APS 2012 Annual Report Download - page 82
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58
Increase (Decrease)
Operating
revenues
Fuel and
purchased
power
expenses
Net change
(dollars in millions)
Impacts of retail regulatory settlement
effective July 1, 2012
$ 64
$ 1
$ 63
Higher retail transmission revenues
41
--
41
Lower fuel and purchased power costs,
net of related deferrals and
off-system sales
(11)
(14)
3
Lower demand-side management,
renewable energy and similar
regulatory surcharges
(3)
4
(7)
Settlement in 2011 of certain prior-period
transmission right-of-way revenues
(28)
--
(28)
Miscellaneous items, net
(7)
(6)
(1)
Total
$ 56
$ (15)
$ 71
Operations and maintenance Operations and maintenance expenses decreased $19 million for
the year ended December 31, 2012 compared with the prior year primarily because of:
• A decrease of $28 million related to settlement in 2011 of certain transmission right-of-
way costs, which was offset in operating revenues;
• A decrease of $22 million related to costs for demand-side management, renewable
energy and similar regulatory programs;
• A decrease of $15 million in generation costs, primarily related to lower nuclear
generation costs;
• An increase of $21 million related to employee benefit costs, including approximately
$12 million of pension and other postretirement costs;
• An increase of $9 million related to higher stock compensation costs resulting from an
improved company stock price and estimated performance results;
• An increase of $7 million in information technology costs, primarily related to higher
software maintenance; and
• An increase of $9 million due to other miscellaneous factors.
Depreciation and amortization Depreciation and amortization expenses were $23 million
lower for the year ended December 31, 2012 compared with the prior year primarily due to the impacts
of Palo Verde operating license extensions, partially offset by increased plant in service.