Nuclear and Operating Committee Charter

Revised as of June 22, 2016

GENERAL

Members of the Nuclear and Operating Committee (the “Committee”), including its Chairman, are selected by the Board of Directors (the “Board”) on at least an annual basis, and the selections may be changed by the Board at any time. The Committee is responsible to the Board and reports regularly to the Board on the activities of the Committee. The Committee may create subcommittees and vest those subcommittees with the authority of the full Committee with respect to specific matters delegated to such subcommittees.

NUCLEAR AND OPERATING COMMITTEE DUTIES AND RESPONSIBILITIES

  1. Receive regular reports from management and monitor overall performance of the Palo Verde Nuclear Generating Station (“Palo Verde”), including operations, safety, legal compliance, key performance indicator results and trends, and any significant incidents or events.

  2. Review and discuss reports of major inspections and evaluations of Palo Verde by external oversight groups, such as the Nuclear Regulatory Commission and the Institute of Nuclear Power Operations.

  3. Review and discuss reports from any independent oversight committee required by Nuclear Regulatory Commission regulations or otherwise established by the Chief Executive Officer.

  4. Receive regular reports from management and monitor overall performance of the principal non-nuclear business functions of Pinnacle West Capital Corporation and its subsidiaries (collectively, the “Company”), including fossil energy generation, energy transmission and delivery, customer service, fuel supply and transportation, safety, legal compliance, key performance indicator results and trends, and any significant incidents or events.

  5. Receive and discuss regular reports from management concerning the environmental, health and safety (“EH&S”) policies and practices of the Company, and monitor compliance by the Company with such policies and applicable laws and regulations pertaining to EH&S. Review and discuss with management how the Company can continue to improve its safety practices.

  6. Review APS’s planning for generation resources additions and significant expansions of its bulk transmission system.

  7. Periodically review, with management, the principal risks related to or arising out of the Company’s nuclear, fossil generation, transmission and distribution and EH&S operations and assess the effectiveness of the Company’s measures to address these risks, including oversight of security policies, programs and controls for protection of cyber and physical assets.

  8. Conduct a self-assessment on at least an annual basis to determine whether the Committee is functioning effectively.

  9. Review the Committee’s Charter at least biennially, and, if appropriate, recommend changes to the Board.

MANAGEMENT'S RESPONSIBILITIES

Provide the Committee with the necessary resources to discharge the Committee’s duties and responsibilities, as reflected in this Charter and as assigned to the Committee by the Board.