $ 21,878 | $ 1,695 |
Commodity Contracts | Level 3 | Forward Contracts | Valuation Technique, Discounted Cash Flow | Minimum | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Electricity forward price (in usd per MWh) | $ / MWh | 25.27 | 37.79 |
Natural gas forward price (in usd per MMBTu) | $ / MMBTU | (0.10) | 0 |
Commodity Contracts | Level 3 | Forward Contracts | Valuation Technique, Discounted Cash Flow | Maximum | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Electricity forward price (in usd per MWh) | $ / MWh | 240.98 | 259.04 |
Natural gas forward price (in usd per MMBTu) | $ / MMBTU | 0 | 0.08 |
Commodity Contracts | Level 3 | Forward Contracts | Valuation Technique, Discounted Cash Flow | Weighted-Average | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Electricity forward price (in usd per MWh) | $ / MWh | 142.10 | 158.08 |
Natural gas forward price (in usd per MMBTu) | $ / MMBTU | (0.04) | 0.03 |
Commodity Option | Level 3 | Forward Contracts | Valuation Technique, Discounted Cash Flow | Minimum | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Electricity forward price (in usd per MWh) | $ / MWh | 43.90 | |
Electricity price volatilities | 2.35 | |
Natural gas price volatilities | 0.65 | |
Commodity Option | Level 3 | Forward Contracts | Valuation Technique, Discounted Cash Flow | Maximum | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Electricity forward price (in usd per MWh) | $ / MWh | 68.60 | |
Electricity price volatilities | 3.84 | |
Natural gas price volatilities | 0.86 | |
Commodity Option | Level 3 | Forward Contracts | Valuation Technique, Discounted Cash Flow | Weighted-Average | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Electricity forward price (in usd per MWh) | $ / MWh | 53.66 | |
Electricity price volatilities | 2.96 | |
Natural gas price volatilities | 0.78 | |
Electricity | Commodity Contracts | Level 3 | Forward Contracts | Valuation Technique, Discounted Cash Flow | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Assets, Fair Value Disclosure | $ 238 | $ 6,587 |
Liabilities, Fair Value Disclosure | 19,228 | 658 |
Electricity | Commodity Option | Level 3 | Forward Contracts | Valuation Technique, Discounted Cash Flow | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Assets, Fair Value Disclosure | 0 | |
Liabilities, Fair Value Disclosure | 573 | |
Natural Gas | Commodity Contracts | Level 3 | Forward Contracts | Valuation Technique, Discounted Cash Flow | ||
Information regarding the entity's internally developed significant unobservable inputs used to value its level 3 instruments | ||
Assets, Fair Value Disclosure | 0 | 29 |
Liabilities, Fair Value Disclosure | $ 2,077 | $ 1,037 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value For Our Risk Management Activities (Details) - Commodity Contracts - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Net derivative balance at beginning of period | $ (15,971) | $ 6,622 | $ 4,921 | $ (4,888) |
Deferred as a regulatory asset or liability | (9,808) | (26,859) | (33,408) | (57,286) |
Settlements | 7,240 | 8,641 | 9,948 | 50,578 |
Transfers into Level 3 from Level 2 | (4,565) | (1,289) | (4,565) | (1,289) |
Transfers from Level 3 into Level 2 | 1,464 | 11,606 | 1,464 | 11,606 |
Net derivative balance at end of period | (21,640) | (1,279) | (21,640) | (1,279) |
Net unrealized gains included in earnings related to instruments still held at end of period | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Millions | Jan. 31, 2024 USD ($) |
Variable Interest Entity, Not Primary Beneficiary | BCE | Level 3 | Fair Value, Nonrecurring | |
Fair value of assets and liabilities that are measured at fair value on a recurring basis | |
Fair value of performance obligations | $ 2 |
Investments in Nuclear Decomm_3
Investments in Nuclear Decommissioning Trusts and Other Special Use Funds - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
APS | |
Schedule of Equity Method Investments [Line Items] | |
Employee medical claims amount | $ 14 |
Investments in Nuclear Decomm_4
Investments in Nuclear Decommissioning Trusts and Other Special Use Funds (Details) - APS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Nuclear decommissioning trust fund assets | |||||
Fair Value | $ 1,613,397 | $ 1,613,397 | $ 1,564,027 | ||
Total Unrealized Gains | 341,911 | 358,112 | |||
Total Unrealized Losses | (38,947) | (40,868) | |||
Amortized cost | 1,185,000 | 1,185,000 | 1,120,000 | ||
Realized gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds | |||||
Realized gains | 8,943 | $ 35,231 | 63,515 | $ 36,441 | |
Realized losses | (3,706) | (11,192) | (6,521) | (16,886) | |
Proceeds from the sale of securities | 328,505 | 340,902 | 772,375 | 567,528 | |
Nuclear Decommissioning Trusts | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 1,245,593 | 1,245,593 | 1,201,246 | ||
Realized gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds | |||||
Realized gains | 8,943 | 35,231 | 63,435 | 36,441 | |
Realized losses | (3,706) | (11,192) | (6,521) | (16,886) | |
Proceeds from the sale of securities | 270,631 | 298,761 | 648,453 | 434,946 | |
Other Special Use Funds | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 367,804 | 367,804 | 362,781 | ||
Realized gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds | |||||
Realized gains | 0 | 0 | 80 | 0 | |
Realized losses | 0 | 0 | 0 | 0 | |
Proceeds from the sale of securities | 57,874 | $ 42,141 | 123,922 | $ 132,582 | |
Equity securities | |||||
Nuclear decommissioning trust fund assets | |||||
Equity securities | 454,594 | 454,594 | 461,671 | ||
Total Unrealized Gains | 332,335 | 336,555 | |||
Total Unrealized Losses | 0 | 0 | |||
Equity securities | Nuclear Decommissioning Trusts | |||||
Nuclear decommissioning trust fund assets | |||||
Equity securities | 407,805 | 407,805 | 420,680 | ||
Equity securities | Other Special Use Funds | |||||
Nuclear decommissioning trust fund assets | |||||
Equity securities | 46,789 | 46,789 | 40,991 | ||
Available for sale-fixed income securities | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 1,155,072 | 1,155,072 | 1,100,927 | ||
Total Unrealized Gains | 9,177 | 21,518 | |||
Total Unrealized Losses | (38,947) | (40,868) | |||
Fair value of fixed income securities, summarized by contractual maturities | |||||
Less than one year | 113,915 | 113,915 | |||
1 year – 5 years | 454,410 | 454,410 | |||
5 years – 10 years | 220,325 | 220,325 | |||
Greater than 10 years | 366,422 | 366,422 | |||
Total | 1,155,072 | 1,155,072 | |||
Available for sale-fixed income securities | Nuclear Decommissioning Trusts | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 836,344 | 836,344 | 781,333 | ||
Fair value of fixed income securities, summarized by contractual maturities | |||||
Less than one year | 15,670 | 15,670 | |||
1 year – 5 years | 258,628 | 258,628 | |||
5 years – 10 years | 195,624 | 195,624 | |||
Greater than 10 years | 366,422 | 366,422 | |||
Total | 836,344 | 836,344 | |||
Available for sale-fixed income securities | Other Special Use Funds | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 318,728 | 318,728 | 319,594 | ||
Available for sale-fixed income securities | Coal Reclamation Escrow Account | |||||
Fair value of fixed income securities, summarized by contractual maturities | |||||
Less than one year | 60,841 | 60,841 | |||
1 year – 5 years | 43,419 | 43,419 | |||
5 years – 10 years | 0 | 0 | |||
Greater than 10 years | 0 | 0 | |||
Total | 104,260 | 104,260 | |||
Available for sale-fixed income securities | Active Union Employee Medical Account | |||||
Fair value of fixed income securities, summarized by contractual maturities | |||||
Less than one year | 37,404 | 37,404 | |||
1 year – 5 years | 152,363 | 152,363 | |||
5 years – 10 years | 24,701 | 24,701 | |||
Greater than 10 years | 0 | 0 | |||
Total | 214,468 | 214,468 | |||
Other | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 3,731 | 3,731 | 1,429 | ||
Total Unrealized Gains | 399 | 39 | |||
Total Unrealized Losses | 0 | 0 | |||
Other | Nuclear Decommissioning Trusts | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | 1,444 | 1,444 | (767) | ||
Other | Other Special Use Funds | |||||
Nuclear decommissioning trust fund assets | |||||
Fair Value | $ 2,287 | $ 2,287 | $ 2,196 |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 6,310,533 | $ 6,164,451 | $ 6,284,862 | $ 6,159,876 |
OCI (loss) before reclassifications | (1,177) | (536) | (1,177) | (1,152) |
Amounts reclassified from accumulated other comprehensive loss | 465 | 481 | 1,027 | 996 |
Ending balance | 6,316,322 | 6,076,137 | 6,316,322 | 6,076,137 |
APS | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 7,369,047 | 7,218,379 | 7,349,136 | 7,052,955 |
Ending balance | 7,824,320 | 7,134,586 | 7,824,320 | 7,134,586 |
Accumulated Other Comprehensive Loss | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (32,582) | (31,536) | (33,144) | (31,435) |
Ending balance | (33,294) | (31,591) | (33,294) | (31,591) |
Accumulated Other Comprehensive Loss | APS | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (16,729) | (15,139) | (17,219) | (15,596) |
Ending balance | (17,036) | (15,547) | (17,036) | (15,547) |
Pension and Other Postretirement Benefits | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (34,192) | (31,817) | (34,754) | (32,332) |
OCI (loss) before reclassifications | (778) | (982) | (778) | (982) |
Amounts reclassified from accumulated other comprehensive loss | 465 | 481 | 1,027 | 996 |
Ending balance | (34,505) | (32,318) | (34,505) | (32,318) |
Pension and Other Postretirement Benefits | APS | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (16,729) | (15,139) | (17,219) | (15,596) |
OCI (loss) before reclassifications | (717) | (839) | (717) | (839) |
Amounts reclassified from accumulated other comprehensive loss | 410 | 431 | 900 | 888 |
Ending balance | (17,036) | (15,547) | (17,036) | (15,547) |
Derivative Instruments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | 1,610 | 281 | 1,610 | 897 |
OCI (loss) before reclassifications | (399) | 446 | (399) | (170) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 |
Ending balance | $ 1,211 | $ 727 | $ 1,211 | $ 727 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Billions | Jun. 30, 2024 USD ($) agreement lease |
Leases [Abstract] | |
Number of lease agreements, lease and sell back | lease | 3 |
Lessee, operating lease, term of contract | 20 years |
Number of energy storage lease agreements | agreement | 3 |
Lease not yet commenced | $ | $ 6.9 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Operating Leased Assets [Line Items] | ||||
Total Operating Lease Cost | $ 44,416 | $ 40,453 | $ 50,126 | $ 45,229 |
Variable Lease Cost | 47,783 | 47,994 | 69,347 | 64,724 |
Short-term Lease Cost | 6,445 | 7,403 | 9,245 | 8,804 |
Operating Lease Cost - Purchased Power & Energy Storage Lease Contracts | ||||
Operating Leased Assets [Line Items] | ||||
Total Operating Lease Cost | 39,391 | 35,655 | 40,328 | 35,655 |
Operating Lease Cost - Land, Property, and Other Equipment | ||||
Operating Leased Assets [Line Items] | ||||
Total Operating Lease Cost | 5,025 | 4,798 | 9,798 | 9,574 |
Total Lease Cost | $ 98,644 | $ 95,850 | $ 128,718 | $ 118,757 |
Leases - Maturity of Operating
Leases - Maturity of Operating Lease Liabilities (Details) $ in Thousands | Jun. 30, 2024 USD ($) |
Lessee, Lease, Description [Line Items] | |
2024 (remaining six months of 2024) | $ 122,650 |
2025 | 166,593 |
2026 | 178,003 |
2027 | 201,485 |
2028 | 202,840 |
2029 | 204,788 |
Thereafter | 1,114,036 |
Total lease commitments | 2,190,395 |
Less imputed interest | 567,994 |
Total lease liabilities | 1,622,401 |
Purchased Power & Energy Storage Lease Contracts | |
Lessee, Lease, Description [Line Items] | |
2024 (remaining six months of 2024) | 113,769 |
2025 | 152,272 |
2026 | 165,997 |
2027 | 191,917 |
2028 | 195,714 |
2029 | 199,651 |
Thereafter | 1,053,174 |
Total lease commitments | 2,072,494 |
Less imputed interest | 526,282 |
Total lease liabilities | 1,546,212 |
Land, Property & Equipment Leases | |
Lessee, Lease, Description [Line Items] | |
2024 (remaining six months of 2024) | 8,881 |
2025 | 14,321 |
2026 | 12,006 |
2027 | 9,568 |
2028 | 7,126 |
2029 | 5,137 |
Thereafter | 60,862 |
Total lease commitments | 117,901 |
Less imputed interest | 41,712 |
Total lease liabilities | $ 76,189 |
Leases - Other Additional Infor
Leases - Other Additional Information Related to Operating Lease Liabilities (Details) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2024 USD ($) agreement | Jun. 30, 2023 USD ($) | Dec. 31, 2023 | |
Leases [Abstract] | |||
Cash paid for amounts included in the measurement of lease liabilities — operating cash flows | $ | $ 18,278 | $ 13,798 | |
Right-of-use operating lease assets obtained in exchange for operating lease liabilities | $ | $ 309,141 | $ 553,665 | |
Weighted average remaining lease term | 12 years | 10 years | |
Weighted average discount rate | 4.85% | 4.53% | |
Number Of new energy storage operating lease agreements | agreement | 2 | ||
Number of purchase power operating lease agreements | agreement | 2 |
Asset Retirement Obligations -
Asset Retirement Obligations - Narrative (Details) - APS $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Cholla | |
Schedule of Asset Retirement Obligations [Line Items] | |
Asset retirement obligation, period increase | $ 63 |
Four Corners Coal-Fired Power Plant | |
Schedule of Asset Retirement Obligations [Line Items] | |
Asset retirement obligation, period increase | 82 |
Navajo Coal-Fired Power Plant | |
Schedule of Asset Retirement Obligations [Line Items] | |
Asset retirement obligation, period increase | 8 |
Palo Verde Nuclear Plant | |
Schedule of Asset Retirement Obligations [Line Items] | |
Asset retirement obligation, period increase | $ 1 |
Asset Retirement Obligations _2
Asset Retirement Obligations - Change in Asset Retirement Obligations (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Change in asset retirement obligations | |
Asset retirement obligations at the beginning of year | $ 966,001 |
Changes attributable to: | |
Accretion expense | 25,451 |
Settlements | (4,771) |
Estimated cash flow revisions | 154,042 |
Asset retirement obligations at the end of year | $ 1,140,723 |
Sale of Bright Canyon Energy (D
Sale of Bright Canyon Energy (Details) - USD ($) $ in Thousands | 5 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jan. 30, 2024 | Jan. 12, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Aug. 04, 2023 | Feb. 11, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain on sale relating to BCE | $ 22,988 | $ 0 | |||||
Discontinued Operations, Disposed of by Sale | BCE | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Assets held-for-sale | $ 35,000 | 37,000 | |||||
Consideration received | 108,000 | $ 44,000 | |||||
Gain on sale relating to BCE | 29,000 | 23,000 | $ 6,000 | ||||
Promissory notes received | 46,000 | ||||||
Credit reserve | $ 1,000 | ||||||
Discontinued Operations, Disposed of by Sale | Bright Canyou Energy Corportion | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Investment tax credits | $ 23,000 | ||||||
Payments to acquire investment tax credits | $ 21,000 | ||||||
Ameresco, Inc. | Discontinued Operations, Disposed of by Sale | BCE | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Assets held-for-sale | 79,000 | ||||||
Liabilities transferred | $ 41,000 | ||||||
Bridge Loan | Equity Bridge Loan Facility | BCE | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Debt instrument, face amount | $ 31,000 | ||||||
Term Loan | Non-Recourse Construction Term Loan Facility | BCE | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Debt instrument, face amount | $ 36,000 |
Income Taxes (Details)
Income Taxes (Details) - Discontinued Operations, Disposed of by Sale - Bright Canyou Energy Corportion $ in Millions | Jan. 30, 2024 USD ($) |
Income Tax Contingency [Line Items] | |
Investment tax credits | $ 23 |
Payments to acquire investment tax credits | $ 21 |