Pinnacle West

Overview

Pinnacle West is an investor-owned electric utility holding company headquartered in Phoenix, Arizona. Its primary regulated operating subsidiary is Arizona Public Service Company (APS). Other subsidiaries include El Dorado and PNW Power. The company’s consolidated assets are approximately $30 billion.

Key metrics

• Customers: ~1.4 million electric customers served by APS
• Consolidated assets: ~$30 billion
• Total regulated generation capacity (owned and/or controlled by APS): 6,257 MW
• 2025 peak one-hour demand: 8,648 MW (recorded August 7, 2025)
• 2024 peak one-hour demand: 8,210 MW (recorded August 4, 2024)

Corporate structure and resource mix

• Generation ownership and control are primarily through APS, including APS’s entitlement in the Palo Verde nuclear plant.
• Resources include owned generation, leased interests, long-term power purchase agreements (PPAs), and distributed energy resources (DERs).
• APS relies on a mix of nuclear, natural gas, oil, coal, solar, wind, geothermal, biomass, and energy storage to meet reliability and energy needs.

Nuclear — Palo Verde

• APS entitlement at Palo Verde: 1,146 MW (combined ownership and leasehold interests: 29.1% in Units 1 and 3; ~23.9% in Unit 2 plus a 5.2% lease on Unit 2).
• A 42% share was sold/leased in 1986; APS purchased two of the three leased interests in 2025. Approximately 5.2% of the Unit 2 lease expires in 2033.
• NRC operating licenses renewed to 2045–2047 for Units 1–3.
• Spent fuel is stored on-site in the ISFSI; APS continues to evaluate additional storage or alternative solutions depending on federal waste-management developments.

Natural gas and oil

• Natural gas plants: Redhawk (near Palo Verde), Ocotillo (Tempe), Sundance (Coolidge), West Phoenix, Saguaro (north of Tucson), Yucca (near Yuma).
• Oil-only plants: Douglas and Yucca GT-4 (with one oil/gas unit operated by APS but owned by another entity in one case).
• APS total entitlement from these gas and oil plants: 3,722 MW.
• Fuel management: Portions of natural gas are hedged up to three years in advance; long-term gas transportation agreements extend through 2052.
• Recent and planned additions:
  • 2024 expansions: ~90 MW (two combustion turbines at Sundance, in service 2025) and ~397 MW (eight combustion turbines at Redhawk, expected in service 2028).
  • Planned: up to 2,000 MW of flexible natural gas generation to support around-the-clock demand growth.

Coal

• Four Corners (New Mexico): APS historically held varying interests across units, with long-term Navajo coal supply arrangements. Seasonal operation options and unit retirements have been exercised; environmental remediation and CCR costs are being recovered through rates.
• Navajo Plant: APS holds a 14% interest in Units 1–3; decommissioning activities and site lease extensions are underway, with depreciation and return on net book value recovered through rates.

Renewables and energy storage

• APS-owned solar: multiple projects across Arizona (examples include Paloma, Cotton Center, Hyder, Chino Valley, Foothills, Gila Bend, Luke AFB, Desert Star, Red Rock, Agave Solar). APS-owned solar capacity in operation totals ~419 MW net, with ~168 MW under development.
• APS-owned energy storage (BESS): examples include Paloma, Cotton Center, Hyder I & II, Chino Valley, Foothills, Gila Bend, Desert Star, Red Rock, Agave. APS-owned storage capacity in operation is ~201 MW, with ~150 MW under development.
• Non-APS resources: PPAs and third-party-owned solar, wind, and BESS projects add substantial capacity, totaling several thousand megawatts across contracted resources.
• APS combines owned, leased, and contracted resources, plus DERs, to meet reliability and energy needs while continuing interconnection and development activity.

Resource planning and market participation

• Integrated Resource Plan (IRP): APS files a triennial IRP; the latest IRP was released in 2023, and the next IRP is due August 2026. The Arizona Corporation Commission (ACC) amended the IRP process in 2024 to address resource adequacy and western market participation following changes at Four Corners.
• Regional markets and programs:
  • Western Energy Imbalance Market (WEIM): participation since 2016 for real-time optimization (CAISO-administered).
  • Markets+: APS filed a tariff in 2024 that was approved in 2025 and is pursuing participation, with go-live expected October 2027.
  • Western Resource Adequacy Program (WRAP): APS is transitioning to full binding participation in 2027–2028.
• Goals in market participation include lowering fuel and purchased-power costs, improving reliability, and integrating regional resources to manage customer costs.

Regulation and oversight

• Retail regulation: Arizona Corporation Commission (ACC) regulates APS’s retail electric rates and securities issuance; approvals are required for certain transfers, encumbrances, and affiliate transactions.
• Wholesale regulation: Federal Energy Regulatory Commission (FERC) regulates wholesale power sales and transmission rates. Wholesale activity accounted for about 4.5% of APS’s electric operating revenues in 2025.
• Transmission and distribution planning: APS coordinates with regulators and stakeholders to support reliability, market access, and clean energy development.

Strategy and targets

• Pinnacle West, through APS, focuses on transitioning to a cleaner, more flexible energy mix, targeting carbon-neutral operations by 2050.
• Clean-energy share target for 2025: 58% (including nuclear, renewables, demand-side management, and clean PPAs).
• Priorities include grid modernization, resilience to extreme weather, wildfire safety, and infrastructure hardening to maintain reliable service for customers.

Business summary

Pinnacle West, via Arizona Public Service Company, operates as a regulated electric utility delivering electricity to roughly 1.4 million customers. The company manages a diverse portfolio of generation and contracted resources, engages in long-term planning and market participation, and operates under ACC and FERC oversight while pursuing a transition toward lower-carbon and more flexible energy resources.