Table of Contents EL PASO ELECTRIC COMPANY NOTES TO FINANCIAL STATEMENTS An analysis of the activity of the Company’s total ARO liability from January 1, 2018 through December 31, 2019, including the effects of each year’s estimate revisions, is presented below (in thousands). The Company has transmission and distribution lines which are operated under various land rights agreements. Upon the expiration of any non-perpetual land rights agreement, the Company may have a legal obligation to remove the lines; however, the Company has assessed the likelihood of this occurring as remote. The majority of these agreements are perpetual or include renewal options that the Company routinely exercises. The amount of cost of removal collected in rates for non-legal liabilities has not been material. 2019 2018 ARO liability at beginning of year $ 101,108 $ 93,029 Liabilities settled (118) (272) Accretion expense 9,115 8,351 ARO liability at end of year $ 110,105 $ 101,108 78