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Powering Growth, Delivering Value
Investor Meetings l April 10 & 11, 2018
POWERING GROWTH
DELIVERING VALUE
Powering Growth, Delivering Value2
FORWARD LOOKING STATEMENTS
This presentation contains forward-looking statements based on current expectations, including statements regarding our earnings
guidance and financial outlook and goals. These forward-looking statements are often identified by words such as “estimate,”
“predict,” “may,” “believe,” “plan,” “expect,” “require,” “intend,” “assume,” “project” and similar words. Because actual results may
differ materially from expectations, we caution you not to place undue reliance on these statements. A number of factors could cause
future results to differ materially from historical results, or from outcomes currently expected or sought by Pinnacle West or APS.
These factors include, but are not limited to: our ability to manage capital expenditures and operations and maintenance costs while
maintaining high reliability and customer service levels; variations in demand for electricity, including those due to weather
seasonality, the general economy, customer and sales growth (or decline), and the effects of energy conservation measures and
distributed generation; power plant and transmission system performance and outages; competition in retail and wholesale power
markets; regulatory and judicial decisions, developments and proceedings; new legislation, ballet initiatives and regulation, including
those relating to environmental requirements, regulatory policy, nuclear plant operations and potential deregulation of retail electric
markets; fuel and water supply availability; our ability to achieve timely and adequate rate recovery of our costs, including returns on
and of debt and equity capital investments; our ability to meet renewable energy and energy efficiency mandates and recover related
costs; risks inherent in the operation of nuclear facilities, including spent fuel disposal uncertainty; current and future economic
conditions in Arizona, including in real estate markets; the development of new technologies which may affect electric sales or
delivery; the cost of debt and equity capital and the ability to access capital markets when required; environmental, economic and
other concerns surrounding coal-fired generation, including regulation of greenhouse gas emissions; volatile fuel and purchased
power costs; the investment performance of the assets of our nuclear decommissioning trust, pension, and other postretirement
benefit plans and the resulting impact on future funding requirements; the liquidity of wholesale power markets and the use of
derivative contracts in our business; potential shortfalls in insurance coverage; new accounting requirements or new interpretations
of existing requirements; generation, transmission and distribution facility and system conditions and operating costs; the ability to
meet the anticipated future need for additional generation and associated transmission facilities in our region; the willingness or
ability of our counterparties, power plant participants and power plant land owners to meet contractual or other obligations or extend
the rights for continued power plant operations; and restrictions on dividends or other provisions in our credit agreements and ACC
orders. These and other factors are discussed in Risk Factors described in Part I, Item 1A of the Pinnacle West/APS Annual Report on
Form 10-K for the fiscal year ended December 31, 2017, which you should review carefully before placing any reliance on our
financial statements, disclosures or earnings outlook. Neither Pinnacle West nor APS assumes any obligation to update these
statements, even if our internal estimates change, except as required by law.
Powering Growth, Delivering Value3
VALUE PROPOSITION
We are executing on our financial and operational objectives …
Operational Excellence
Top decile safety performance
among peers
APS operates the Palo Verde
Generating Station
Disciplined cost management
Financial Strength
Annual dividend growth target of
6%, subject to declaration at
Board of Directors’ discretion
Strong credit ratings and balance
sheet
Rate base growth of 6-7%
Leverage
Economic Growth
Arizona’s long-term growth
fundamentals remain largely
intact, including population
growth, job growth and economic
development
By 2032 we expect to add
approximately 550,000 new
customers1
… while also advocating to ensure Pinnacle West and
Arizona have a sustainable energy future
Integrating Technology to
Modernize the Grid
At the forefront of utilities
studying and deploying advanced
infrastructure to enable reliable
and cost-efficient integration of
emerging technologies into the
grid and with customers
Taking Steps to Address
Rate Design
Worked with Arizona Corporation
Commission and key stakeholders
to modernize rates
Comprehensive rate review
agreement approved in August
2017, enabling investment in
smarter, cleaner energy
infrastructure
Pinnacle West combines
a solid foundation and a
clear strategy to build
shareholder value through
our core utility business
1 Based on the 2017 Integrated Resource Plan filed April 10, 2017.
Powering Growth, Delivering Value4
SUSTAINABILITY
APS’s vision is to create a
sustainable energy future for
Arizona
Pinnacle West and APS have
adopted a strategic framework that
supports our operating foundation
Five critical areas of our sustainability efforts
• 50% of our diverse energy mix is carbon-free
• Plan to reduce carbon intensity by 23% over the next 15 yrs
• More than 1,300 MW of installed solar capacity
• Plan to add over 500 MW of energy storage by 2032
• 70% reduction in OSHA recordable injuries over past 10 yrs
• Remain top decile for safety performance in the U.S. electric
utilities industry
• 14% reduction in groundwater use since 2014
• 20B gallons of water recycled each year to cool Palo Verde
• Avg. employee tenure of 13 yrs due to strong talent strategy
• More than 20% of our employees are veterans
Carbon Management
Energy Innovation
Safety & Security
Water Resources
People
Powering Growth, Delivering Value5
THE GRID IS EVOLVING – DRIVING NEW
INVESTMENTS IN TECHNOLOGY
Drivers for
Change
– Traditional grid built for
one-way flow
– Technology advancements
(storage, home energy
management)
– Changing customer needs and
demands
– Proliferation of distributed
solar energy, which does not
align with peak
The Modern
Grid
– New technologies to enable
two-way flow
– Proactive vs. reactive
operations and maintenance
– Modern rate structure
– New ways to interact with
customer
– Mobility for our field personnel
– Smarter, more flexible real-
time system operations
– Support consumer products
and services
– Addresses cybersecurity
APS Laying
Foundation for
the Future
– Solar R&D initiatives
• Solar Partner Program
• Solar Innovation Study
– Smart meters fully deployed
– Investing in peaking capacity upgrades
(Ocotillo)
– Evaluating storage/customer-cited
technology
• Battery investments
• Microgrids
– Software upgrades for distribution
operations and customer service
– Ensuring our people have the relevant
skill sets
Grid stability, power quality and reliability remain the core of a sustainable electrical system.
APS is at the forefront of utilities designing and planning for the next generation electric grid.
New technology advances and changing customer needs are transforming the way we use the grid.
Powering Growth, Delivering Value6
GRID INVESTMENTS
Modernizing the distribution grid
with advanced technology
investments – resulting in
improved reliability for customers
and more efficient operations
Integrated Volt/VAR Control (IVVC)
Smart Meters
Advanced Distribution Management System
Strategic Fiber
Supervisory Controlled Switches
Substation Health Monitoring
Controls regulators and
capacity banks to manage
power quality such as power
factor and voltage.
New technologies such as
APS’s Transformer Oil
Analysis & Notification
(TOAN) system leverage
advances in
communications and
sensing to remotely monitor
heath of transformers,
enabling proactive
maintenance actions to
prevent critical failures.
Automated switches that
can be controlled from
Distribution Operations
Center (DOC). Allows
operations to manage
load without sending
field personnel to
manually operate the
switch.
Integrated operational
platform. Increases
efficiency and life of
distribution system;
improves safety and
communication; increases
ability to manage overall
reliability; and enables
Distributed Energy
Resources (DER).
Grid Operations & Investment
$1.6 Billion from 2018-2020
Powering Growth, Delivering Value7
STORAGE PROJECTS
Energy storage is an important
part of our Integrated Resource
Plan
Punkin Center Battery Storage Project
• 2 MW / 8 MWH lithium ion battery
• Anticipated in service April 2018
• Defers the rebuild of around 20 miles of 21 kV
distribution line for approximately 5-10 years
• Acts as generating capacity to the system
• Helps regulate the voltage on the feeder
APS, First Solar Battery Storage Project
• 50 MW battery energy storage; 65 MW solar
• 15-year power purchase agreement
• Anticipated in service in 2021
• APS will be able to store power and deliver energy
during peak hours (3-8pm)
Powering Growth, Delivering Value8
RENEWABLE
RESOURCES
APS is a leader in solar
Aragonne Mesa
Wind
90 MW
Snowflake
Biomass
14 MW
Glendale Landfill
Biogas
3 MW
Salton Sea
Geothermal
10 MW
• Solar* 1,264 MW
• Wind 289 MW
• Biomass 14 MW
• Geothermal 10 MW
• Biogas 6 MW Owned solar includes 170 MW AZ Sun Program, 4 MW of other APS
owned utility scale solar and 40 MW Red Rock Solar Plant;
Distributed Generation (DG) includes 25 MW of APS owned;
PPA is primarily 250 MW Solana Concentrated Solar Facility.
PPA
310 MW
DG
740 MW
Owned
214 MW
APS Solar Portfolio*
Yuma Foothills
Solar
35 MW
* As of 12/31/17 as reported in the 2017 Form 10-K – with additional 72 MW under development
APS currently has 1,583 MW
of renewable resources:
Powering Growth, Delivering Value9
School Bus Electrification
– Pilot program to electrify school buses that can charge in the middle of the day
Managed EV Charging Program
– Fleet, workplace and multifamily charging infrastructure
– Utility controlled providing additional demand response
Reverse Demand Response Pilot
– Customers take advantage of negative pricing events
Energy Storage Initiative Expansion
– Focus on C&I energy storage and control
DEMAND SIDE
MANAGEMENT (DSM)
2018 DSM Plan shifts the focus to
align with APS’s changing
resource needs
2018 DSM Plan introduces new high value pilot programs to utilize the mid-day
overproduction of energy
Powering Growth, Delivering Value10
Other Eligible
Participants
Secondary
Customer
Target
Primary
Customer
Target
Limited-Income Residential Customers
and Multi-Family Dwellings
Moderate-Income Residential Customers
Commercial Customers Serving Limited
& Moderate-Income Customers
Title 1
Schools Non-Profits
Rural
Government
APS Solar Partner Program (Installations Complete)
– Installed 10 MW of APS-owned residential PV systems with advanced controllable
inverters that can vary power output
– 4 MWh of grid-tied battery storage on 2 of the participating feeders
APS Solar Communities (Construction to begin Q2 2018)
– Deploy utility owned photovoltaic
solar generation connected
directly to the distribution system
– All solar assets will use advanced
inverters
– Program spend of $10-$15 million in
direct capital costs each year for the
three-year program period
– Program costs recovered annually through
the Renewable Energy Surcharge
APS SOLAR Providing more renewable energy and technology to all customers
Powering Growth, Delivering Value11
Peak** 8,405 MW 9,835 MW 11,410 MW
Resource Reductions
(Retirements, Expirations)
2017-2022
-487 MW
Ocotillo steam unit retirements and
Navajo contract expiration
-509 MW
PPA expirations
2017-2027
-872 MW
Ocotillo steam unit retirements,
Navajo contract expiration and
Cholla coal retirement
-1,120 MW
PPA expirations
2017-2032
-872 MW
Ocotillo steam unit retirements,
Navajo contract expiration and
Cholla coal retirement
-1,133 MW
PPA expirations
Resource Additions 2017-2022
2,704 MW
Natural gas generating units, short-term
market purchases, DSM, microgrids,
rooftop solar and storage
2017-2027
5,206 MW
Natural gas generating units, short-term
market purchases, DSM, microgrids,
rooftop solar and storage
2017-2032
6,923 MW
Natural gas generating units, short-term
market purchases, DSM, microgrids,
rooftop solar, storage and wind
Peak Load Growth 2022
3.4%
2017-2022
20%
2027
3.1%
2017-2027
40%
2032
3.0%
2017-2032
62%
RESOURCE PLANNING*
**Normal weather peak, includes planning reserves
2022
Nuclear Coal Natural Gas DSM Utility-Scale Renewable Energy Rooftop Solar
Short-Term Market
Purchases Storage
* Data shown is based on the 2017 Integrated Resource Plan filed
April 10, 2017.
2027 2032Reference Year 2017**
Peak**
7,023 MW
Powering Growth, Delivering Value12
INTEGRATED
RESOURCE PLAN
The ACC can acknowledge the
filing of an IRP, but they do not
approve IRP’s
15-Year Plan
• An Integrated
Resource Plan
(IRP) provides
a 15-year
forward look
at a utility’s
resource
needs and its
plan to meet
those needs in
a reliable and
affordable
fashion
IRP Cycle Acknowledgement Decision Impact
• Occurs every 2-3 years
• Utility-and Commission-
led stakeholder
workshops during
development of the IRP
• Preliminary IRP filed
about 1 year prior to
the Final IRP
• Year after Final IRP
filing, Commission Staff
issues a Recommended
Order regarding IRP
Acknowledgement
• Commission votes on
IRP Acknowledgement
• ACC does not
approve or reject
IRPs; it
acknowledges or
declines to
acknowledge the
filing
• Acknowledgement
of an IRP does not
guaranty recovery
of investments nor
does non-
acknowledgement
imply non-recovery
of investments
• A non-
acknowledged
IRP does not
require a revised
filing and there is
no requirement
that a utility
modify its
resource plan
Looking Ahead
• The next IRP
filing is
scheduled for
April 2020
• Stakeholder
process for the
2020 IRP cycle
starts as early
as August 2018
Powering Growth, Delivering Value
APPENDIX
Powering Growth, Delivering Value14
Jim Hatfield
Executive Vice President and
Chief Financial Officer, Pinnacle West & APS
• Joined as SVP and CFO in
2008 from OGE Energy
Corp.
• Responsible for corporate
functions including finance,
investor relations, and risk
management
• 37+ years of financial
experience in the utility and
energy business
SENIOR
MANAGEMENT
TEAM
Our management team has more
than 100 combined years of
creating shareholder value in the
energy industry
Mark Schiavoni
Executive Vice President and
Chief Operating Officer, APS
• Joined APS in 2009 from
Exelon Corp.
• Appointed COO in 2014
• Oversees operations for non-
nuclear activities
• Significant leadership
experience in the energy
industry
• Retiring from APS effective
August 20, 2018
Bob Bement
Executive Vice President and
Chief Nuclear Officer, APS
• Joined APS in 2007 from
Arkansas Nuclear One
• Promoted from SVP of Site
Operations to EVP and Chief
Nuclear Officer in 2016
• Responsible for all nuclear-
related activities associated
with Palo Verde
• Seasoned nuclear industry
expert serving on several
industry committees
Jeff Guldner
Executive Vice President, Public Policy &
General Counsel, Pinnacle West & APS
• Joined APS in 2004 from
Snell & Wilmer
• Appointed EVP and GC, April
2017
• Responsible for overseeing
regulatory and government
affairs and legal activities
• Significant experience in
public utility and energy law
and regulation
Don Brandt
Chairman of the Board, President and
Chief Executive Officer, Pinnacle West & APS
• Joined Pinnacle West in 2002
• Elected to Pinnacle West
Board and named Chairman,
CEO in 2009
• Recognized industry leader
with 30+ years in the nuclear
and energy industries
• Vice Chairman of the
Institute of Nuclear Power
Operations and Chairman of
the Nuclear Energy Institute
We maintain a robust
pipeline of talent to serve
our complex operations
and facilitate effective
succession planning in a
highly competitive talent
environment
Bob Bement succeeded
Randy Edington as Chief Nuclear
Officer in October 2016
Powering Growth, Delivering Value15
$218 $282 $241 $198
$235 $120
$9
$193
$91
$22
$46
$3
$16
$24 $17
$174
$148
$215
$180
$419
$444
$541 $617
$99
$80
$101 $153
2017 2018 2019 2020
APS CAPITAL
EXPENDITURES
Capital expenditures are funded
primarily through internally
generated cash flow
($ Millions)
$1,341
$1,181
Other
Distribution
Transmission
Renewable
Generation
Environmental(1)
Traditional
Generation
Projected
$1,153
New Gas
Generation(2)
• The chart does not include capital expenditures related to 4CA’s 7% interest in the Four Corners Power Plant Units 4 and 5 of
$29 million in 2017, $15 million in 2018, $7 million in 2019 and $6 million in 2020.
• 2018 – 2020 as disclosed in 2017 Form 10-K.
(1) Includes Selective Catalytic Reduction controls at Four Corners with in-service dates of Q4 2017 (Unit 5) and Q1 2018 (Unit 4)
(2) Ocotillo Modernization Project: 2 units scheduled for completion in Q4 2018, 3 units scheduled for completion in Q1 2019
$1,211
Powering Growth, Delivering Value16
OPERATIONS &
MAINTENANCE
Goal is to keep O&M per kWh flat,
adjusted for planned outages
751 753 734 756 770
785 - 795
37 52 38
72 63
75 - 85$788 $805 $772
$828 $833
$860 - $880
2013 2014 2015 2016 2017 2018E*
PNW Consolidated ex RES/DSM** Planned Fleet Outages
* 2018 excludes impacts related to the adoption of the new accounting standard regarding the presentation of pension and postretirement
benefit costs. See Notes 2 and 7 in the 2017 Form 10-K for additional information.
** Excludes RES/DSM of $137 million in 2013, $103 million in 2014, $96 million in 2015, $83 million in 2016, $91 million in 2017 and
$85 million in 2018E.
($ Millions)
Powering Growth, Delivering Value17
TAX REFORM
Tax Cuts and Jobs Act provides
benefits to both our customers
and shareholders
Regulatory Steps
− Received ACC approval of $119M annual rate
reduction reflecting lower corporate tax rate
through the Tax Expense Adjustor Mechanism
(TEAM)
− Second filing under the TEAM expected later in
2018 to return excess deferred income taxes to
customers
− FERC guidance on the rate reduction for
transmission customers expected in 2018
Key Impacts
Recap of Excess Deferred Taxes
($ millions)
As of
December 31,
2017
Total Regulated Excess Deferred Taxes $1,140
Depreciation Related Excess Deferred
Taxes (to be returned over the life of
property)
$1,020 - $1,040
Non-Depreciation Related Excess Deferred
Taxes $100 - $120
2017 Tax Reform Impacts
($ millions)
Income
Tax
Expense
Regulatory
Liability
Revaluation of Regulated Deferred
Taxes (includes gross up) $1,520
Revaluation of Non-Regulated
Deferred Taxes $9
Total PNW Impacts $9 $1,520
Rate Base Growth
− Higher incremental rate base of $150 million per
year in 2018 and 2019
Continued Interest Deductibility
− Majority of Pinnacle West debt likely allocable to
regulated operations and excluded from any
limitation
Cash Taxes
− Minimal cash tax payments through 2018
due to existing $85M in tax credit carryforwards
Powering Growth, Delivering Value18
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
U.S. Phoenix
ECONOMIC
INDICATORS
Arizona and Metro Phoenix
remain attractive places to
live and do business
E
Year over Year Employment Growth1
Above-average job growth in tourism,
health care, manufacturing, financial
services, and construction
Maricopa County ranked #1 in U.S. for
population growth in 2016
- U.S. Census Bureau March 2017
Scottsdale ranked best place in the U.S.
to find a new job in 2017; 4 other valley
cities ranked in Top 20
- WalletHub January 2017
2017 housing construction at highest level
since 2007
Vacancy rates in office and retail space
have fallen to pre-recessionary levels
0
10,000
20,000
30,000
40,000
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18
Single Family Multifamily Projected
Single Family & Multifamily Housing Permits
Maricopa County
Arizona population surpassed 7 million in
2017
1 Employment data is based on CPS as of December 2017
Arizona #1 state in the country in 2017
for in-bound moves
- North American Moving Services January 2018
Powering Growth, Delivering Value19
RATE BASE
APS’s revenues come from a
regulated retail rate base and
meaningful transmission business
$6.8
$9.1
$1.4
$1.8
2016 2017 2018 2019 2020
APS Rate Base Growth
Year-End
ACC FERC
Total Approved Rate Base
Projected
ACC FERC
Rate Effective Date 8/19/2017 6/1/2017
Test Year Ended 12/31/20151 12/31/2016
Rate Base $6.8B $1.4B
Equity Layer 55.8% 55%
Allowed ROE 10.0% 10.75%
1 Adjusted to include post test-year plant in service through 12/31/2016
83%
17%
Generation & Distribution Transmission
Rate base $ in billions, rounded
Rate Base Guidance:
6-7% Average Annual Growth Rate
Powering Growth, Delivering Value20
Credit Ratings (1)
• A- or equivalent ratings or better at S&P, Moody’s
and Fitch
2017 Major Financing Activities
• $250 million re-opening in March of APS’s
outstanding 4.35% senior unsecured notes due
November 2045
• $300 million 10-year 2.95% APS senior unsecured
notes issued in September
• $300 million 3-year 2.25% PNW senior unsecured
notes issued in November
2018 Major Financing Activities
• Currently expect up to $600 million of long-term
debt issuance at APS
(1) We are disclosing credit ratings to enhance understanding of
our sources of liquidity and the effects of our ratings on our
costs of funds.
BALANCE SHEET STRENGTH
$82
$600
$250
$300
$-
$100
$200
$300
$400
$500
$600
2018 2019 2020
APS PNW
($Millions)
Long-Term Debt Maturity Schedule
Powering Growth, Delivering Value21
FOUR CORNERS SCR
RATE RIDER
APS will file for a rate increase
in April 2018
1 Estimate as of December 31, 2017
2 Based on 2017 Rate Review Order
Financial Cost of Capital Bill Impact
• Consistent with prior
disclosed estimates
• 7.85% Return on Rate
Base2
– Weighted Average Cost
of Capital (WACC)
• Rate rider applied as a
percentage of base rates
for all applicable customers
• $390 million1 direct costs
vs. $400 million2
contemplated in APS’s
recent rate case
• 5.13% Return on Deferral2
– Embedded Cost of Debt
• ~$65 million revenue
requirement
• $40 million1 in indirect
costs (overhead, AFUDC)
• 5% Depreciation Rate
– 20 year useful life
(2038-depreciation
study)
• ~2% bill impact
• 5 Year Deferral
Amortization
Key Components of APS’s Anticipated Request
Powering Growth, Delivering Value22
OCOTILLO MODERNIZATION PROJECT AND
FOUR CORNERS SCRs
Ocotillo Modernization Project Four Corners SCRs
In-Service Dates
Units 6, 7 – Fall 2018
Units 3, 4 and 5 – Spring 2019
Unit 5 – Late 2017
Unit 4 – Spring 2018
Total Cost (APS) $500 million $400 million
Estimated Cost Deferral $45 million (through 2019) $30 million (through 2018)
Accounting Deferral
− Cost deferral from date of commercial
operation to the effective date of rates
in next rate case
− Includes depreciation, O&M, property
taxes, and capital carrying charge1
− Cost deferral from time of installation
to incorporation of the SCR costs in
rates using a step increase beginning
in 2019
− Includes depreciation, O&M, property
taxes, and capital carrying charge1
• Included in the 2017 Rate Review Order*, APS has been granted Accounting Deferral Orders for
two large generation-related capital investments
– Ocotillo Modernization Project: Retiring two aging, steam-based, natural gas units, and
replacing with 5 new, fast-ramping, combustion turbine units
– Four Corners Power Plant: Installing Selective Catalytic Reduction (SCR) equipment to comply
with Federal environmental standards
1 APS will calculate the capital carrying charge using the 5.13% embedded cost of debt established in the 2017 Rate Review Order.
*The ACC’s decision is subject to appeals.
Powering Growth, Delivering Value23
Term to January 2019
Other State Officials
ARIZONA CORPORATION COMMISSION
* Term limited - elected to four-year terms (limited to two consecutive)
**Governor Doug Ducey appointed Justin Olson to fill the remainder of former Commissioner Doug Little’s term.
ACC Executive Director – Ted Vogt
RUCO Director – David Tenney
Terms to January 2021
Justin
Olson (R)**
Bob
Burns (R)*
Andy
Tobin (R)
Tom
Forese (R)
Chairman
Boyd
Dunn (R)
Powering Growth, Delivering Value24
2018 KEY DATES
Other Key Dates Q1 Q2 Q3 Q4
Arizona State Legislature In session Jan 8 – End of Q2
Elections Aug 28: Primary Nov 6: General
ACC Key Dates / Docket # Q1 Q2 Q3 Q4
Key Recurring Regulatory Filings
Lost Fixed Cost Recovery
E-01345A-11-0224 File Feb 15
Implement
May 1
Transmission Cost Adjustor
E-01345A-11-0224
File May 15
Implement Jun 1
2019 DSM/EE Implementation Plan
TBD
Jun 1: File 2019 Plan
2018 DSM Decision
Expected Q2
2019 RES Implementation Plan
TBD
2018 RES Decision
Expected Q2 Jul 1: File 2019 Plan
APS Rate Review/
Four Corners SCR Step Increase
E-01345A-16-0036
Feb: Customer
Transition Begins
May 1: File Year Two
RCP Export Rate
Apr: File Four Corners
SCR Request
Sep 1: Year Two RCP
Export Rate
Implemented
Resource Planning and Procurement
E-00000V-15-0094
ACC declined to
acknowledge Arizona
utility’s IRPs
Workshops begin for
APS 2020 IRP
Review and Modification of Current Net
Metering Rules RE-00000A-17-0260
Staff Draft Rules
Expected Q2
Modification of the Federal Tax Reform
Rate Adjustment AU-00000A-17-0379 Implemented March 1
Clean Resources Energy Standard and
Tariff E-00000Q-16-0289
Staff Notice of Inquiry
opened February 22
Responses to NOI due
April 23
Powering Growth, Delivering Value25
484
680
832
715
1157 1158
1349
1141
1002
1189
1077 1168
1153
759
1267
1001
1291
1413 1364
2033
1602
1442
1283
14341462
1577
1841
1969
2493
3811
2207
3576
326
551
645 627
957
1055
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2015 Applications 2016 Applications 2017 Applications 2018 Applications
* Monthly data equals applications received minus cancelled applications. As of February 28, 2018, approximately 76,000
residential grid-tied solar photovoltaic (PV) systems have been installed in APS’s service territory, totaling approximately
597 MWdc of installed capacity. Excludes APS Solar Partner Program residential PV systems.
Note: www.arizonagoessolar.org logs total residential application volume, including cancellations. Solar water heaters can also be found
on the site, but are not included in the chart above.
RESIDENTIAL PV
APPLICATIONS* 10 18 22 44 51
57
74
133
150
33
2009 2012 2014 2016 2018
Residential DG (MWdc) Annual Additions
YTD
Powering Growth, Delivering Value26
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1 3 5 7 9 11 13 15 17 19 21 23
Over-
Generation
Generation
Minimum Output
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1 3 5 7 9 11 13 15 17 19 21 23
Generation Minimum
Output
Over-
Generation
THE “DUCK CURVE” Distributed generation is changing the load shape of the grid
Excess renewables create over-generation
challenges …
Hour Hour
… and potentially for nuclear generation in
the future
Current Spring Day Spring Day 2022
Nuclear Output Nuclear Output
Powering Growth, Delivering Value27
• 10-Year Transmission Plan filed January
2018 (115 kV and above)
– 52 miles of new lines
– 13 bulk transformer additions
• Also includes:
– Sun Valley-Morgan 500kV (2018)
– North Gila-Orchard 230kV (2021)
– Cholla Synchronous Condenser (2019)
• Transmission investment diversifies
regulatory risk
– Constructive regulatory treatment
– FERC formula rates and retail adjustor
APS TRANSMISSION
Strategic transmission investment
is essential to maintain reliability
and deliver diversified resources
to customers
Legend
Planned lines
Existing lines
Solar potential area
Wind potential area
Phoenix
Flagstaff
Tucson
Powering Growth, Delivering Value28
GENERATION PORTFOLIO*
Plant Location No. of Units Dispatch COD Ownership Interest1 Net Capacity (MW)
NUCLEAR
1,146 MW Palo Verde Wintersburg, AZ 3 Base 1986-1989 29.1% 1,146
COAL
1,672 MW
Cholla Joseph City, AZ 2 Base 1962-1980 100 387
Four Corners Farmington, NM 2 Base 1969-1970 63 970
Navajo Page, AZ 3 Base 1974-1976 14 315
GAS - COMBINED CYCLE
1,871 MW
Redhawk Arlington, AZ 2 Intermediate 2002 100 984
West Phoenix Phoenix, AZ 5 Intermediate 1976-2003 100 887
GAS - STEAM TURBINE
220 MW Ocotillo Tempe, AZ 2 Peaking 1960 100 220
GAS / OIL
COMBUSTION TURBINE
1,088 MW
Sundance Casa Grande, AZ 10 Peaking 2002 100 420
Yucca Yuma, AZ 6 Peaking 1971-2008 100 243
Saguaro Red Rock, AZ 3 Peaking 1972-2002 100 189
West Phoenix Phoenix, AZ 2 Peaking 1972-1973 100 110
Ocotillo Tempe, AZ 2 Peaking 1972-1973 100 110
Fairview Douglas, AZ 1 Peaking 1972 100 16
SOLAR
239 MW
Hyder & Hyder II Hyder, AZ - As Available 2011-2013 100 30
Paloma Gila Bend, AZ - As Available 2011 100 17
Cotton Center Gila Bend, AZ - As Available 2011 100 17
Chino Valley Chino Valley, AZ - As Available 2012 100 19
Foothills Yuma, AZ - As Available 2013 100 35
Distributed Energy Multiple AZ Facilities - As Available Various 100 25
Gila Bend Gila Bend, AZ - As Available 2015 100 32
Luke Air Force Base Glendale, AZ - As Available 2015 100 10
Desert Star Buckeye, AZ - As Available 2015 100 10
Red Rock Red Rock, AZ - As Available 2016 100 40
Various Multiple AZ Facilities - As Available 1996-2006 100 4
Total Generation Capacity 6,236 MW
1 Includes leased generation plants* As disclosed in 2017 Form 10-K.
Powering Growth, Delivering Value29
PURCHASED POWER CONTRACTS*
Contract Location Owner/Developer Status1 PPA Signed COD Term (Years) Net Capacity (MW)
SOLAR
310 MW
Solana Gila Bend, AZ Abengoa IO Feb-2008 2013 30 250
RE Ajo Ajo, AZ Duke Energy Gen Svcs IO Jan-2010 2011 25 5
Sun E AZ 1 Prescott, AZ SunEdison IO Feb-2010 2011 30 10
Saddle Mountain Tonopah, AZ SunEdison IO Jan - 2011 2012 30 15
Badger Tonopah, AZ PSEG IO Jan-2012 2013 30 15
Gillespie Maricopa County, AZ Recurrent Energy IO Jan-2012 2013 30 15
WIND
289 MW
Aragonne Mesa Santa Rosa, NM Ingifen Asset Mgmt IO Dec-2005 2006 20 90
High Lonesome Mountainair, NM Foresight / EME IO Feb-2008 2009 30 100
Perrin Ranch Wind Williams, AZ NextEra Energy IO Jul-2010 2012 25 99
GEOTHERMAL
10 MW Salton Sea Imperial County, CA Cal Energy IO Jan-2006 2006 23 10
BIOMASS
14 MW Snowflake Snowflake, AZ Novo Power IO Sep-2005 2008 15 14
BIOGAS
6 MW
Glendale Landfill Glendale, AZ Glendale Energy LLC IO Jul-2008 2010 20 3
NW Regional Landfill Surprise, AZ Waste Management IO Dec-2010 2012 20 3
INTER-UTILITY
540 MW
PacifiCorp Seasonal
Power Exchange - PacifiCorp IO Sep-1990 1991 30 480
Not Disclosed Not Disclosed Not Disclosed IO May-2009 2010 10 60
CONVENTIONAL
TOLLING
1,695 MW
CC Tolling Not Disclosed Not Disclosed IO Aug-2007 2010 10 560
CC Tolling Arlington, AZ Arlington Valley IO Dec-2016 2020 6 565
CC Tolling Not Disclosed Not Disclosed IO Dec - 2017 2020 7 570
DEMAND RESPONSE
25 MW Demand Response Not Disclosed Not Disclosed IO Sep-2008 2010 15 25
SOLAR PLUS
BATTERY STORAGE
65 MW
Solar Plus Battery
Storage Arlington, AZ First Solar UD Feb – 2018 2021 15 65
Total Contracted Capacity 2,954 MW
1 UD = Under Development; UC = Under Construction; IO = In Operation* As disclosed in 2017 Form 10-K.
Powering Growth, Delivering Value30
INVESTOR RELATIONS CONTACTS
Stefanie Layton
Director, Investor Relations
(602) 250-4541
stefanie.layton@pinnaclewest.com
Chalese Haraldsen
(602) 250-5643
chalese.haraldsen@pinnaclewest.com
Michelle Clemente
(602) 250-3752
michelle.clemente@pinnaclewest.com
Pinnacle West Capital Corporation
P.O. Box 53999, Mail Station 9998
Phoenix, Arizona 85072-3999
Visit us online at: www.pinnaclewest.com