APS 2012 Annual Report Download - page 118

PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
93
million in 2017. At December 31, 2012, the weighted-average remaining amortization period for
intangible assets was 6 years.
Investments
El Dorado accounts for its investments using either the equity method (if significant influence)
or the cost method (if less than 20% ownership).
Our investments in the nuclear decommissioning trust fund are accounted for in accordance with
guidance on accounting for certain investments in debt and equity securities. See Note 14 and Note 22
for more information on these investments.
2. New Accounting Standards
During 2012, we adopted amended guidance intended to converge fair value measurement and
disclosure requirements for GAAP and international financial reporting standards (“IFRS”). The
amended guidance clarifies how certain fair value measurement principles should be applied and
requires enhanced fair value disclosures. The adoption of this new guidance resulted in additional fair
value disclosures (see Note 14), but did not impact our financial statement results. !
!
During 2012, we also adopted amended guidance on the presentation of comprehensive income.
As a result of the amended guidance, we have changed our format for presenting comprehensive
income. Previously, components of comprehensive income were presented within changes in equity.
Due to the amended guidance, we now present comprehensive income in a new financial statement
titled “Consolidated Statements of Comprehensive Income”. The adoption of this guidance changed our
format for presenting comprehensive income, but did not impact our financial statement results.
3. Regulatory Matters
Retail Rate Case Filing with the Arizona Corporation Commission
On June 1, 2011, APS filed an application with the ACC for a net retail base rate increase of
$95.5 million. APS requested that the increase become effective July 1, 2012. The request would have
increased the average retail customer bill approximately 6.6%. On January 6, 2012, APS and other
parties to the general retail rate case entered into an agreement (the “Settlement Agreement”) detailing
the terms upon which the parties agreed to settle the rate case. On May 15, 2012, the ACC approved the
Settlement Agreement without material modifications.
Settlement Agreement
The Settlement Agreement provides for a zero net change in base rates, consisting of: (1) a non-
fuel base rate increase of $116.3 million; (2) a fuel-related base rate decrease of $153.1 million (to be
implemented by a change in the Base Fuel Rate for fuel and purchased power costs from $0.03757 to
$0.03207 per kWh; and (3) the transfer of cost recovery for certain renewable energy projects from the
RES surcharge to base rates in an estimated amount of $36.8 million.
APS also agreed not to file its next general rate case before May 31, 2015, and not to request
that its next general retail rate increase be effective prior to July 1, 2016. The Settlement Agreement