APS 2012 Annual Report Download - page 122

PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
97
2013 of $87.6 million. Although this proposed budget is approximately $5.6 million more than the
approved 2012 budget, the expiration of the three-year amortization of 2009 costs and prior year credits
would result in a small decrease in the DSMAC. APS expects to receive a decision from the ACC in the
second quarter of 2013.
PSA Mechanism and Balance. The PSA provides for the adjustment of retail rates to reflect
variations 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 1st (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 through the combination of the Base Fuel Rate and the Forward Component
are recovered during the next PSA Year; and (c) a “Transition Component,” under
which APS may seek mid-year PSA changes due to large variances between actual fuel
and purchased power costs and the combination of the Base Fuel Rate and the Forward
Component; and
• the PSA rate may not be increased or decreased more than $0.004 per kWh in a year
without permission of the ACC.
The following table shows the changes in the deferred fuel and purchased power regulatory
asset (liability) for 2012 and 2011 (dollars in millions):
Twelve Months Ended
December 31,
2012
2011
Beginning balance
$ 28
$ (58)
Deferred fuel and purchased power costs – current period
(72)
(69)
Amounts credited to customers
117
155
Ending balance
$ 73
$ 28
The PSA rate for the PSA year beginning February 1, 2013 is $0.0013 per kWh as compared to
($0.0042) per kWh for the prior year. This represents a $0.0055 per kWh increase over the 2012 PSA
charge. This new rate is comprised of a forward component of ($0.0010) per kWh and a historical