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Long-Term Debt and Liquidity Matters | 6 Months Ended
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Jun. 30, 2023
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 maximum of $300 million upon the satisfaction of certain conditions and with the consent of the lenders. Interest rates are based on Pinnacle West’s senior unsecured debt credit ratings 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, 2023, Pinnacle West had no outstanding borrowings under its revolving credit facility, no letters of credit outstanding under the credit facility, and $20 million of outstanding commercial paper borrowings. On December 16, 2022, Pinnacle West entered into a $175 million term loan facility that matures December 16, 2024. The proceeds were received on January 6, 2023 and used for general corporate purposes. We recognized the term loan facility as long-term debt upon settlement on January 6, 2023. 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 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. This 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, 2023, APS had no outstanding borrowings under its revolving credit facilities, no letters of credit outstanding under the credit facilities, and $285 million of outstanding commercial paper borrowings. On January 6, 2023, Pinnacle West contributed $150 million into APS in the form of an equity infusion. APS used this contribution to repay short-term indebtedness. On June 30, 2023, APS issued $500 million of 5.55% unsecured senior notes that mature August 1, 2033. The net proceeds from the sale were used to repay short-term indebtedness consisting of commercial paper and for general corporate purposes. See “Financial Assurances” in Note 8 for a discussion of other outstanding letters of credit. BCE On February 11, 2022, a special purpose subsidiary of BCE entered into a credit agreement to finance capital expenditures and related costs for a 31 megawatt (“MW”) solar and battery storage project in Los Alamitos, California (“Los Alamitos”) that is under development by the subsidiary. The credit agreement consists of an approximately $33 million equity bridge loan facility, an approximately $42 million non-recourse construction facility, and an approximately $5 million letter of credit facility. In connection with the credit agreement, Pinnacle West has issued a guarantee of up to $42 million primarily relating to the equity bridge loan. As of June 30, 2023, $31 million has been drawn from the equity bridge loan and there is a $38 million outstanding balance for the construction facility and $2.5 million letters of credit outstanding under the letter of credit facility. The equity bridge loan and construction facility mature and are due on the project’s commercial operation date, expected on or before August 15, 2023. BCE expects to convert the construction facility into a term loan upon the project’s commercial operation date. On October 19, 2022, BCE executed an interest rate swap to hedge the variable interest rate exposure of this credit facility. See Note 7. On April 18, 2023, Pinnacle West issued performance guarantees in connection with BCE’s Kūpono investment project financing. BCE holds an equity method investment relating to the Kūpono project. See Note 8. 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, 2023 |  | As of December 31, 2022
| Carrying Amount |  | Fair Value |  | Carrying Amount |  | Fair Value
Pinnacle West | $ | 1,123,311 |  |  | $ | 1,081,620 |  |  | $ | 947,892 |  |  | $ | 905,525 |
APS | 7,291,004 |  |  | 6,267,348 |  |  | 6,793,529 |  |  | 5,629,491 |
BCE | 68,907 |  |  | 68,907 |  |  | 50,550 |  |  | 50,685 |
Total | $ | 8,483,222 |  |  | $ | 7,417,875 |  |  | $ | 7,791,971 |  |  | $ | 6,585,701 |

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