APS 2015 Annual Report Download - page 65

Table of Contents
Capital Expenditures. The following table summarizes the estimated capital expenditures for the next three years:
Capital Expenditures
(dollars in millions)
Estimated for the Year Ended
December 31,
2016
2017
2018
APS
Generation:
Nuclear Fuel $ 81
$ 78
$ 81
Renewables 110
1
1
Environmental 235
199
130
New Gas Generation 77
237
112
Other Generation 134
133
222
Distribution 357
345
376
Transmission 123
210
120
Other (a) 88
82
82
Total APS $ 1,205
$ 1,285
$ 1,124
(a) Primarily information systems and facilities projects.
Generation capital expenditures are comprised of various improvements to APS’s existing fossil and nuclear plants. Examples
of the types of projects included in this category are additions, upgrades and capital replacements of various power plant equipment,
such as turbines, boilers and environmental equipment. The estimated renewables capital expenditures include a planned utility-scale
solar facility, which is subject to regulatory approval. We have not included estimated costs for Cholla’s compliance with MATS or
EPA’s regional haze rule since we have challenged the regional haze rule judicially and we have proposed a compromise strategy to
EPA, which, if approved, would allow us to avoid expenditures related to environmental control equipment. The portion of estimated
costs for 2016 through 2018 for installation of pollution control equipment needed to ensure Four Corners’ compliance with EPA’s
regional haze rules have been included in the table above. Costs related to the Navajo Plant's compliance with the regional haze rules
are not included in the table above, as they are expected to be incurred post-2018. The portion of estimated costs for 2016 through
2018 for incremental costs to comply with the CCR rule for Four Corners and Cholla have also been included in the table above.
On February 17, 2015, APS and El Paso entered into an asset purchase agreement providing for the purchase by APS, or an
affiliate of APS, of El Paso’s 7% interest in each of Units 4 and 5 of Four Corners. On December 29, 2015, NTEC notified APS of its
intent to exercise its option to purchase the 7% interest. The table above does not include capital expenditures related to El Paso's 7%
interest in Four Corners Units 4 and 5 of $27 million in 2016 and $20 million in 2017. We are monitoring the status of other
environmental matters, which, depending on their final outcome, could require modification to our planned environmental
expenditures.
Distribution and transmission capital expenditures are comprised of infrastructure additions and upgrades, capital replacements,
and new customer construction. Examples of the types of projects included in the forecast include power lines, substations, and line
extensions to new residential and commercial developments.
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