Profile: Pinnacle West Capital Corp (PNW.N)
6 Mar 2014
Pinnacle West Capital Corporation (Pinnacle West), incorporated on February 20,1985, is a holding company that conducts business through its subsidiaries. Pinnacle West derives its revenues and earnings from its wholly owned subsidiary, Arizona Public Service Company (APS). APS is a vertically-integrated electric utility that provides either retail or wholesale electric service to most of the State of Arizona. APS provides electric service to approximately 1.1 million customers. The Company owns or leases approximately 6,340 megawatts of regulated generation capacity and it holds a mix of both long-term and short-term purchased power agreements for additional capacity, including a variety of agreements for the purchase of renewable energy. The Company’s subsidiaries include El Dorado Investment Company (El Dorado) and SunCor Development Company (SunCor). El Dorado owns minority interests in several energy-related investments and Arizona community-based ventures. On August 19, 2011, the Company sold APS Energy Services Company, Inc., a subsidiary of the Company.
APS has ownership interests in or leases the coal, nuclear, gas, oil and solar generating facilities. Four Corners is a 5-unit coal-fired power plant located in the northwestern corner of New Mexico. APS operates the plant and owns 100% of Four Corners Units 1, 2 and 3 and 15% of Units 4 and 5. APS has a total entitlement from Four Corners of 791 MW. The Four Corners plant site is leased from the Navajo Nation and is also subject to an easement from the federal government. Cholla is a 4-unit coal-fired power plant located in northeastern Arizona. APS operates the plant and owns 100% of Cholla Units 1, 2 and 3. PacifiCorp owns Cholla Unit 4, and APS operates that Unit for PacifiCorp. APS has a total entitlement from Cholla of 647 megawatts. The Navajo Plant is a 3-unit coal-fired power plant located in northern Arizona. Salt River Project operates the plant and APS owns a 14% interest in Navajo Units 1, 2 and 3. APS has a total entitlement from the Navajo Plant of 315 megawatts.
Palo Verde is a nuclear power plant located about 50 miles west of Phoenix, Arizona. APS operates the plant and owns 29.1% of Palo Verde Units 1 and 3 and about 17% of Unit 2. In addition, APS leases about 12.1% of Unit 2, resulting in a 29.1% combined ownership and leasehold interest in that Unit. APS has a total entitlement from Palo Verde of 1,146 megawatts. APS entered into agreements with three separate lessor trust entities in order to sell and lease back about 42% of its interest of Palo Verde Unit 2 and certain common facilities. Operation of each of the three Palo Verde Units requires an operating license from the United States Nuclear Regulatory Commission
(NRC). On April 21, 2011, the NRC approved APS’s application for renewed operating licenses for the Palo Verde Units, extending the licenses for Units 1, 2 and 3 to June 2045, April 2046, and November 2047.
APS has six natural gas power plants located throughout Arizona, consisting of Redhawk, located near the Palo Verde Nuclear Generating Station; Ocotillo, located in Tempe; Sundance, located in Coolidge; West Phoenix, located in southwest Phoenix; Saguaro, located north of Tucson, and Yucca, located near Yuma. Several of the units at Saguaro and Yucca run on either gas or oil. APS has one oil power plant, Douglas, located in the town of Douglas, Arizona. APS owns and operates each of these plants with the exception of one oil only combustion turbine unit and one oil and gas steam unit at Yucca that are operated by APS and owned by the Imperial Irrigation District. APS has a total entitlement from these plants of 3,389 megawatts. Gas for these plants is acquired through APS’s hedging program. APS has long-term gas transportation agreements with three different companies, some of which are effective through 2024. Fuel oil is acquired under short-term purchases delivered primarily to West Phoenix, where it is distributed to APS’s other oil power plants by truck.
As of December, 31, 2011, APS has begun operation of 50 megawatts of utility scale solar through its AZ Sun Program. APS owns and operates more than forty small solar systems around the state. Together it has the capacity to produce about five megawatts of renewable energy. This fleet of solar systems includes a three megawatts facility located at the Prescott Airport, a one megawatt facility located at APS’s Saguaro power plant and one megawatt of small solar in various locations across Arizona. APS is in the final stages of developing solar photovoltaic distributed energy systems installed as part of the Community Power Project in Flagstaff, Arizona.
Pinnacle West Capital Corp
Mail Sta. 8602, 400 North Fifth
P.O. Box 53999
PHOENIX AZ 85004