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Regulatory Matters (Tables) | 12 Months Ended
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Dec. 31, 2021
Regulated Operations [Abstract] |
Schedule of capital structure and cost of capital | the following proposed capital structure and costs of capital:
|  | Capital Structure |  | Cost of Capital |
Long-term debt |  | 45.3 |  | % | 4.10 |  | %
Common stock equity |  | 54.7 |  | % | 10.15 |  | %
Weighted-average cost of capital |  |  |  | 7.41 |  | %
Schedule of changes in the deferred fuel and purchased power regulatory asset | The following table shows the changes in the deferred fuel and purchased power regulatory asset for 2021 and 2020 (dollars in thousands):
| Twelve Months Ended December 31,
| 2021 |  | 2020
Beginning balance | $ | 175,835 |  |  | $ | 70,137 |
Deferred fuel and purchased power costs — current period | 256,871 |  |  | 93,651 |
Amounts refunded/(charged) to customers | (44,558) |  |  | 12,047 |
Ending balance | $ | 388,148 |  |  | $ | 175,835 |
Schedule of regulatory assets | The detail of regulatory assets is as follows (dollars in thousands):
S |  |  | December 31, 2021 |  | December 31, 2020
| Amortization Through |  | Current |  | Non-Current |  | Current |  | Non-Current
Pension | (a) |  | $ | — |  |  | $ | 509,751 |  |  | $ | — |  |  | $ | 469,953 |
Deferred fuel and purchased power (b) (c) | 2022 |  | 388,148 |  |  | — |  |  | 175,835 |  |  | — |
Income taxes — AFUDC equity | 2051 |  | 7,625 |  |  | 164,768 |  |  | 7,169 |  |  | 158,776 |
Ocotillo deferral (e) | 2031 |  | 9,507 |  |  | 138,143 |  |  | — |  |  | 95,723 |
Retired power plant costs | 2033 |  | 15,160 |  |  | 99,681 |  |  | 28,181 |  |  | 114,214 |
SCR deferral (e) (f) | 2031 |  | 8,147 |  |  | 97,624 |  |  | — |  |  | 81,307 |
Lost fixed cost recovery (b) | 2022 |  | 63,889 |  |  | — |  |  | 41,807 |  |  | — |
Deferred property taxes | 2027 |  | 8,569 |  |  | 41,057 |  |  | 8,569 |  |  | 49,626 |
Deferred compensation | 2036 |  | — |  |  | 33,997 |  |  | — |  |  | 36,195 |
Income taxes — investment tax credit basis adjustment | 2056 |  | 1,129 |  |  | 23,639 |  |  | 1,113 |  |  | 24,291 |
Four Corners cost deferral | 2024 |  | 8,077 |  |  | 15,998 |  |  | 8,077 |  |  | 24,075 |
Palo Verde VIEs (Note 18) | 2046 |  | — |  |  | 21,094 |  |  | — |  |  | 21,255 |
Coal reclamation | 2026 |  | 2,978 |  |  | 13,862 |  |  | 1,068 |  |  | 16,999 |
Loss on reacquired debt | 2038 |  | 1,648 |  |  | 9,372 |  |  | 1,689 |  |  | 10,877 |
Mead-Phoenix transmission line — contributions in aid of construction | 2050 |  | 332 |  |  | 9,048 |  |  | 332 |  |  | 9,380 |
Tax expense adjustor mechanism (b) | 2031 |  | 656 |  |  | 5,845 |  |  | 6,226 |  |  | — |
TCA balancing account (b) | 2023 |  | 170 |  |  | 3,663 |  |  | — |  |  | — |
Tax expense of Medicare subsidy | 2024 |  | 1,235 |  |  | 2,469 |  |  | 1,235 |  |  | 3,704 |
Demand side management (b) | 2022 |  | 919 |  |  | — |  |  | — |  |  | 7,268 |
PSA interest | 2022 |  | 335 |  |  | — |  |  | 4,355 |  |  | — |
Deferred fuel and purchased power — mark-to-market (Note 16) | 2024 |  | — |  |  | — |  |  | 3,341 |  |  | 9,244 |
Other | Various |  | — |  |  | 2,976 |  |  | 2,716 |  |  | 1,100 |
Total regulatory assets (d) |  |  | $ | 518,524 |  |  | $ | 1,192,987 |  |  | $ | 291,713 |  |  | $ | 1,133,987 |
(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. See Note 8 for further discussion. (b)See “Cost Recovery Mechanisms” discussion above. (c)Subject to a carrying charge. (d)There are no regulatory assets for which the ACC has allowed recovery of costs, but not allowed a return by exclusion from rate base. FERC rates are set using a formula rate as described in “Transmission Rates, Transmission Cost Adjustor and Other Transmission Matters.” (e)Balance includes amounts for future regulatory consideration and amortization period determination. (f)See “Four Corners SCR Cost Recovery” discussion above.
Schedule of regulatory liabilities | The detail of regulatory liabilities is as follows (dollars in thousands):
|  |  | December 31, 2021 |  | December 31, 2020
| Amortization Through |  | Current |  | Non-Current |  | Current |  | Non-Current
Excess deferred income taxes - ACC — Tax Cuts and Jobs Act (a) | 2046 |  | $ | 40,903 |  |  | $ | 971,545 |  |  | $ | 41,330 |  |  | $ | 1,012,583 |
Excess deferred income taxes - FERC — Tax Cuts and Jobs Act (a) | 2058 |  | 7,239 |  |  | 221,877 |  |  | 7,240 |  |  | 229,147 |
Asset retirement obligations | 2057 |  | — |  |  | 614,683 |  |  | — |  |  | 506,049 |
Other postretirement benefits | (d) |  | 37,789 |  |  | 337,027 |  |  | 37,705 |  |  | 349,588 |
Removal costs | (c) |  | 69,476 |  |  | 50,104 |  |  | 52,844 |  |  | 103,008 |
Deferred fuel and purchased power — mark-to-market (Note 17) | 2024 |  | 60,693 |  |  | 46,908 |  |  | — |  |  | — |
Income taxes — change in rates | 2051 |  | 2,876 |  |  | 64,802 |  |  | 2,839 |  |  | 66,553 |
Four Corners coal reclamation | 2038 |  | 2,316 |  |  | 53,076 |  |  | 5,460 |  |  | 49,435 |
Spent nuclear fuel | 2027 |  | 6,701 |  |  | 38,581 |  |  | 6,768 |  |  | 44,221 |
Income taxes — deferred investment tax credit | 2056 |  | 2,264 |  |  | 47,337 |  |  | 2,231 |  |  | 48,648 |
Renewable energy standard (b) | 2022 |  | 38,453 |  |  | 187 |  |  | 39,442 |  |  | 103 |
FERC transmission true up (b) | 2023 |  | 21,379 |  |  | 12,924 |  |  | 6,598 |  |  | 3,008 |
Property tax deferral (e) | 2024 |  | 4,671 |  |  | 15,521 |  |  | — |  |  | 13,856 |
Sundance maintenance | 2031 |  | — |  |  | 13,797 |  |  | 2,989 |  |  | 11,508 |
Demand side management (b) | 2022 |  | — |  |  | 5,417 |  |  | 10,819 |  |  | — |
Tax expense adjustor mechanism (b) (e) | N/A |  | — |  |  | 4,835 |  |  | 7,089 |  |  | — |
Deferred gains on utility property | 2022 |  | 1,301 |  |  | 551 |  |  | 2,423 |  |  | 1,544 |
TCA balancing account (b) | 2022 |  | — |  |  | — |  |  | 2,902 |  |  | 4,672 |
Active union medical trust | N/A |  | — |  |  | — |  |  | — |  |  | 6,057 |
Other | Various |  | 210 |  |  | 41 |  |  | 409 |  |  | 189 |
Total regulatory liabilities |  |  | $ | 296,271 |  |  | $ | 2,499,213 |  |  | $ | 229,088 |  |  | $ | 2,450,169 |
(a)For purposes of presentation on the Statement of Cash Flows, amortization of the regulatory liabilities for excess deferred income taxes are reflected as “Deferred income taxes” under Cash Flows From Operating Activities. (b)See “Cost Recovery Mechanisms” discussion above. (c)In accordance with regulatory accounting, APS accrues removal costs for its regulated assets, even if there is no legal obligation for removal. (d)See Note 8. (e)Balance includes amounts for future regulatory consideration and amortization period determination.

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