Our audits incorporate all regulatory requirements for air, water, waste, industrial hygiene, safety, Emergency Planning and Community Right to Know Act (EPCRA), Department of Transportation (DOT), pollution prevention and internal EHS policies, procedures and management practices.

Upon completion of an audit, our auditors meet with the facility’s manager to discuss the results of the audit and note any areas of concern or accomplishments. Significant areas of concern are noted as audit exceptions, and reported in a formal audit report. The facility manager then must complete a corrective action plan within 30 days. The audit team then enters the findings into a database to track the facility’s progress toward correction, as well as identifying companywide trends.

Results of EHS audit exceptions are reported quarterly to executive management and at least annually to the Board of Directors. Officers receive quarterly and annual reports on audit activities and trends in audit findings. Additionally, facility managers are provided with quarterly summary reports on EHS audit exceptions for incorporation into their Tier 1 EHS self-assessment activities.

In 2003, our audit team conducted audits of five service centers, three business offices, five power plants and three other facilities.

To identify areas for improvement and to ensure our EHS compliance audit program conforms to reference standards, APS contracts for periodic third-party reviews. Our last review was in 2002, and we will be contracting an independent third party for a review in 2005.

The EHS auditing program continues to incorporate expert guest auditors (from the various APS and Pinnacle West operations) to be a part of the EHS audit team. This program enhances the knowledge and skill set of EHS professionals throughout the organization.

We utilize an EHS self-assessment program, as part of the Tier 1 process, to augment our audit program. With the EHS self-assessment program, individual facilities review their EHS programs and identify strengths and weaknesses. In 2003, APS power plants completed 31 self-assessments.

APS monitors the environmental performance of suppliers in a variety of ways, including periodic audits of our vendors by the EHS audit group.

Of the 23 vendor audits completed in 2003, 74 percent were waste treatment, storage and disposal facilities; the remaining 26 percent were recycling firms. APS also conducted an additional 10 specific vendor audits. Finally, APS belongs to the Joint Utility Vendor Audit Consortium (JUVAC) and CHWMEG consortium. Seven audits were conducted by JUVAC and two contracted by CHWMEG.