APS 2013 Annual Report Download - page 78

Table of Contents
The table below shows the impact that hypothetical price movements of 10% would have on the market value of our risk management assets and
liabilities included on Pinnacle West’s Consolidated Balance Sheets at December 31, 2013 and 2012 (dollars in millions):
December 31, 2013
Gain (Loss)
December 31, 2012
Gain (Loss)
Price Up 10% Price Down 10% Price Up 10% Price Down 10%
Mark-to-market changes reported in:
Earnings (a)
Natural gas $ — $ — $ — $ —
Regulatory asset (liability) or OCI (b)
Electricity 6 (6) 7 (7)
Natural gas 26 (26) 25 (25)
Total $32 $(32)$32 $(32)
(a) Represents the amounts reflected in income after the effect of PSA deferrals.
(b) These contracts are economic hedges of our forecasted purchases of natural gas and electricity. The impact of these hypothetical price
movements would substantially offset the impact that these same price movements would have on the physical exposures being hedged. To
the extent the amounts are eligible for inclusion in the PSA, the amounts are recorded as either a regulatory asset or liability.
Credit Risk
We are exposed to losses in the event of non-performance or non-payment by counterparties. See Note 17 for a discussion of our credit valuation
adjustment policy.
ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
See “Market and Credit Risks” in Item 7 above for a discussion of quantitative and qualitative disclosures about market risk.
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