APS 2012 Annual Report Download - page 149
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PINNACLE WEST CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
124
The following table summarizes our estimated coal take-or-pay commitments (dollars in
millions):
Years Ended December 31,
2013 2014 2015 2016 2017 Thereafter
Coal take-or-pay
commitments (a)
$ 90
$ 93
$ 96
$ 63
$ 27
$121
(a) Total take-or-pay commitments are approximately $490 million. The total net present
value of these commitments is approximately $375 million.
APS spends more to meet its actual fuel requirements than the minimum purchase obligations in
our coal take-or-pay contracts. The following table summarizes the actual amounts purchased under the
coal contracts which include take-or-pay provisions for each of the last three years (dollars in millions):
Year Ended December 31,
2012
2011
2010
Total purchases
$ 196
$ 191
$ 156
Renewable Energy Credits
APS has entered into contracts to purchase renewable energy credits to comply with the RES.
APS estimates the contract requirements to be approximately $51 million in 2013; $40 million in 2014;
$41 million in 2015; $40 million in 2016; $40 million in 2017; and $491 million thereafter. These
amounts do not include purchases of renewable energy credits that are bundled with energy. Also, these
amounts do not include purchases of renewable energy credits that are associated with purchased power
contracts.
Coal Mine Reclamation Obligations
APS must reimburse certain coal providers for amounts incurred for final and contemporaneous
coal mine reclamation. We account for contemporaneous reclamation costs as part of the cost of the
delivered coal. We utilize site-specific studies of costs expected to be incurred in the future to estimate
our final reclamation obligation. These studies utilize various assumptions to estimate the future costs.
Based on the most recent reclamation studies, APS has recorded a final coal mine reclamation
obligation of approximately $119 million at December 31, 2012 and $118 million at December 31,
2011. Under our current coal supply agreements, we expect to make payments to certain coal providers
for the final mine reclamation as follows: $1 million in 2013; $25 million in 2014; $49 million in 2015;
$25 million in 2016; $2 million in 2017; and $17 million thereafter. Any amendments to current coal
supply agreements may change the timing of the reimbursement.